N.J. pension funds lost an astounding $23 Billion this year. The pension funds are also severely unfunded because the State has skipped or failed to make full contributions for the last 15 years. Previous to this year's huge losses, the funds were already underfunded by some $35 Billion. Our Governor's assine solution for a dire situation? To continue the chicanery. In typical style, Corzine also fails to address the huge pension losses or the insurmountable shortfall in his You Tube "feel good, put off the inevitable for another day" video.
Another fund which is being ignored, but also severely underfunded, is the NJ health care fund for retirees. According to a July 2007 article published in The NY Times, that fund has a $58 billion shortfall. Between the pension and health care deficits, that article quoted Corzine as saying those issues “truly keep me awake at night". If that was true back in 2007, Corzine should be suffering from an extreme case of insomnia these days, but he looks pretty well rested in his You Tube appearance. http://www.nj.com/news/index.ssf/2008/11/corzine_releases_video_message.html
In the summer of 2006, Corzine created a Joint Legislative Committee on Public Employee Benefits Reform. A handful of watered down recommendations were enacted in the Public Employee Pension and Benefits Reform Act of 2008, signed into law this past September. The reforms are projected to save the state a paltry $150 million in benefits expenses over the next 14 years. This Act was nothing more than a dog and pony show and the $150 million in so-called savings has already been pissed away by the State in bad investments by Corzine's Wall Street Wizards, $117 million of it in Lehman Brothers stock alone.
Upon passage, Senator Nicholas Scutari, who sponsored the Act, admitted that the pension system was in trouble and could collapse. In two short months since then, the pension system lost $13 billion more. Wonder what Senator Scutari would say today?
Early on, Corzine told residents to "hold him responsible". It's clear that Corzine is anything but responsible, a trait shared by his predecessors as well as many current elected officials. If President-elect Obama had offered Corzine the treasury position (the position currently held by his old nemesis at Goldman Sachs, Hank Paulson), you can bet your last dollar that Corzine would have left the Soprano State lickity split. Obama very wisely selected someone else.
Disturbingly, Corzine is expected to meet with Obama next week to recommend a new U.S. Attorney for NJ. On Corzine's short list, is the do-nothing current State A.G. Anne Milgram. Maybe Corzine can fill Obama in on the sordid details on how Annie is fighting hard to keep his emails with Katz, his ex-squeeze, now known as the Six Million Dollar woman, secret from taxpayers.
Recently, Corzine created yet another useless arm of State government, the office of the Comptroller. Rather than allowing municipalities and counties to take a temporary vacation from making contributions to pension fund, Corzine should be calling on his Comptroller to investigate the pension board and the bad investments it's made. Too bad the head of that department is just another clown from Corzine's circus of friends, but in keeping with Corzine's standing practice of filling positions with unqualifed, and many times, questionable candidates.
Since we lack a responsible Governor, our local and county governments can either act in a fiscally sound manner by continuing to collect tax dollars to meet our pension obligations and set them aside in a special account created for that purpose, or they can follow the advice of the clown, and do what has, to a large extent, gotten the pension funds in the jam in the first place and put it on the already overburdened taxpayers' shoulders another day. Under the clown's scheme, taxpayers will be hit especially hard when asked to make up this deferral to both their municipal and county governments, while at the same time dealing with escalating property taxes, which our local, county and State governments continue to ignore.
Friday, November 28, 2008
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4 comments:
What you forget to say that legally there is not much the state or local government can do. When an employee is hired by a public entity, they enter into a binding contract to work for a certain number of years and to be paid a pension when the employee retires based upon a determined formula.
Both the Attorney General and the non partisan Office of Legislative Services stated in unison that to arbitrarily to reduce any benefits without reasonable compensation to the employees would be both a violation of state and federal law.
With that being said the members of the joint legislative committee threw up it's collective hands and said we must fund the pension and then the governor and the legislature did not.
I think there is plenty our State government can do ... it chooses not to.
I think the State of NJ has committed a fraud or worse on the beneficiaries/participants of the pension plans and on the taxpayers as well by promising a pension when a) the pension funds aren’t being fully funded to meet future obligations and b) the pension funds apparently don’t have investment guidelines in place nor do they operate them with a prudent standard of care.
Recently and more egregious, the plans don’t even appear to be run solely in the interests of the participants/beneficiaries by the Wall Street Wizards. All our elected officials should be demanding an investigation, not just a couple republicans. Sadly, it appears the pension funds are run the same way most everything else is run in NJ ...the “anything goes” method of doing business and no one is held accountable.
1) There is no trust fund for health benefits. That $58 billion number (now they're sayin $50 billion) is all owed, which is why it's a direr situation - no trust fund to raid.
2) The state pension is effectively a ponzi scheme. Even if Corzine put in what he was told, those contribution numbers are so badly understated that it may avert bankruptcy for a month or so.
Thanks for you comments John. I read your Voices column and you do a great job of explaining the pitfalls and shortfalls of NJ's pension system. Do you know if Sen. Sweeney is going along with this deferral scheme? I wonder what he would do if employers stopped contributing their loads to the Union he runs?
Regards.
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