The Record is reporting that even after New Jersey’s pension system has been reformed that employees of the NJ League of Municipalities, the NJ School Boards Association and the NJ Association of Counties are eligible to collect state pensions.
As of 2009, retirees of those lobbying groups were collecting pension of $1.3 million annually, according to The Record.
Senate President Steve Sweeney and Assembly Speaker Sheila Oliver say they are working on the problem.
PBA #314 President Joe Tuohy has jumped into the fray over the PBA charges against Assemblyman Dave Rible over at Jim Hogan’s blog.
Tuohy disputes some of the figures Jim used in his post and says he supports the PBA action against Rible.
Police unions complaining like this is really unseemly. Even with the recent reforms, New Jersey police officers have an extremely enviable deal.
I admit…I’m envious! A high school buddy of mine retired from a NJ police force a little over a year ago. His take home pay from his pension is $20 per month less than he was taking home when he was going to work every day! I wish I had a deal like that at 52 years old. If my friend lives to be 82 he’ll collect over $2.5 million. That doesn’t count the cost of his health care.
Even with the recent reforms, I’m concerned about the economic sustainability of such a system.
Worse, we’re laying off police officers in high crime areas while we are paying able bodied men and women not to “protect and serve.” That is why, “people are going to die,” as Senate President Steve Sweeney said. They’re not going to die because of Governor Christie’s budget cuts.
Yesterday there were four real Jersey guys on the radio from 5PM-6PM for what might have been the last LaRossa and Gallagher Radio Show on WIFIAM1460.
I’m not knocking THE Jersey Guys, Casey, Rossi and Bob Ingle on Fridays, formerly of 101.5 FM. I enjoyed their show and listened to it whenever I was on the road in the afternoon. My favorite all time show was Casey screaming, “YOU’RE LOSING VOTES RIGHT NOW” at gubernatorial candidate Chris Christie during the 2009 primary campaign while Christie was trying to finesse an answer to a particularly blunt question.
I think 101.5 was nuts to cancel the show that they themselves promoted as the most successful afternoon radio show in the country. I doubt the petition to get the show back on the air will make any difference, but if you want to be part of it, you can do so here.
As good as the show was, my friend Tommy DeSeno is right. As talented as they are, Casey, Rossi and Ingle are not really Jersey guys. Casey’s from California, Rossi from Brooklyn and Ingle from Georgia. They’re not Jersey guys like the four natives who were on the radio yesterday afternoon, my partner Senator Dick LaRossa born in Trenton on July 1 (Happy Birthday Dick!), Assemblyman Declan O’Scanlon, Fair Haven Mayor Mike Halfacre, and yours truly.
Straight Talk On The Pension and Health Care Reforms
While our show was not nearly as funny as THE Jersey Guys, it was the most informative and honest report of the pension and benefits reform package anywhere to date, if I do say so myself.
My hat is off to Declan O’Scanlon for coming back on the show for second week in a row knowing that I was not buying the hype of the “landmark” nature of the reforms and for answering our questions frankly.
O’Scanlon is high on the impact the reforms are making compared to what would have happened if the status quo continued. However, with only a little dancing, he did acknowledge that without significant economic growth, New Jersey will be in deep doo doo as the taxpayers increase their state pension contributions by $500 million each year over the next seven years. That doesn’t include the municipal pension contributions that come from property taxes.
Botton line…there is a very real possibility that the pension reforms in particular will lead to large tax increases on the state and local levels and/or draconian spending cuts. O’Scanlon did not dispute that. He argued things would be much worse had the administration and legislature done nothing.
During the second half hour Halfacre was upbeat about 1) the fact that the deal could have been done at all given the historical nature of things in Trenton, and 2) the savings Fair Haven taxpayers will realize from the health care end of the reforms.
The highlight of the show was Halfacre’s explanation of how he and the Fair Haven Council have been able to lower property taxes three years in a row and counting: 1) Saying no, 2) Pissing people off, 3) Standing firm when the pissed off people are yelling at you, 4) Doing all of that and getting reelected.
Why was Tuesday’s show perhaps the last LaRossa and Gallagher Show? Dick and I are thinking of changing the name of the show to The Jersey Guys or The Real Jersey Guys. We’re hoping Millennium Radio will issue and cease and desist letter or maybe even sue us so we can get lots of free publicity and beat out Deminski and Doyle on Tuesday afternoons.
Editors note: The following column by Dan Jacobson was originally published in the June 16, 2011 edition of the triCityNews. It was written before the recent agreement of pension and health care reform struck by Governor Christie, Senate President Sweeney and Assembly Speaker Oliver.
By Dan Jacobson
Any day now, you’ll see our Republican Governor and Democratic legislative leaders announce a deal to “reform” our state pension system.
Don’t believe it. This is a problem requiring 20 years of fiscal discipline. These people can’t see beyond the next election in 20 weeks.
Our state government is $121 billion short of what’s needed to pay projected pension and retiree health benefits. How bad is it? This year’s proposed state budget is only $29.4 billion.
In other words, we’re bankrupt.
Remember the rioting in Greece last year? You bet there could be tear gas over Trenton if this isn’t fixed. And I’m not optimistic.
Last week, I announced I’m running for the state Assembly as an Independent. So let me piss off everyone by outlining what needs to be done. And it’s ugly. No way around it.
First, this problem must be ripped away from the politicians. I’d propose a state constitutional amendment – requiring voter approval – to establish an independent Board of Trustees to administer the pension and retirement health benefits system.
Each year, these independent Trustees would recalculate the total projected shortfall the state faces. No fudging the numbers by politicians. And the Board of Trustees would develop and oversee a long-term plan to restore the system – and thus the state’s finances – to solvency.
In addition, the Board would determine the annual contribution to the system – and it would have to be paid by the state. The elected officials have underfunded it for 15 years. With a constitutional amendment, that would end. No more cheating. We’d pay what’s needed to fix the problem.
And the Board of Trustees would be empowered to do what the politicians can’t: Set up a plan of benefit cuts and tax increases to fix the system by spreading the pain as widely as possible. And the wider it’s spread, the less it hurts everyone individually. Everyone has got to take a hit. We’re all in this mess together.
By the way, those benefit cuts would affect current and future retires already in the system. There’s no other way to do it. Elected officials only talk about changing the benefits for new employees. That’s not enough. So I envision everyone equally screaming – taxpayers, retirees, future retirees – when the Trustees propose a plan to fix this mess. Ironically, that way you know it’s fair.
But this is not a dictatorship. The rescue plan from the Board of Trustees would be submitted for voter approval.
If voters reject it, the Pension Trustees would simply take what’s needed every year from the state Treasury to ensure the system’s solvency. In that scenario, the three-ring circus in the State House – the Governor, the Assembly and the Senate – would figure out how to pay that annual bill. Of course, that will be a mess. But the bill would be paid. No more underfunding the system. No more postponing Judgment Day. I’d rather face it on our terms.
There you have it. That’s the basic outlines of my proposal. Here’s some more details:
The Board of Pension Trustees would be non-political like Judges. They’d be appointed by the Governor with the consent of the state Senate. None would have business or financial connection to unions for at least a decade, if not more. They’d have long and staggered terms as Trustees to minimize political interference.
And in putting together a rescue plan, their directive in the constitutional amendment would be quite specific: To implement a mix of both benefit cuts and tax increases – and it would specifically require both – to spread the burden as equitably as possible across all the citizens of this state.
Sure, that would require subjective judgments. There’s no mathematical formula to achieve this. But at least a rescue plan by the Trustees would be made in good faith by non-political appointees – not politicians seeking reelection. And voters would have the final say.
In other words, we’d face this problem like adults. We’d empower an independent group of people to tell us the truth. And propose a solution for us to consider. We’d then make the final call in a statewide vote.
Sure sounds better than tear gas canisters fired at protestors when a bankrupt state can’t pay its bills – and people become more outraged than anything we’ve ever seen in New Jersey.
But maybe all is not lost. Take the sentiment of retired state worker Vincent Lobascio, 85. He’s ready to sacrifice some of his benefits. Let’s hope most other citizens share his views – or we’re done.
“I’m willing to make my contribution, and I’m a retired guy,” the World War II combat veteran told the Asbury Park Press in a story about the pension crisis. “But don’t kill me.”
I’m with Mr. Lobascio. This 49 year-old taxpayer would pay more to solve this mess – just don’t kill me either. We’re all adults. We all know something must be done. Just spread that burden around as widely as possible. In the end, the solution is likely reasonable.
But politicians can’t do that because they’re competing for the support of blocs of voters – whether liberal union members or anti-tax conservatives. It’s all about getting elected. In fact, both those voter blocs I just mentioned will be outraged at this column.
Oh well. So I’ll get to remain a private citizen. Wow, what a tragedy.
So when you see our Republican Governor and Democratic legislative leaders announce some deal to address this problem, remember this: It’s all about the election in five months when the Senate and Assembly are up for grabs. It’s not a permanent deal. It can always be reversed or changed later. And you bet that will happen when the economy starts to do better and no one is paying attention.
Sure, they’ll make some progress with their deal – just enough to con you to think something is getting done. But not on a scale that really solves this problem. There’s not enough political upside and way too much political downside. The state has never faced a challenge this big. Plus, I don’t believe any figures or estimates these clowns throw around. They’re all biased toward getting reelected.
But a constitutional amendment empowering an independent Board of Trustees goes a long way toward eliminating political mischief.
And in my proposal, we’d even get to vote on any rescue plans from the Trustees. If they want to modify a rescue plan later, we’d all vote on that too. If any plan is rejected, the state would still fully fund the retirement system every year and stop the cheating. Imagine how different everything would be if that was done for the past 15 years.
Hey, such a constitutional amendment sounds reasonable to me. That means it doesn’t have a chance in Trenton.
So in the most unlikely event I get elected to the Assembly – only one Independent has done so in 50 years – at least there’d be one person down there speaking the truth about the most dangerous problem this state has ever faced.
(The 11th District where I’m running includes: Asbury Park, Long Branch, Red Bank, Ocean Township, Neptune, Neptune City, Interlaken, Deal, Allenhurst, Loch Arbour, West Long Branch, Eatontown, Shrewsbury Borough, Shrewsbury Township, Tinton Falls, Colts Neck, Freehold Township and Freehold Borough.)
Trenton, NJ – This evening, Governor Chris Christie, Senate President Stephen Sweeney, Assembly Speaker Sheila Oliver, Senate Minority Leader Thomas Kean, Jr. and Assembly Minority Leader Alex DeCroce released the following joint statement:
“After months of serious discussions, we are pleased to announce that we have reached agreement on legislation to reform our public pension and health benefits systems in New Jersey.
“The legislation to be considered tomorrow by the Senate Budget Committee and Monday by the Assembly Budget Committee protects taxpayers, saves the public pension system for current and future retirees, and enhances fairness and choice in our health benefits system.
“We all fully support this legislation and will work together to assure its passage by both houses of the Legislature and enactment into law no later than June 30, 2011.”
Now that Senate President Stephen Sweeney has agreed with Assembly Speaker Sheila Oliver’s proposal that government employee pension and health benefit reforms be temporary and guts key elements of the reforms that Governor Christie and Sweeney agreed to, it seems as though we are in danger of business as usual prevailing in Trenton.
If Governor Chris Christie goes along with this “compromise,” real sustainable reform of New Jersey’s government is not going to happen. “Reform” will just be a short term fix to get us through the tough economic times made with the rosy assumption that the economy will improve to the point where we can afford to bestow free health care and overly generous pensions to our “public servants.”
What I found most alarming about this Star Ledgerarticle was not that Sweeney and Oliver may have outmaneuvered Christie (InTheLobby speculates that the unions have already agreed to the deal despite their public protests to the contrary and that Christie will go along with it), but the fact that the deal effects the state’s 500,000 public workers.
That’s one public worker for every 17 New Jersey residents.
I’m assuming that includes county and municipal workers, as the U.S. Census reports that NJ has 154,000 state employees and 360,000 local government employees. Will legislation currently being negotiated in Trenton override contracts that counties and municipalities already have in place? If so, that would be terrible for Middletown taxpayers where the the governing body got the police to agree to pay 25% of their health care in order to avoid layoffs. How would the 2% property tax cap work if the State makes deals that override better deals that municipal governments have negotiated.
Hopefully the Star Ledger reporter got his figures wrong.
Regardless of the largess we bestow on state and local government employees, 500,000 employees “serving” 8.7 million people seems like awfully big government. And that doesn’t include federal government employees located in New Jersey.
I various government websites for about an hour trying to find how many federal government employees are located in New Jersey. I found that the federal government, with 2,000,000 employees, not including the post office, is the nation’s largest employer. 85% of federal employees are located outside of the Washington DC metro area. But I couldn’t find a state by state break down of the employees. I wonder why that information is so hard to find.
Let’s assume its only 50,000 between Homeland Security, the military, law enforcement and social security offices.
That would mean that in New Jersey, one in every 16 people is on the government payroll.
It is little wonder that New Jersey is rank next to last in freedom.
I’m not talking about her lascivious lifestyle—that’s no longer newsworthy and I still don’t get the entertainment allure of the train wreck while there are so many real disasters on TV.
I’m talking about her $32K speaking engagement at Rutgers.
Compared to the largess that Rutgers is bestowing on outgoing president Richard McCormick, Snooki’s $32K is cheap. McCormick with receive a one year paid sabbatical at his salary of $550,000. After his full year paid vacation he will return to the faculty as a history professor with a $335,000 salary.
I don’t have a major gripe with McCormick personally. His is just one more example of a golden parachute for a government employee . I was surprised to read that he is making only $550,000 to lead the 57,000 student university. That sounds cheap compared to former Brookdale College President Peter Burnham’s salary and perks before Freeholder John Curley tore down that ivory tower. McCormick’s compensation sounds cheap, given the job, compared to the numerous $200K plus superintendent of school salaries we’ve read about throughout New Jersey before Governor Christie reformed that absurdity. McCormick’s golden parachute is a bargin compared the almost $800K the former superintendent of the Keansburg schools tried make off with.
McCormick hasn’t been as blantently greedy as some in government. He refused to take raises to his salary from 2002 through 2008 and he hasn’t taken another raise since the 4.75% bump he got in 2008. Also, in 2008 he donated the $100K performance bonus that the Board of Trustees awarded him back to the university to fund financial aid to students based on need and performance. It’s tough to make a case that McCormick’s a bad guy.
But the system that the government class designed for themselves and continues to exploit is increasingly tough to take and increasingly difficult to pay for. It’s tough to write the tax check knowing that too much of it is going to pay high five figure pensions and lifetime health benifits for men and women in their forties and fifties. McCormick’s case is just the latest reminder of all that is broken in New Jersey.
The Star Ledger is reporting that the Treasury Department has initiated an investigation into sheriff’s officers in Essex, Monmouth and Union counties who are collecting pensions from the state Police and Firemen’s Retirement System (PFRS) whilecontinuing to perform as law enforcement officers, but with civilian titles, allowing them to “double dip”….collect a pension and a salary for job that would not allow for collecting a pension if it were properly classified.
In addition to the Treasury Department probe, John Scierchio, chairman of the PFRS board of trustees, has asked the Attorney General’s Office to launch a criminal probe into three sheriff’s officers suspected of circumventing pension guidelines, according to the StarLedger.
The three officers are Monmouth County undersheriff Mickey Donovan, formerly the chief warrant officer, Essex County chief warrant officer John Dough, and Union County sheriff’s chief Harold Gibson.
This issue was first raised publically regarding Donovan, who retired from the Monmouth County Prosecutor’s Office in 2005 and was hired as Monmouth’s chief warant officer by then Monmouth County Sheriff, now Lt. Governor, Kim Guadagno in 2008, last October by NJ Watchdog.
NJ Watchdog alleges that Guadagno, as Sheriff, eliminated the chief warrant officer position on September 16, 2008, but then gave Donovan that title a week later, even though he was hired in reality to be the chief law enforcement officer, so that he could collect a pension of $85,000 per year and a salary of $87,500 per year.
In a piece published on April 11, 2011, NJ Watchdog says that Donovan has improperly collected $227,000 in pension payments since 2008. Additionally, he should have contributed $18,000 to the pension system, according to NJ Watchdog.
Guadagno declined to comment when MMM raised this issue with her when it became public in October.
Shaun Golden, then Acting Sheriff, told MMM in October that he had discussed Donovan’s employment status with state pension official months earlier and offered to make any changes they required. There were no changes required at the time. Golden said he told the officials that if they require changes in Monmoth County that they should also look into Essex and Union Counties.
The State of New Jersey is a financial basket case.The recent report that the state has not set aside one dime to pay for the promised ($66.7 billion) medical benefits of current and future retirees is another example of nonfeasance on the part of our elected officials.
By failing to fund the medical benefits of state and local government workers, the state is on a road that will cause enormous economic hardship for the people of New Jersey.In short, to pay for all the promised benefits, taxes will have to skyrocket, which will lead to a mass exodus of productive individuals and businesses over time.In addition, businesses will not expand or relocate to New Jersey because of the onerous taxes that will have to be imposed to prop up the medical benefits fund.
Even if benefits are reduced for current and future retirees, which is highly likely, who in their right mind will trust the political hacks in Trenton to be born again fiscally responsible politicians?
For years, Republican and Democratic governors and members of the state legislature from both political parties have failed to perform their duties to maintain the state’s fiscal health.Now that the chickens are coming home to roost, what is being done to correct the gross shortfall in the state’s obligations?Before we answer that, another report released on April 26th reveals the state’s pension fund is $54 billion in the hole.
Can anyone say criminal indictment?If a corporation’s officials did not fund their employees’ retirement benefits, they would be fired and/or possible fined or even indicted by the federal government for failing to fulfill their fiduciary duties.In New Jersey, we just keep electing the same gang of self-serving career pols from gerrymandered legislative districts who exploit the public’s income and wealth to maintain their political careers and continue the great con, the redistribution of income.
(One legislative solution is to elect at large members of the legislature instead of from specific legislative districts. Alternatively, we could elect half of the legislature from the gerrymandered districts and half at large members. With at large members of the legislature, all taxpayers will be represented.)
The financial solution to the $120 billion underfunding of retirees’ pensions and medical benefits is for the state to invoke something like force majeure and start from scratch.That will send a strong signal to New Jerseyans and businesses, especially those from out of state that the politicians in Trenton will be fiscally responsible and not make promises they cannot keep.
Without an “extreme makeover,” New Jersey will become the Greece of the United States.
Murray Sabrin is professor of finance at Ramapo College and blogs at www.MurraySabrin.com
