Stuff in the ‘Pension and Benefit Crisis’ Category
NJ Debt Worst in America (Again), but Gov. Murphy Is Borrowing $4.5 billion More
Posted On09/23/2020 byTruth in Accounting came out with its “Financial State of the States 2020,” an annual report on how much debt-per-taxpayer each state owes. New Jersey once again ranked DEAD LAST in the nation for the SEVENTH STRAIGHT YEAR. Each NJ taxpayer owes a jaw-dropping $57,900 – which is $5,900 more than broke Illinois, the state…Read More
NJ to Borrow $4.5 billion to Make $4.7 billion Pension Payment: NJ Taxpayers on the Hook
Posted On09/22/2020 byAccording to the Star-Ledger, New Jersey’s FY2021 budget will borrow $4.5 billion in bonds. That’s more than 10% of the entire budget. Where is NJ going to get the money to plug the budget gap next year? I guess we should hope that economy does really well – despite the additional taxes on millionaires, corporations…Read More
Gov. Murphy, Using Bonds to Pay Down Pension Debt Is Essentially Another POB Deal
Posted On09/15/2020 byJon Reitmeyer of NJSpotlight writes that State Treasury officials support the idea of issuing $4 billion in bonds so the State can make a $4.9 billion pension contribution ($4.2 billion of which is making up for past pension underfunding). The idea is apparently that the State can borrow at 2% (at an annual cost of…Read More
NJBIA’s Siekerka Is on Target: Gov. Murphy’s $4.9 billion for Pensions Is Throwing Good Money after Bad
Posted On09/04/2020 byNew Jersey Business and Industry Association (NJBIA) president Michelle Siekerka penned an op-ed in NJ Spotlight today that made several excellent points. Among them: Cut the fiscal year 2021 public employee pension contribution: “we should remind ourselves that whatever dollar figure is settled on will still go toward a broken and unsustainable system, which will…Read More
The NJEA Hits the Trifecta with Murphy’s Budget; the Rest of NJ, Not So Much
Posted On08/26/2020 byGovernor Murphy presented a nine-month FY2021 budget yesterday that props up state government spending by issuing bonds and raising taxes. As analyzed by NJ Spotlight’s Jon Reitmeyer, there is virtually no state government belt-tightening: state spending will “still top $40 billion for a traditional 12-month fiscal year … even as he is projecting steep revenue…Read More
Murphy Wins at Supreme Court but NJ’s Future Generations Lose
Posted On08/14/2020 byCongratulations, Governor Murphy. Unsurprisingly, the NJ Supreme Court has ruled unanimously that you get to borrow up to $9.9 billion to cover budget gaps due to shortfalls and costs related to COVID19. This is good news for NJ’s most powerful special interests, the public sector unions, who are Murphy’s political supporters. Unfortunately, this is bad news…Read More
New BEA Analysis Confirms NJ Public Pensions as Worst-Funded in Nation
Posted On07/24/2020 byAnd this was before COVID19 hit. The US Bureau of Economic Analysis did a laudable analysis of defined benefit pension plans across the country. BEA used a constant set of methods and assumptions so that in looking at the various plans, BEA was comparing apples to apples. Importantly, BEA used a 4% discount rate for…Read More
Worrisome Sign: Pension Assets Drop to $75 Billion, Funded Ratio to 35 Percent
Posted On07/23/2020 byNJ’s Division of Investment provided an update on pension assets. As of April 30, the assets had dropped to $75 billion from $81 billion, or -8.1%, due to the decrease in the market value of the investments. With the system’s liabilities at $212 billion, this means that the funded ratio dropped from 38.4 % to…Read More
Success of New Healthcare Law Depends on Persuading Teachers: Will the NJEA Deliver?
Posted On07/02/2020 byAfter months of behind-the-scenes negotiation and to widespread acclaim, Governor Murphy signed into law S-2273/A-20, a healthcare reform bill that promises to reduce the cost of health benefits for both teachers and taxpayers. This widely praised new law aims to reduce school district (and thus taxpayer) costs by $640 million per year and teacher costs…Read More
Truth In Accounting: If NJ Borrows $5 Billion, It Won’t Be Able to Pay It Back
Posted On06/11/2020 bySheila Weinberg, CEO of Truth In Accounting, wrote an excellent op-ed in NJSpotlight (here). Weinberg cautions that if NJ borrows $5 billion to plug its current budget gap, it will be unlikely that NJ can generate the surpluses needed to pay the loan back in three years (the term of Federal Reserve loans). This is…Read More