NJEA's Math Problem: New Jersey Will Never Be Able to Fully Fund Pensions Without Concessions

It’s just so Jersey. Senate President Steve Sweeney, gubernatorial-hopeful, makes the fiscally responsible decision to delay a Senate vote on a constitutional amendment that  would require the state to fully fund teacher pensions. Irate NJEA leaders, still clutching a grudge over Sweeney’s involvement in the state’s 2011 pension/health benefits reform law, hang the eminent legislator out to dry and make an early endorsement of Phil Murphy, a Goldman Sachs multimillionaire who makes fantastical promises about fully funding pensions yet surely knows better..

Hence, New Jersey continues its long history of making promises to retired teachers that it will never keep.

For some insight into the history of N.J.'s pension miasma, read the new report by Mike Lilley called “Pensions, Politics, and the New Jersey Education Association."

For context, N.J.'s current unfunded pension liability comes to $95 billion. If you add in health benefits, our unfunded liability is $160 billion. The entire annual state budget is about $35 billion. And all the hoopla about a "millionaire's tax"? Jeff Bennett points out that enacting this tax would bring in a whopping $565 million per year.

The math is impossible.

Lilley explains that this fiscal disaster is why "the Mercatus Center ranks New Jersey dead last among states in long-term fiscal solvency and why New Jersey has the second-lowest bond rating of any state (above only Illinois). Passing the amendment without any reform would condemn the state and its citizens to a bleak future.

Read the whole thing, but here’s a few highlights:
John Bury, a pensions expert, notes that “the NJEA might be able to pick its puppets but until they locate one who can make money magically appear those pensions they thought they bought will disappear.”

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