Should public workers’ benefits be cut?
Governor Christie has made it pretty clear that the current pension system is in need of a complete overhaul.
The problem is where to start and just who will be affected.
When the last budget year ended, the amount that the Governor promised to put back into the pension fund was dramatically cut – due mainly to a decrease in revenue coming into the state’s coffers.
You had to know that when the Governor made his State of the State Address promising to contribute what amounted to something like 2 billion dollars into the fund, something, somewhere was going to have to be cut.
Turns out revenue projections were overly aggressive forcing the Governor to renege on his promised contribution – a decision that was upheld by a Superior Court judge.
However, he will not have the same latitude with the newer budget.
The question still remains if pension reform is needed, who makes the sacrifice, if indeed one is to be made.
Well, the Governor is now making a tour of the state, touting his new slogan, “No Pain – No Gain.”
Nifty slogan – and nifty video to go along with it.
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“The root of all these problems comes down to some very simple things,” Christie said. “Government has made promises to people across this state that they had no idea how they were going to pay for.”
Now the bill has come due and no one in state government has any idea how to pay for these promises of the past.
The governor said 60 cents of every dollar in new spending in recent years goes to state and federal entitlement programs — pensions, public sector health benefits and debt service — and that fact combined with a sluggish economy has become an unsustainable reality.
Moreover, the burden of funding these programs has impacted the state’s ability to spend money on badly needed infrastructure projects to improve roads and bridges, and to invest in public education and healthcare.
The state’s 2011 benefits and pension reforms, which raised the retirement age and increased the contribution amounts made by individual employees to fund their health benefits, have helped stem the tide. But New Jersey continues to be saddled with 20 years of governors’ signing budgets in which little or no contributions were made to the system — creating a structural deficit.
“It’s paying off the stuff we ignored all those years, when we wouldn’t put in any money at all,” Christie said. “So it’s me paying for the sins of my predecessors.”
So in the words of the famed disco-group, the Trammps, “Where Do We Go from Here?”
Here’s the problem. Just like anyone else, if you promise you’ll make a payment of such and such dollars, and at the end of the day find out you’ve overestimated how much you can pay – what do you do?
Borrow from Peter to pay Paul? Take another mortgage out on the house? Basically kick the can down the road.
Isn’t that what we’ve been doing for years? (Short answer: yes!)
Those we’ve borrowed from want their money just as much as public workers do. Were we to go to shylocks, somebody’s knuckles would get broken – or worse!
But given the mood of anyone in the state’s pension system – maybe that’s not out of the question.