I will protect your pensions. Nothing about your pension is going to change when I am governor. - Chris Christie, "An Open Letter to the Teachers of NJ" October, 2009

Thursday, February 2, 2012

Another Broken Christie Promise

Remember when Chris Christie told all of us public workers here in New Jersey that we had no choice but to accept his broken promises reforms?
“What this legislation will do will be simply to save the pension system for all of those retirees and public workers who are counting on it,” Christie said. “The only way to do that is to control spending -- there is no magic wand. But affordability comes at a price: There are choices to be made and sacrifices to share." [emphasis mine]
We teachers and cops and firefighters and social workers and nurses and DPW workers and everyone else has to "sacrifice," or our pensions were going to disappear. Straight-shootin' Chris was just telling us saps the truth we had been denied for so long:
At a town hall-style meeting in Camden County, Christie Tuesday said the state has to make its pension plans "more solvent and more honest," and argued the changes are necessary to protect pensions for workers before the system collapses.
"I’m saving their pension, that’s what I’m doing to the mid-career public employee," Christie said. "There may be some public employees right now who don’t like me because I’m prescribing tough medicine. But when the pension system gets well in a decade, I’m going to be their favorite governor. I’ll wait to get the thank-you notes then." [emphasis mine]
Sure, we'd be paying another 2% of our paychecks into the system, and the state wouldn't be making full payments on its share for another seven years, and he was breaking an explicit contract (which has led to the inevitable lawsuits - no wonder he wants to change the court, and fast), and he was eliminating cost of living increases for many elderly who had worked hard their whole lives for that benefit... but he was going to save the pension! Wouldn't you rather have half a loaf than no loaf? Wasn't it worth it?

Wasn't it?

New Jersey’s ability to move toward full pension contributions will be “challenging” and may conflict with goals such as controlling property-tax growth and funding schools and infrastructure, Fitch Ratings said.
Governor Chris Christie’s budget for the fiscal year that ends June 30 funds only 14 percent of the pension payment recommended by actuaries, even after his benefit changes enacted last year, Fitch said in a report today. Pension demands will rise if the state fails to achieve its 8.25 percent assumed return on investments, the company said.
New Jersey’s pension funds, with $67.2 billion of assets, returned 1.7 percent last year as gains from debt, private- equity and real estate investments tempered losses from global stocks. The funds have an annualized 10-year return of 5.1 percent, according to reports released last week by the treasury’s investment division.
The state’s estimated pension-funding deficit fell to $36.3 billion from $53.9 billion after passage of Christie’s benefits plan. The gap then swelled $5.5 billion to $41.8 billion for the 12 months through June after Christie skipped a pension payment. [emphasis mine]
Does anyone believe the funds are going to beat 8.25% any time soon?

Chris Christie broke explicit promises to public workers and retirees, and he broke his campaign promises. And his entire rationale - that he was "saving" the pensions - is now exposed as a complete farce. Saving the pensions requires that the state make its contributions; Christie is clearly blowing that off until he's out of office.

As I've said, pensions save taxpayers money. But a new generation of workers interested in public service are looking at the way this man blithely broke a contract with public workers. Do you think they will trust government pension promises after this?

This man is a human train wreck. He is a political and fiscal Godzilla, wreaking destruction across the state that will take decades to clean up. What's worse, he does so while a compliant, ill-informed, and often just plain stupid press cheers from the side.

This state is in for a bad few years, and it will all be on the head of Christie and the people who refused to hold him to account. Hunker down.


Anonymous said...

A snippet from a prescient Bob Herbert, February 22, 1995, Op Ed, titled, In America; Whitman Steals the Future:

Now many of he gains made over a quarter of a century are in danger of slipping away because the current Governor, Christine Todd Whitman, has chosen to finance her political ambitions with a popular buy-now, pay-later economic policy that will place a financial stranglehold on future generations of New Jerseyans.

This is best illustrated by Mrs. Whitman's decision to withhold billions of dollars that should be going into the public employee pension funds over the next few years, and using the bulk of that money to balance the state budget. Then, with an audacity that dazzles her supporters and even draws grudging admiration from opponents, Mrs. Whitman smiles and characterizes the withheld funds as savings.

Of course, they are not "savings" -- not in any sense of the word. The pension obligations at some point will come due and future generations will have to meet them.

Not only will the money have to be made up, but future taxpayers will be deprived of the income that the money -- if properly invested now -- would be expected to generate.

Mrs. Whitman's pension maneuvers have not gotten a lot of publicity -- in part because the eyes of reporters and readers alike tend to glaze over when confronted with complex budget details. The changes that she has made have been drastic. According to the New Jersey Education Association, which has filed suit against the state, the employer contributions to the pension system this year will be as much as 96 percent below the amounts contributed in the early 1990's.

The link for the whole article is:


Duke said...

Unbelievable. Great catch - I'm stealing it! ;-)