In his Budget Address in February, Gov. Jon Corzine said:

Healthcare costs for state workers and retirees are projected to double—from $1.4 billion to $2.8 billion in five years. Post-retirement medical costs for teachers are expected to more than double—from $750 million this year to $1.8 billion in just five years.

In his April testimony before the state Senate Budget and Appropriations Committee, New Jersey State Treasurer Bradley Abelow said:

In addition to the unfunded pension liability, our actuary’s preliminary estimate of the State’s future liability for postretirement medical benefits for current and future retirees is a staggering $78 billion.

These staggering costs for public employee health care and other benefits needed to be addressed in this year’s contract negotiations with state worker and teachers’ unions. Instead, Corzine agreed to a sweetheart deal that had unions bragging about the best deal they’ve negotiated in 15 years.

The new four-year union contact had one element to address retiree health care costs - future retirees were to have contributed 1.5 percent of their pensions toward the cost of their health benefits. Now, even that small concession has been abandoned.

Just three months after signing off on a landmark state worker contract that traded generous pay hikes for increased employee payments toward health benefits, Gov. Jon Corzine's administration is backing away from one key feature of the new pact.

[T]he Corzine administration has agreed to scrap a requirement that future retirees contribute 1.5 percent of their pensions toward the cost of their health benefits.

Under the amended agreement retired workers will be able to continue getting free health insurance if they sign up for a "wellness program". Paid for by taxpayers, of course.

"The change is de minimis relative to the overall scale of what has occurred," Corzine said.

Compared to a $78 billion obligation nearly any amount is “de minimis”, including the total of New Jersey state assets, valued at $35.4 billion, according a recent report by Credit Suisse.

Corzine’s excuse for caving into union demands after the contract had been ratified by union members only serves to highlight the incompetence of his administration. The new and improved healthcare plan won’t be ready until April 1 rather than January 1 as required by the deal.

Corzine said the process of soliciting and evaluating bids for insurers to offer the new health plans took longer than expected.

Corzine may be slow with getting the job done, but he really knows how to drive a hard bargain. The negotiated price for the three month delay is totally free retiree health insurance and a wellness program. Keep this in mind when Corzine sells the Turnpike and Parkway as a down payment on the state’s obligation to public employees. Taxes will have to be raised 24 percent to pay for the rest.

In the meantime, New Jersey’s public employee payrolls continue to swell with more workers being added to the burden. In the past year, the state has added 1,000 workers and local governments have added 5,000.

The question remains, will this sorry situation have any impact on this fall’s elections?

During state budget negotiations last June, Senator, John Adler (D-Cherry Hill), called for reducing New Jersey’s 154,000 workforce by 2,000 jobs to help close the budget gap. Governor Jon Corzine responded to Adler's proposal with, “It is curious that Mr. Adler decided to send this letter on the 98th day of budget negotiations, but we will throw it into the pile."

More than 300 days later, Corzine still hasn’t touched the pile of ideas to reduce state spending. New Jersey’s state budget has gone from $27.4 billion in 2006 to Corzine’s proposed $33.3 billion budget for 2008. That’s an 18 percent increase in state spending in just two years.

Earlier this year the governor said, “I didn’t run for public office to be a number cruncher, or to play scrooge”. Which is slightly different from the line he used when running for governor – “As a former businessman, Corzine has never seen a budget he couldn’t cut – and that experience will allow him to scrub the state budget, line-by-line.”

It’s been 809 days since we wrote:

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.

We were right. State workers are now crowing about the best deal they’ve negotiated in 15 years and for good reason. No layoffs and Corzine has rewarded state employees with a new budget busting contract that tightens their stranglehold on New Jersey’s taxpayers.

So where’s New Jersey’s legislature on this? It’s been a mighty quite budget season since the Democrats announced their own vote buying scheme.

New Jersey’s public employee pension plans were fully funded as of July 2001. Now we are being told there is a funding gap, estimated to be between $25 billion to $56 billion. How did this enormous deficit develop? The Star-Ledger provides this explanation:

The shortfall developed since 2001, as the collapse of the stock market drained $22 billion from the funds. Lawmakers compounded the problem by using accounting gimmicks to skip required annual payments into the funds and to cover billions of dollars in additional costs from increased retirement benefits they granted to public employees.

The Ledger fails to mention two other major factors driving up the state’s pension costs – the number of active public employees added to the pension rolls and the salary increases granted to state and local government workers.

The number of active employees added to New Jersey’s pension plans increased by 41,000 from July, 2001 to July, 2005, according to the latest audited enrollment numbers available from the state. New Jersey’s public workforce has continued to grow by the thousands from that point until today.

In addition to adding more employees, increasing salaries upon which pensions are calculated has further exacerbated the funding crisis. State and local public employees have been granted incremental salary raises on top of wage scale increases that greatly out pace inflation and far exceed the average raises received by employees in the private sector. Taxpayer income and state revenue haven’t kept up with these escalating public employee payroll costs, including pension obligations.

Making matters worse, Governor Jon Corzine has recently offered state workers a salary package that will provide the average employee with a 35 percent increase in salary over the next four years - 13.6 percent in wage scale increases, the balance in incremental salary increases.

The so-called “give backs” in the contract, a 1.5 percent of salary contribution for healthcare benefits and a 0.5 percent increase in employee contributions for pension, are more than covered by with the 13.6 wage scale increases in the new agreement. Raising the retirement age from 55 to 60 for new hires will “save” peanuts, $77.3 million per year by 2022.

As the Star-Ledger points out, lawmakers also unilaterally enhanced pension benefits without a means to actually pay for the increased costs. In July of 2001, completely outside of the union contract negotiation process, the legislature recklessly granted a huge 9 percent increase in pension benefits and lowered the retirement age, effective October 1, 2001.

The state’s pension funds certainly took a hit when the stock market (DJIA) went from, a then all-time high of, 11,722.98 on January 14, 2000 to 10,593.72 on July 1, 2001 and finally, to a five-year low of 7,286.27 on October 9, 2002. But has the state invested its pension funds so poorly that little of that reported $22 billion loss was regained as the market began its climb back to record highs? The market closed yesterday at 12,530.05.

Using accounting gimmicks to skip necessary state payments into the pension funds certainly didn’t help matters, but state contributions are in addition to employee contributions and fund investment gains. How many billions would taxpayers have needed to contribute since 2001, when the pension plans were fully funded, though 2007 in order to close a $25 billion to $56 billion funding gap?

Assuming the state’s estimated investment return rate of 8.25 percent, New Jersey taxpayers should have been contributing about $3 billion every year beginning in 2002 to close a $25 billion gap and about $7.1 billion annually if the pension fund deficit is $56 billion. And that’s just to pay for pensions – the state’s obligation for retiree healthcare benefits is now estimated to be $78 billion.

State officials should have been honestly stating pension obligations and making necessary pension fund payments. Had that happened, perhaps tens of thousands of additional public workers wouldn’t have bee hired, salary increases wouldn’t have been so extravagant, healthcare and other fringe benefits would have been scaled back to a sustainable level, retirement ages wouldn’t have been lowered and pension benefits wouldn’t have been increased.

Now we all know the extent of the problem and we know the cause. It should be obvious to everyone, taxpayers can’t afford the spending binge New Jersey’s politicians have been on since 2002. Lawmakers got us into this mess and it’s within their power to clean it up. Not with more tax increases and hocking state assets, but with meaningful public employee headcount, salary and benefit cuts. That’s only solution and every politician knows it now, if they weren’t aware of it before.

Our elected officials have a choice to make and so will voters come this November. Let your representatives know where you stand!

Last Saturday, we explained what a great deal Governor Jon Corzine has negotiated for New Jersey’s state workers. The average worker will receive a 35 percent increase in salary over the four-year contract - 13.6 percent in wage scale increases, the balance in incremental salary increases.

Yesterday, we explained how the “major concession” on health insurance benefits was actually another Corzine giveaway to the unions. Some employees, those enrolled in the NJ Plus medical insurance plan, will have to start contributing towards their health insurance. Workers currently enrolled in the state’s indemnity (Traditional) and HMOs plans already make contributions. Now all workers accepting health insurance from the state will pay 1.5 percent of their salary for medical benefits. Where’s the concession?

As we’ve explained before, state workers are “contributing” towards their benefits with the extra money the state’s giving them in four straight years of wage scale increases. As the union explained to state workers, “We made them raise the overall wage package in order to pay for the 1.5 percent cost.” The wage scale increases of 3 percent in each of the first two years and 3.5 percent in both of the final two years of the contract more than covers the new employee contribution requirements.

Still, there are state workers who feel this is a bad deal for them, especially in the long run because of the precedent setting health insurance contribution. They fear future increases to employee contributions for medical benefits in subsequent contracts. They fail to realize the 13.6 percent wage scale increases are locked in forever and there’s no way they lose in the long run with this new contract.

Let’s look at several scenarios to prove our point – it’s better for state employees to take the offered wage scale increases (across-the-board raises) now and contribute toward health insurance. In the short and long run, the state worker comes out ahead even if he never receives another salary increase and the state ratchets up the percent of salary for medical coverage in future contracts.

The following scenarios use the average salary for a New Jersey state worker of $54,742 for 2006. To make things less complicated, we’ll also assume the employee is at the maximum salary for his position and not eligible for any incremental salary increases - ever.

Scenario #1
He receives no across-the-board salary increases, but he never contributes towards his health insurance. He retires in 2050.

He will have earned a total of $2,408,648.00 and contributed a total of $0 for health insurance from 2007 through 2050. His net total salary is $2,408,648.00.

Scenario #2
He receives the across-the-board salary increases per the 2007-2010 contract of 3%.3%, 3.5% and 3.5% and pays 1.5 percent of his salary for health benefits. He never receives a salary increase of any type for the rest of his working years. He retires in 2050.

He will have earned a total of $2,725,552.23 and contributed a total of $40,883.28 for health insurance from 2007 through 2050. His net total salary is $2,684,668.94.

The employee is ahead by $276,020.94 under Scenario #2.

Scenario #2a
In the 2011-2014 contract he’s forced to start paying 3 percent of his salary for health insurance and there are no across-the-board salary increases. No incremental raises either.

He will have earned a total of $2,725,552.23 and contributed a total of $78,210.63 for health insurance from 2007 through 2050. His net total salary is. $2,647,341.60.

The employee is ahead by $238,693.60 under Scenario #2a.

Scenario #2b
Under the 2015-2018 contract he has to start paying 6 percent of his salary for health insurance. Still no raise.

He will have earned a total of $2,725,552.23 and contributed a total of $145,399.85 for health insurance from 2007 through 2050. His net total salary is $2,580,152.38.

The employee is ahead by $171,504.38 under Scenario #2b.

Scenario #2c
It’s now the 2019-2022 contract and it’s still bad news for our employee – no salary increase and he’s forced to start paying 9 percent of his salary for health insurance.

He will have earned a total of $2,725,552.23 and contributed a total of $205,123.60 for health insurance from 2007 through 2050. His net total salary is $2,520,428.63.

The employee is ahead by $111,780.63 under Scenario #2c.

Scenario #2d
We’re now in the 2023-2026 contract and still no salary increase. He now has to start paying 12 percent of his salary for health insurance.

He will have earned a total of $2,725,552.23 and contributed a total of $257,381.88 for health insurance from 2007 through 2050. His net total salary is $2,468,170.35.

The employee is ahead by $59,522.35 under Scenario #2d.

Scenario #2e
It’s now been 20 years and the 2027-2030 contract is not good to our employee. Still no salary increase and he has to start paying 15 percent of his salary for health insurance.

He will have earned a total of $2,725,552.23 and contributed a total of $302,174.69 for health insurance from 2007 through 2050. His net total salary is $2,423,377.54.

The employee is ahead by $14,729.54 under Scenario #2e.

Even under these worst case scenarios, no salary increase for 40 years and health insurance contributions rising to 15 percent of salary, the employee is still be ahead of the game. We all know this won’t happen. Between now and 2050 most state workers will receive incremental salary raises and additional wage scale increases in future contracts. There is no way for a state worker to lose under this new contract. Taxpayers are another story.

If you could get a $19,160 increase in salary and a $4,518 decrease in your annual health insurance contributions, would you think you were getting a good deal? How about a $19,160 salary increase, but a $1,109 increase in your health insurance payroll deduction, would you happily take it?

Would it help make up you mind if you knew your employer’s annual contribution to your health insurance was currently $13,992 and likely would be $22,814 in four years?

That’s the deal Governor Jon Corzine has negotiated with New Jersey’s state worker unions. It’s also the deal the state’s taxpayers are expected to swallow and like it.

Here are the details. Currently, New Jersey offers three types of medical plans to state employees– an indemnity plan (Traditional Plan), Health Maintenance Organization plans (HMOs) and the NJ PLUS plan, a blend of HMO and indemnity coverage. The contact will offer one less choice to active employees.

Under the new union contract, the state’s Traditional and NJ Plus plans will be eliminated and replaced with a hybrid of the two, keeping the best features of each plan. Employees will have the option of remaining in an HMO and those with 25 years of service before July 1, 2007 can still choose the Traditional Plan when they retire.

As the union tells it members, “we have negotiated a better health plan than the one we had”. They are right. Here’s a comparison of all health insurance plans currently offered by the state and the union’s explanation of the new hybrid plan.

So, from the state employee’s perspective, what’s not to like about the contract’s health insurance provisions? Some employees, for the first time, will have to contribute toward their medical coverage - 1.5 percent of their salary. But for some employees, those already contributing, their payroll deductions will be considerably less. Regardless, all employees will be a get a 3 percent raise in each of the first two years and a 3.5 percent raise in the final two years of the contract. That’s on top of regular incremental salary increases, providing the average worker with a 35 percent salary increase over the course of the four-year union deal.

Currently, the annual employee contribution for family coverage is $614 for an HMO, $5,335 for the indemnity plan (Traditional) and $0 for NJ Plus. Next year, the average employee will pay $817 for either an HMO or the new hybrid plan. (Average state worker annual salary of $54,742 x 1.5 percent). In the final year of the contract he’ll be paying $1,109 – 1.5 percent of his $73,902 salary.

That average employee previously enrolled in the Traditional plan will save $4,518 in employee contributions in the first year. If enrolled in an HMO, he’ll see a small annual increase of $203 and if formerly enrolled in NJ Plus, an increase of $817.

The contract’s first-year 3 percent increase more than covers the 1.5 percent employee contribution – forever. And, employee contributions will be before tax. As the union put it - “That means that in net money, the money you get in your check, the cost of healthcare will be about 1%”.

The state currently pays $13,992 for NJ plus family coverage, including prescription drugs, and has yet to put a price tag on the new hybrid plan. We know the new hybrid plan will be better and that unlike NJ Plus, will offer a medical network in all 50 states and eliminate the need for a primary care physician referral to see a specialist.

The state’s cost certainly won’t be going down. The Benefit Review Task Force estimated active employee health insurance benefits would increase 13 percent annually though 2010. That would bring the average annual cost for the new plan to $22,814 at the end of the four-year union contact.

What a deal. If you’re a state worker you’d be a fool not to accept this contract, no matter what Carla Katz might tell you. If you’re a taxpayer, you’d be a fool to think Jon Corzine had you in mind when he offered up his latest gift to his union pals.

This is the “fair contract” Governor Jon Corzine has negotiated with the state’s public employee unions. The average New Jersey state worker will receive a 35 percent increase in salary over the next four years - 13.6 percent in wage scale increases, the balance in incremental salary increases.

The average state worker currently makes an annual salary of $54,742. That average worker will be getting $73,902 in pay when the union contract expires in 2010.

It’s been fifteen years, back when Jim Florio was governor, since the union won wage scale increases for every year of a contract. This is the price taxpayers have to bear so that Governor Corzine could reach an agreement in time for his unveiling of the state’s budget in February. The union crows, “We said that we believed the Governor was motivated to get a contract early and that it would work for us”. Boy, did it!

More details about the salary concessions Governor Corzine made to the unions, with examples:

The contract provides an across the board salary increase every year for the next four years. Every worker, regardless of performance, will get a 3 percent raise in each of the first two years and a 3.5 percent raise in the final two years.

The contract also preserves incremental salary increases for all workers receiving a “satisfactory” performance rating and who have not reached the maximum salary level for their position. According to the union, 70 percent of workers will be receiving these incremental salary increases every year for the next four years.

For example, a worker in a pay grade 25 position, currently earning $52,901.32 annually will have receive a $71,380.30 salary in four years. A worker currently earning the maximum of $75,194.05 in a pay grade 25 job will be making $85.445.20 when the contract expires in 2010.

The more we learn about the “fair contract” New Jersey Governor Jon Corzine has negotiated with the state’s public employee unions, the clearer it becomes how unbelievably unfair it is to state taxpayers.

“Corzine said he would endorse pending legislation to "ensure there will be no premium sharing for retirees now or in the future," the New Jersey Education Association said in a message to members last week.”

Since 2002, the cost for New Jersey’s public employees’ health insurance has been increasing by double digit percentages. In 2002, retired public worker health insurance cost taxpayers $50.8 million. According to the state’s Benefits Review Task Force that number will be $2.3 billion in 2010.

“Gov. Jon Corzine, who highlighted the staggering tab for the medical benefits promised to retired public employees in his budget speech last week, has pledged that retired teachers won't have to help pay their $53.6 billion share of the bill.”

“The post-retirement medical benefits promised to 325,000 working and retired teachers are scheduled to cost the state $53.6 billion, a recent accounting report showed. That's about two-thirds of the $78 billion bill that taxpayers face for the retirement health benefits for all public employees.”

“The promise was worked by Corzine in a side deal with the state teachers' union this month while he hammered out a separate four-year collective bargaining agreement with state workers.”

“Corzine said the proposed guarantee of free retirement coverage for teachers simply continues the existing system, and would apply only to teachers already on the payroll or retired. For future hires, he said, local school boards can negotiate post-retirement insurance payments in contract talks.”

This pending legislation on retiree health insurance would tie the hands of all future governors, just as legislation to hike public employee pensions by 9 percent did in 2001. Corzine’s deal would “simply” lock in an existing system that has produced a crushing tax burden that will only get worse in New Jersey as time goes by.

Stop this “pending legislation” NOW!

State Senator Stephen Sweeney (D-Gloucester), Assemblyman Gerald Green (D-Union) and Assemblyman Paul Moriarty (D-Gloucester) unveiled a proposal yesterday that would save about $700 million by cutting the $4.6 billion tab for state employees’ salaries and benefits by 15 percent. The lawmakers’ proposal was accompanied by a 34-page presentation of statistics that showed state workers enjoy pay, benefits and time off from work (vacation, holiday, sick and personal days) exceeding the average received by workers in New Jersey’s private sector. It also highlighted the fact state employees only put in a 35 hour work week.

Sweeney, Moriarty and Green displayed charts comparing the state's "Government World" with the "Real World."

"We cannot afford this government," said Sen. Stephen Sweeney (D-Gloucester), himself a business official with the Ironworkers union. "We need to get realistic with what we offer. We need the real world."

"This is not an attack on unions or employees, but we deal with reality," said Green. "The state of New Jersey cannot afford the luxury we had in the past."

We have been pointing out the negative impact the growth in government jobs has had on the state’s budget, as well as, the same facts about public employee salaries and benefits for more than a year. We’ve been met with a similar reaction as received by Sweeney, Moriarty and Green.

“This is frankly the kind of rhetoric we would expect from a right-wing Republican,” said Bob Master, regional legislative political director for the Communications Workers of America, the largest state union, which represents 35,000 state employees.

"I think it's an outrageous comment for a guy who purports to be a friend of working people," he said. "It's the kind of thing you would expect to hear from a Bush Republican, not a labor Democrat."

Assemblyman Joseph Cryan of Union County, the state Democratic chairman, said "Frankly, I'm mystified that [Sweeney] would take such an open and direct approach."

Apparently Bob Master and Cryan only expect to hear facts, logic and fairness from right-wing Bush Republicans. Imagine three Democrats willing to stand up and represent the more than three million workers in New Jersey who are not government employees.

Sweeney said he was angered by a union flyer that asked legislators to support a proposed increase in the sales tax from 6 percent to 7 percent - "so that," he said, "state workers don't have to experience the pain that every taxpayer in the state is going to experience."

Governor Corzine’s spokesman, Anthony Coley, said "the governor has no plans to tamper with the provisions of current contracts".

But there is something the Governor can do if public employees won’t voluntarily agree to give-backs; he can cut the size of the state’s workforce. The fastest growing employment sector in New Jersey is government, with the increase in state employees being the greatest. As we’ve said before, the size of the state’s workforce in not governed by contract.

Governor Corzine said he wanted alternatives to his 9.2 percent budget increase and the largest tax increase in New Jersey’s history – well here are few more for him to chew on. Let’s see if Corzine’s really up to making “hard choices’”.

Federal Reserve Chairman Alan Greenspan today warned about huge looming fiscal strains from government health and retirement programs that pose "significant" risks to the U.S. economy.

"Tax increases of sufficient dimension to deal with our looming fiscal problems arguably pose significant risks to economic growth and the revenue base," he said, reiterating his conviction that the government should seek to "close the fiscal gap primarily, if not wholly, from the outlay side."

Acting Governor Codey confronted similar issues in the preparation of New Jersey’s budget last winter. “Each year the state's fixed costs grow larger and larger and consume more and more of the budget. This is an issue we can no longer ignore.”

Faced with the unsustainable growth in the cost of healthcare and pension benefits for state and local government workers, Codey established a Benefits Review Task Force to recommend ways to reverse this trend.

Yesterday the New Jersey Report of the Benefits Review Task Force was released. The task force concluded:

The current process for reviewing benefits is haphazard at best and excessively influenced by political instead of fiscal motivations. The non-stop requests (and too often action) for legislative action have eroded the state’s fiscal health and created a benefit structure that the State cannot currently afford.

The benefit enhancement process far too frequently happens in the complete absence of an informed debate on the actual costs of the change, yet alone how it will be paid for over the long term. And far too often, the taxpayer’s interests are absent.

Unfortunately, the record remains unbroken as the interests of taxpayers are virtually absent from task force recommendations. The task force apparently was prevented by certain members from using the private sector for comparison purposes and from recommending major changes to benefit structures. Further, the task force did not study other “fringe benefits totaling approximately $5.2 billion annually” as it was not within the scope of their charge.

There are differences between the public and private sectors that complicate a pure comparison between the two. The Task Force spent a great deal of time comparing and debating public versus private sector compensation structures. At the end, we agreed to disagree.

The Task Force attempted to ensure that every stakeholder contributed toward solving the problem, without unduly burdening any particular group. For reasons explained below, we rejected a massive structural change such as a move to a defined contribution plan. Instead, we made more targeted strategic reforms designed to maintain the current systems with modifications.

While the task force specifically concludes New Jersey has “a benefit structure that the State cannot currently afford”, the group ultimately recommends this structure be maintained. The task force recommends changes around the margins and avoids those that would result in major long–term savings to taxpayers:

Increase the retirement age from 55 to 60

Base pensions on the highest five years of salaries rather than the highest three years and in cases where pensions are based on highest single year use highest 3 years

Increase the minimum annual salary for inclusion in the pension system from $1,500 to $5,000

Put an end to pension tacking, padding and boosting and end early retirement incentives

Employees should no longer be permitted to take loans against their pension fund contributions as employees have been charged less than half of the state required rate of return

Revisit legislation that provided parameters for simultaneously receiving a public pension and a full public salary

Implement the state’s cap on sick day payouts of $15,000 to local government levels
End pensions for non-government employees and public officials convicted of crimes

Offer elected and appointed individuals a defined contribution (401k style) plan rather than the currently offered defined benefit plan

Retirees and current employees should contribute toward the cost of health insurance – at least 5%

Reduce prescription drug costs by: contracting directly with a Pharmacy Benefit Manager (PBM)*; encourage greater generic drug utilization; require mandatory mail-order for maintenance prescriptions

Immediately apply health care benefits changes negotiated by the State in the last contract to local employers and employees, consistent with historical practice

Provide greater health insurance options for local negotiations

Revamp governance process for benefit enhancements

Use consistent and generally accepted actuarial standards to determine pension fund asset values, obligations and annual contributions

To sure up the pension funds the task force recommends:

Immediately reduce the Defined Benefits Plans’ [pension funds] $12.1 Billion deficiency by selling state assets

In the future make annual full, actuarially sound pension payments

Unbelievably, a task force charged with reducing the escalating costs of government employee benefits couldn’t resist recommending benefit enhancements themselves:

Change vesting from 10 years to five (5) years. Lower the vesting requirements from 10 years to five (5) years. The vesting requirement reflects the years of service credit in the retirement system necessary for the employee to be entitled to future retirement benefits.

While the Task Force considered that if vesting were to remain at 10 years it would prevent more pension liabilities, it considers the cost of lowering the requirement to five (5) years to be minimal.

While the Task Force acknowledges “early retirement incentives have provided limited, short-term savings in exchange for large, long-term retirement system liabilities”, they now suggest the introduction of severance packages.

To avoid a “brain drain” the task force foresees “programs to encourage older employees to continue to work may be necessary.” And finally the group recommends the state “offer a life-long survivors benefit.”

* We had to laugh when we read this recommendation – this is the service Doug Forrester’s BeneCard business provides. It was constantly denigrated by Democrats, especially Jon Corzine in the governor’s race last month.

Codey: State Pensions, Benefits "Strangling" New Jersey Taxpayers

New Jersey's finances are in such a mess that even Acting Governor Codey is admitting it will take years to put the state back on solid footing. What is a major cause of our State budget nightmare?

Codey puts a lot of blame on generous pension and benefit packages for state employees and retired teachers that squeeze New Jersey's budgets. If anything, we've got to pull back from these entitlements that are strangling the taxpayers of New Jersey.

The tax receivers will be out in force pressuring the Democrats to maintain the status quo and to place their interests above all others and especially above the taxpayer’s. State and local government can not continue the lavish spending on government employee benefits and retirement packages.

Why should people that can’t afford to pay for their own health care insurance or to fund their retirement be forced to pay for benefits not available in even the most generous private sector programs?

The fall back position of tax “the rich, aside from being unfair, is not a long term solution to covering these escalating costs. There are not enough “rich” taxpayers to soak and rich is currently defined as those making $70,000 a year.

The $2.2 billion annual state price tag for teacher and public employee health insurance and retirement benefits is expected to triple in just five years. At the current pace, those costs will soar to $6.7 billion by the time the state budget is drafted in 2009, and account for more than one-fifth of all state spending.

Make your voice heard and tell your State Senator and Assemblyman to take action now. If they fail to act on behalf of the taxpayers, we do have the power to elect replacements this November that will understand their job and will act on their responsibilities.