NJ State Worker Pensions – Benefits Out Of Control
Imagine a guy making $89,000 a year in 2002, getting a bump in salary to $140,000 by February of 2005. Now imagine that this same lucky fellow is eligible for an annual retirement pension of $98,500 -- about $36,000 more than he would have received had he retired just one year ago. Oh, and the same lucky guy can retire at age 55 and receive this full pension of $98,000 per year.
The lucky fellow is real and his name is Robert Codey, Acting Governor Codey’s brother. You can read all about it in this Jersey-Style post based upon this Star-Ledger article. Is this a case of nepotism, currying political favor or a political payoff – who knows? But one thing is for sure, the pension benefits for state workers are out of control. You see all state workers have their pensions calculated on their last year of earnings and can retire as early as their late forties. This in addition generous medical benefits.
This is a prime example of why the people of New Jersey are so ill served by the Democrats, unless of course you are a government employee. It’s no secret that trial lawyers and government employees are the two largest financial backers of the Democrat Party and their candidates. The Democrats are especially beholden to these special interest groups and can be counted on to protect them at all costs. Unfortunately, the taxpayers pay the costs so that the Democrats can dole out the goodies.
Senator Corzine would have you believe his wealth puts him beyond the reach of special interest groups. But Jon Corzine can’t afford to alienate state workers if he hopes to become the next Governor of New Jersey. Corzine will buy the votes of government employees, not with his money, but with yours. A candidate in the pocket of teachers and other state workers can not bring real reform and fiscal sanity to Trenton. Especially one like Jon Corzine with political ambitions beyond the Governor’s mansion.
The Democrats are spending the entire state into the ground and they show no signs of letting up. Last year they went on a spending spree that saw state spending increase more than 17%. “Tax and spend liberals” may be a worn out slogan, but it perfectly describes the Democrat s in New Jersey.
Now with New Jersey more than $4 billion dollars in debt, the Democrats fall back on their tried and true answer to all fiscal problems - raise taxes. They never consider the other side of the equation – cut spending. The citizens of New Jersey are the most heavily taxed in the country and still the Democrats don’t think we are taxed enough.
The Democrat’s cry is “tax the rich” but Ken over at SmadaNek has figured out, to the Democrats. “rich” is everyone with an income above $18,750. The Bad Hair Blog predicted the Democrats would continue to lower the definition of “millionaire” to the point of absurdity and we believe that day is fast approaching. We can do something about this, it's called educated voting.
More about the state pension system crisis and the Democrat’s reckless plans to put us all further in the hole from Tom Moran’s article – Reckoning day nears for pension funding .
Four years ago, when the stock market was booming, the state's pension funds were so stuffed with cash that Trenton raised the benefits it offers government retirees by about 9 percent. That gave the teachers, police and other government employees an even cushier deal than they already had. The private sector abandoned such cushy arrangements long ago, for the most part. But this kind of deal is still common for public employees.
But now the system has spun off the rails. The pension funds are supposed to be replenished regularly, but no one in Trenton has bothered. We haven't contributed new money to the major pension funds since 1997. In the current fiscal year, we were supposed to contribute nearly $1 billion. That's what the impartial accountants who review the books recommended. Instead, we contributed nothing. Which is hard to justify when you consider the orgy of spending that took place last year in Trenton. Overall spending jumped 17 percent.
The shortfall in the pension funds was about $14 billion at least count, a number that is sure to rise with the next actuarial report.. Yet, the Legislature shows no sign that it's ready to face the problem. In fact, several pending bills would deepen the crisis by offering more generous pension benefits.
The biggest come from Assemblyman Louis Greenwald, a rising power in the Democratic Party from South Jersey and the chairman of the budget committee. He has sponsored two bills that would increase the cost-of-living adjustments for pensioners, adding about $1.7 billion in long-term costs for the state and local governments.
This one is like the Social Security problem in Washington: The longer we wait, the deeper the hole will get, and the more difficult it will be to climb out.