This week’s missive from the D.O.E. telling school districts that they could skip their payments to the Teachers Pension Fund (see here) is almost moot. Sure, it’ll increase the shortfall – already $14.1 billion – but in the context of overall mismanagement it's just a drop in the bucket.
Two years ago, the New York Times ran an expose on the Fund, the ninth largest pension fund in America. According to the Times,
The state has long acknowledged that it has been putting less money into the pension fund than it should. But an analysis of its records by The New York Times shows that in many cases, New Jersey has overstated even what it has claimed to be contributing, sometimes by hundreds of millions of dollars.
Monkeyshines include funding a 9% pension increase for all teachers in 2001 by using a bookkeeping fluctuation, recording increases when the markets were up while failing to report decreases when the markets were down, and reporting health care costs as contributions when, in fact, they are not.
It’s not Corzine’s fault. He’s merely one in a line of governors who have played the same game of shifting money around to accommodate debt elsewhere. According to Keith Brainard, Research Director of the National Association of Budget Officers, as reported in the Philadelphia Inquirer,
New Jersey has a long history of failing to make required contributions and that has played an important role in the plan's poor funding condition.
Allowing local districts to delay scheduled payments til 2012 to compensate for the D.O.E.’s failure to make good on aid is just more of the same.