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

Monday, February 23, 2015

Chris Christie's Bizarro World

You mean a state can't pass a bill and then proceed to ignore it?! Wow, who knew:
New Jersey lawmakers warned of potential "draconian" budget cuts to come up with $1.57 billion if the state is forced to make a full pension payment this year. 
A state Superior Court judge ruled today that unions are entitled to that payment as part of a 2011 pension overhaul law passed by the Democratic-led Legislature and signed by Republican Gov. Chris Christie that forced the state to increase its payments into the system.

"The impact on programs at the end of the year would be devastating," state Assembly Majority Leader Lou Greenwald (D-Camden) said.

But Greenwald said there could be a solution on the horizon. He said public workers unions had "come to the table with real suggestion and real reform to try to create a pension payment and longevity that is sustainable and reliable and predictable."

"The reality is we have to either make draconian cuts and make the payment," Greenwald said. "Or we have to be doing what we have been doing over the course of the last number of months, which is work hand-in-hand with the people that are most dramatically impacted by the pension, which is the public workers. It's their retirement."
I have no idea what that last part means. But notice the construction: either huge cuts, or a further change to the pension. Not even the Democratic Leader, it appears, can dare to suggest that maybe we need to collect more revenue.

It is a testament to how far out of touch this state is with reality that we won't even mention raising taxes when it's become increasingly clear we have to do just that. Judge Mary Jacobson is merely stating the obvious: a state can't just walk away from its debts when it is perfectly capable of raising more money.

But according to Christie, meeting your contractual obligations somehow makes you the equivalent of Che Guevara:
"Once again liberal judicial activism rears its head with the court trying to replace its own judgment for the judgment of the people who were elected to make these decisions," Christie spokesman Michael Drewniak said in a statement. 
"This budget was passed by the legislature and signed by the governor with a pension payment," he said. "The governor will continue to work on a practical solution to New Jersey's pension and health benefits problems while he appeals this decision to a higher court where we are confident the judgment of New Jersey's elected officials will be vindicated." [emphasis mine]
Yeah, you know what else was passed by the legislature and signed by the governor? The law that requires the state to make its pension payments!

Since when did ignoring the law become a conservative value? Since when was it considered liberal to do what you said you were going to do? Since when is it "judicial activism" for a court to insist that the executive and legislative beaches of the New Jersey government follow the laws they themselves wrote and passed?

Jacobson herself says it best:
"The Governor now takes the unusual position in this court of claiming that this legislative contractual guarantee, which embodied significant reforms for which he took substantial credit with great national fanfare, violates the New Jersey Constitution." 
"Despite the inherently limiting consequences of creating contractual rights through statutory language, the New Jersey Legislature deliberately and unequivocally created contractual rights for public employees for seven years of increasing state payments to support the actuarial soundness of the pension funds and to remedy decades of underfunding."  
"The court rejects defendants' position that finding Chapter 78 unconstitutional somehow does not result in the inevitable abandonment of the state's obligation to its employees and holds instead that the New Jersey Constitution does not bar enforcement of Chapter 78's contractual obligation." 
"Unsurprisingly, the governor does not make any promises that the budget for Fiscal Year 2016 will include a full payment for the pension systems. The court is unwilling to rely on what has now become a succession of empty promises.
"In short, the aim of the legislation is not being met. The goal of Chapter 78 was to reduce the unfunded liability to put the State pension system on sounder financial footing. The legislation defined what was reasonable, and the current underfunding falls far short of that goal. The state's failure to pay $1.57 billion is a substantial impairment both in terms of the absolute magnitude of the failure and as a percentage of the total payment that was expected under the statute." [emphasis mine]
That is exactly right: Christie and the Legislature passed Ben-Pen to great fanfare, and Christie ran around the state -- and then the country -- bragging about how was a mover and a shaker who knew how to get things done. Any time a public worker complained, Christie dressed them down, saying we should be grateful he "saved" our pensions.

But only the unions bothered to point out that the state needed to come up with an additional $5 billion a year in pension payments. The press certainly didn't seem to care that Christie didn't have a plan: editorial boards across the state lined up to endorse his re-election, but never bothered to ask how he would meet his pension obligations.

In a way, I can't blame Christie for lashing out at this inevitable ruling. Until recently, he's been living in Bizzaro World, a place where passing a pension bill that requires huge infusions of cash without any plan to raise revenues earns you the endorsement of the state's largest newspaper. The governor must be wondering why he's getting so much grief now; after all, he got a free pass back when it mattered...

I really don't know where any of this is going, but it's clear that any solution is going to have to involve raising more revenues. It's also clear that, so long as Chris Christie suffers from the delusion that one day he will hold national office, our governor will never agree to raising taxes.

Which means that this state is caught in a death spiral, trapped by the ambitions of a man who thinks keeping your word is a vice.

I'm sick of you liberal activist judges forcing me to obey my own laws!

4 comments:

Giuseppe said...

Absolutely taxes should be raised on the wealthy and the giant corporations; at the least, they should be paying their fair share in taxes. But raising taxes is political suicide for the politicians, I don't see them doing their fiscal duty which then leads to horrible scenarios. Default on the pensions or serious cuts in benefits? They already eliminated the COLA and increased pension contributions.

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Andrew Bayliss said...

Jazzman,

http://www.state.nj.us/treasury/pdf/NJEA-CommissionRoadmap-Final_February2015.pdf

What do you think of the NJEA signatures on this document? This may not be a detailed agreement, but it still freezes all current pension benefits. It preserves current retirees (or close to retiring benefits) and moves everyone else into a lesser/cheaper plan with less/cheaper health benefits plus shifts costs onto local districts. What is the NJEA doing?

Andrew

Glen Brown said...

Attacks on teachers’ pensions across this country: http://teacherpoetmusicianglenbrown.blogspot.com/search/label/pension%20analyses