From 1998 to 2007, local governments were given an unprecedented and lucrativeopportunity to skip or reduce their required payments into the Police and Firemen’sRetirement System (PFRS). At the height of the Pension Holiday from 2001 to 2004, localgovernments contributed only 12% of their required PFRS pension and ERI contributions.This lack of funding not only crippled the health of the PFRS today but also has placedlocal governments in the situation of having to make up for this reckless practice now,much like the person who overspends on a credit card and who regrets it only whenthe bill arrives.
You listening, Mayor Bollwage? Maybe if you don't believe the cops, you'll listen to CNN:Now rather than admit they misspent the “savings” from skipping required pensioncontributions, local governments are threatening layoffs and mergers of policedepartments. This argument is not only irresponsible but dangerous for public safety.The position of local governments that PFRS pensions and police salaries are the causeof rising property taxes must be challenged and it is critical that PBA members beproperly educated on the facts of why local governments are paying higher PFRScontributions today and what it all means to the health of the pension system and localtaxpayers.
Blaming public workers for this is a total sham and a disgrace. I blame Florio and Whitman and McGreevey and Corzine and a lot of those legislators for getting us here, but I blame Christie here and now for not telling the truth about this: our state's fiscal mess is not the fault of greedy public service workers - it is the fault of incompetent politicians.To better understand this ticking time bomb it helps to focus on a single state, and New Jersey makes a compelling case study. For one thing, its situation is dire. In June 2008 the state estimated that the plan - one of the nation's largest, covering teachers, state employees, firefighters, and police - had $34 billion less than it needed to meet its obligations. Since then the market value of the plan has dropped from $82 billion to $56 billion (a new estimate of underfunding is due in July).Also, New Jersey is in some ways ahead of the pack in trying to deal with the crisis - Gov. Jon Corzine, a Democrat, made addressing the problem a central theme of his 2005 campaign - and the obstacles it is encountering shed light on the hard choices facing other states."The pension obligations could spark a huge problem for New Jersey," says Thomas Kean, a former Republican governor. "They must be paid because they are absolutely an obligation of the state, but as it is, the budget is balanced with chewing gum and sealing wax."
Oh, and I'm going to add someone else to the blame list - the unions. But not because they were out advocating for their members. No, I blame the unions for not keeping an eye on what was happening. They should have demanded that the pension be professionally managed - they didn't. Now, their members suffer.
The CNN report above is instructive, but the framing is typical anti-worker claptrap:
The Tax Foundation says New Jersey charges the highest state and local taxes in the country, the highest residential and commercial property taxes, and some of the highest sin taxes in the nation on cigarettes and alcohol.Bull. We are 31 our of 50 for taxes. This lying has to stop.
But our congressman from the 7th weighed in as well:
To Leonard Lance, the pension blowup is one more consequence of the financial recklessness that defined an era. "In so many areas there has been inappropriate spending," he says. "Now we all have to pay."No, no, no, NO! I will grant you there is waste and inefficiency and fraud and abuse in the State of NJ. As there is at GM, BP, Apple, Microsoft, Ford, GE, Citibank...
No, the problem was never spending - it was HOW we collect taxes. Because getting rid of the regressive and insane property taxes in this state would have put more of our tax burden on the wealthy, and this must never, ever, EVER be allowed to happen.
So we kept the property tax as the primary funder of schools and localities, and when it turned out to be too onerous to the working people of this state, we played games and gave pension "holidays" and imperiled the future of people who teach our kids and protect us and serve our state's needs.
And now, we blame those same people for this mess. We denigrate them and destroy their morale and ensure that their professions are vilified through a crass mass media. There was a time - right after 9-11 - where the thought of calling a cop greedy was sacrilege. Not any more.
So now what do we do? I don't have all of the answers, but I do know one thing:
We got in this mess because we refused to have the people who gained the most over the last 30 years pay their fair share to maintain a society that allowed them to prosper and succeed beyond most people's wildest imaginations.
Well, the working class and the middle class are tapped out. It's time the wealthiest of us started sacrificing as well.