This isn’t new news but it’s also not good news. Pew Charitable Trusts updated its pension study to include 2018 data, and NJ comes in dead last among the 50 states. NJ only has 38 cents set aside for each dollar it owes. That means that 62 cents of every dollar owed is an unfunded liability – a debt that the state owes to retirees that will have to be paid off.
Even broke IL comes in better than NJ. The national funding average is 70.7%, so NJ is a huge outlier when it comes to fiscal irresponsibility. All of this shows why Gov. Murphy’s making a record $4.7 billion payment into NJ’s broken and unreformed pension system is throwing $4.7 billion of good money after bad. The governor is borrowing $4.5 billion to help him make this payment, which only increases NJ’s overall debt load, but $4.7 billion is still only 78% of the required payment, so NJ’s unfunded pension liabilities will also increase. What a waste of money that is much needed elsewhere during these COVID-stressed times!
As detailed in Sunlight’s latest report, “Ugly Truth and Hard Facts About New Jersey’s Pension Crisis,” 85% of Murphy’s $4.7 billion payment is for past underfunding, so current NJ citizens are paying the bill for past neglect. The pols deserve some blame of course, but as always, they were responding to political incentives and hoping for re-election. The fact is that the NJEA was the most powerful special interest in NJ during this time, and rather than use its unmatched political clout to secure its members’ pensions, it chose to participate in political deals that undermined pension funding.
Now that the pensions are becoming a big problem, the NJEA wants to erase its substantial role from history and blame it all on the pols. Don’t let them do it! The NJEA needs to be accountable to its members and the general public for its role in the demise of NJ’s pension system.