When You’re In a Deep Hole, You Have to Stop Digging

A WYNC article highlights the fight between Senate  President Sweeney and the public sector unions over retiree benefits.  Sweeney, who has proposed reforms to pensions and healthcare, has run into staunch opposition from the public unions, and likely from Gov. Murphy, too, who has received great support from these unions.

The public union members who have earned their retiree benefits cannot have them taken away.  That is not in dispute.  The problem is that the numbers don’t work.  Total unfunded liabilities for retirees are $190 billion.  This number will grow, as even the record $3.2 billion paid in last fiscal year does not meet the required amount.  By comparison, New Jersey’s annual budget is $38 billion.

By 2023, the amounts required to fund these retiree obligations will rise to $11 billion, or 26 percent of the budget.  How can New Jersey meet these debts? Where is the money going to come from?

Public workers who think that this can all work without reform are being misled.  One look at what happened in Detroit should help them understand that in a bankruptcy benefit promises might not be kept.  New Jersey’s system needs to be reformed or else their benefits may well be in jeopardy.

When you’re in a deep hole, you have to stop digging.

Read the full WNYC story here.