Matt Arco in his “dumb it down” and “keep it simple” Star-Ledger article today writes about 5 things Chris Christie’s pension commission wants New Jersey residents to know. The commission report issued yesterday had nothing new to tell us: “The unfunded pension and health liability is massive, blame can be spread across the board, the 2011 reforms weren’t enough, and failure to fix the problem will cost millions more.” So what was left unsaid?
Here is another “dumb it down” and “keep it simple,” summary of What the commission does Not want us to know:
1. The solution – It probably is still in the discussion stage, is politically difficult, will necessitate buy-in from the legislature and its leaders, and is awaiting the propitious moment for a “Grand Announcement.”
2. The NJ court will have a say in the matter – It will likely rule soon that the 2011 union contract is valid and that the State has to continue contributing its share to the pension fund. It has already ruled that retired public workers have a contract right to cost-of-living adjustments.
3. The unions will suffer – In spite of court rulings there will likely be a revised, less costly plan to the state for newly hired government employees.
4. A tax increase at some point will be necessary – Credit rating agencies will only be satisfied when NJ raises its revenue sufficiently to meet its obligations and presents a more structurally balanced budget. To comply with future pension payments a tax increase will be necessary.
5. A bitter pill – The plan will help but will be hard to swallow.