I got so caught up in Chris Cerf’s coronation yesterday that I never got around to this poignant moment:
Instead of vitriol and venom today, Gov. Chris Christie’s interaction with a teary public school teacher ended with an apology.
Tia McLaughlin invoked the Republican governor’s frequent refrain that it’s “harder to hate up close” in telling him she felt betrayed by his treatment of teachers when he took office two and half years ago.
“You’re right, it is much harder to hate up close because I’m not feeling the hate right now,” she said, standing in the crowd at the boardwalk Music Pier. “I never thought I’d get the opportunity to talk to you up close.”
She made copies of the letter he sent unions during the campaign that promised to leave their pensions alone and distributed them to the 12 schools in her district, but then he did what she called “a complete 180” with pension and benefits reforms that further soured his dealings with the NJEA, the state’s largest teachers union.
Christie said, if he runs for re-election again, he will likely pen another letter to unions explaining his new position.
“When I wrote that letter, I had no idea the pension system was about to go bankrupt,” he said, launching into his usual answer which puts the blame on prior governors for failing to address the problem. “Why are you getting angry at the first guy who’s telling you the truth?” [emphasis mine]
You may remember this famous letter from the fall of 2009: “I will protect your pensions. Nothing about your pension is going to change when I am governor. – Chris Christie” So now Christie’s excuse for writing it is that he had “no idea the pension was about to go bankrupt.”
Really? He “had no idea” the pensions were in trouble? Well, he was the only one in the whole damn state that was clueless. [all emphases mine]
Sometime later I looked at the state’s pension system in a Hall Institute report; the system once controlled $86 billion or so in resources, and I was startled at its depreciation. It is now $59 billion or so.
When I raised some modest points for reform, I was surprised at how defensive those responsible for investing or interpreting the investment strategies became. No one wanted to deal with the issue of gross underfunding. The administration has argued that all pension systems are down, some more than New Jersey’s, and that under Corzine, the state has contributed more money, $3.4 billion, to the pension system than previous administrations did in the previous 15 years.
Corzine saluted himself for beginning repayments, and I agreed that he deserved credit. Unlike his predecessors, he did not say at first that tough times or the need to balance the budget prevented him from meeting his obligations. But as the economy tumbled, Corzine decided to follow the old wisdom: For this coming fiscal year he proposed decreasing the state’s contribution by $895 million from the previous year’s $1.1 billion contribution.
If all of Governor Corzine’s pension deferral plans are put into effect this year, the governor will have underfunded pensions by an incredible $7.5 billion during his less than four years in office, [Republican Senate Whip Kevin] O’Toole noted.
Passage of S-2955 will ensure that the official $30 billion deficit between what the state has in its pension funds and the estimated pension payouts in the future will continue to grow, O’Toole said.”It defies logic to further increase the size of a multi-billion dollar deficit in the middle of the worst economic downturn since the Great Depression,” Senator O’Toole said. “This governor is pushing the pension funds closer to insolvency.”
The pension fund for New Jersey teachers fell $2.6 billion more into the red last fiscal year, prompting the professionals who monitor the system to warn for the first time that the state is teetering near a point where it may not be able to pay educators their promised benefits.
Along with the shortfall, calculated as of June 30, 2008, actuaries said recent events not factored into their report will only make the picture darker. Those include a 25 percent loss in the state’s investments and a new budget plan that calls for giving the fund just 6 percent of what is owed next fiscal year, short-changing the teachers pension system alone by $1.4 billion.
“That really gives us some concern for the fund’s long-term ability to meet its obligations,” said Scott Porter, an actuary with Milliman Inc.
Like many governors before him, Mr. Corzine first turned to the pension fund for a lifeline. But it is a frayed line.
The fund started in 2008 with $81.3 billion in assets, but that was still only 79 percent of the amount actuaries calculated it should hold to cover the benefits retirees have already earned.
Investment losses would ordinarily prompt steep increases in state and local taxpayer contributions, to keep the pension funds flush. But Mr. Corzine and local leaders face a host of competing demands for the diminished tax returns they control, and the long-term demands of the retirement account have become a tempting source of short-term savings needed to prop up current government spending.
Mr. Corzine said on Wednesday that state officials had recently reviewed an audit that found the fund had a deficit of about $25 billion. But some experts have estimated that the shortfall is much larger than that.
Whatever the figure is, the governor said, the shortfall must be closed.
“The fact is we have a huge hole,” said Mr. Corzine, who has warned of problems with the pension system since taking office 15 months ago. “It has been created by a failure to deal with the issue, frankly, for the better part of a decade, and I consider it one of our greatest challenges.”
Let’s get this straight, once and for all: everyone knew the NJ pension system was a mess in October of 2009. The recession began well before Barack Obama was elected to the presidency; we were right in the throws of it during the 2009 NJ gubernatorial election. The market had already tanked earlier that year; everyone knew the fund’s investments wouldn’t be putting up large returns for years, if ever again.
Given all this, there are really only two possible explanations for Christie’s claim that he didn’t know the pensions were in serious trouble:
1) He was ignorant of the issues facing New Jersey at a level that would have made George W. Bush blush.
2) He knew he couldn’t deliver on a promise of keeping pension benefits the same and slashing taxes for the wealthy and corporations – but he made the promise anyway. Again, like George W. Bush’s clearly impossible fiscal promises in the 2000 campaign.
So, is Christie a liar or a fool? I could never decide about Bush, and I can’t decide about Chris Christie. Is it possible they are both?
I feel sorry for Tia McLaughlin. I feel sorry for all the teachers who supported this clown of a man – and all the cops, and firefighters, and state workers, and county & municipal employees. I only have one question for all of them:
Will you let yourself be fooled again?