Pension Reform: “It’s NOT My Way or the Highway”

“The lower [bond] rating reflects our concern regarding the stresses from the state’s poorly funded pension system, substantial post-employment obligations and above-average debt levels.” – Standard & Poor’s analyst Jeffrey Panger (02/09/11)

Governor Christie has been delinquent in carrying out his duties to fund the pension system. In early 2010 he removed monies in Governor Corzine’s budget and did not make the anticipated State contribution to the plan. Likewise, in his current budget he has no funds to pay into the plan. Nor has he committed to making a payment in the upcoming year.  It is not surprising for an analyst to point out “the state’s poorly funded pension system.”

The Democratic led legislature in March 2010 working with the governor passed reforms that required public workers to contribute 1.5 percent of their salaries toward health insurance and removed part-timers from the system.  This week Senate President Sweeney introduced a plan that in part would in part create labor-management boards to set workers’ annual pension contributions based on the solvency of the system. The Governor and Republican legislators have their own more draconian proposal.  

Borrowing with reasonable rates is important for all states. However, Christie’s efforts to blame the lower bond rating on the Democrats is lame. It is a shared responsibility, and with roots in past administrations. Rather than his “My way or the highway,” approach, it is time for the governor to engage in substantive negotiations with the Democrats. Those who have invested into the system have every reason to demand him to contribute to the plan and to seek a workable solution with the legislature. The problem is real, but posturing and playing the “blame game” won’t solve it.  

Comments (7)

  1. firstamend07

    The Governor keeps talking about how the Legislature has not ” moved” on his pension reform ideas.

    Chrisite could have easily circumvented the legislature and started negotiations with the state worker unions.

    It was within his power to negotiate the changes himself.

    You gotta hand it to him though. This guy is truly the ultimate Teflon politician. He has been in office for 13 months and he is still blaming everyone but himself for the state shortcomings.

    Christie will have a tough time getting his way on pension reform. Sweeney ” owns ” this issue and has come up with a very innovative and practical plan. It is not perfect but it is a lot better than Christie’s.

    I predict that Sweeney will get 80% of what he wants and Christie will get thrown a bone.    

    Reply
  2. 12mileseastofTrenton

    The 1.5% applied to teachers.  Most public employees have been paying at least that for some time.

    Reply
  3. William Weber (WjcW)

    Sweeney’s idea. (am I typing this?)

    But let’s face it, the state historically has shown it can’t be repsonsible for allocating responsible funding levels for pensions.

    I’m hoping that some of Christie’s cost reducing reforms are traded for Sweeney’s idea of an independent board deciding how much the state and/or employees contribute.

    Reply
  4. sandy23

    which seems to be the latest class of scapegoats for those who don’t want to do what they should.

    When I started working in 1969, I signed a contract which required me to contribute to my pension account.  The State was required to contribute also.  Every two weeks pension payments were taken out of my pay, for a period of 21 YEARS.  Unfortunately in 8 of the past 12 years the State did not live up to it’s part of the contract.

    After vesting my pension when I left public service, I am finally eligible to collect an astounding $900/month (which is taxable).  Now I am the problem????

    Not all public retirees are “freeloaders”, we did an honest days work for an honest days pay for many years.  All we have asked for is that the State live up to it’s contract obligations.

    If millionaires can get tax breaks and perks, why can’t we just get what is rightfully ours.

    Reply

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