For the past two days I have listened as El Rushbo, Rush Limbaugh, referred to state workers in New Jersey who could retire at age 49 and be entitled to a $3.3 million pension along with $500,000 of health care based simply on contributing $124,000 during their employment years. Not a bad ROI regardless if your contributions ramp up for 20 to 30 years.
Note: Employment years was not defined by Rush nor found in the news articles.
Now that I have a partial confirmation from today’s Newark Star Ledger I thought it appropriate to share my birth state’s financial burden with those of us living in California as we share many of the same challenges found in other states.
From last week’s Star Ledger they reported:”The state pension system, which covers more than 700,000 working and retired state, county and municipal employees and teachers, was underfunded by about $34 billion as of the last official count in 2008
On a local assessment, the unfunded liability and resulting pension shortfall in CA are not considered debt yet we still have the obligation. If this met the traditional requirements of a debt issuance we would enjoy Constitutional protection requiring a vote of the citizenry. Technically, being generous with pension payouts is a form of spending and the only protection for taxpayers is the Constitutional requirement that the budget be balanced.
New Jersey’s proposals would require workers and retirees at all levels of government and local school districts to contribute to their own health care costs, ban part-time workers at the state and local levels from participating in the underfunded state pension system, cap sick leave payouts for all public employees and constitutionally require the state to fully fund its pension obligations each year. They would also eliminate multiple pensions and change how pensions are calculated, including for police and fire personnel.”
Today’s Ledger asks:
“Why doesn’t N.J. hold a referendum on soaring pension debt?
By Paul Mulshine/The Star Ledger February 16, 2010, 6:03AMThe Star-Ledger Gov. Chris Christie. In his speech last week, Gov. Chris Christie gave a couple of examples of why the state pension funds are going broke. One was that of a public employee who paid in a mere $124,000 during his career, but is projected to receive more than $3.3 million in pension payments.
Hold on, you may have thought. I can’t even afford to retire at 65. Yet I’m supposed to pay taxes to fund a lottery-sized payoff to send checks to some guy who moved to Florida at 55? When did I ever agree to that?
You didn’t. But you should have had the chance.
The framers of our 1947 state constitution were wise men who realized that politicians love to give things away in the present and let someone else pay for them in the future. To that end, the framers created the “debt-limitation clause.” That clause requires a referendum before the state can incur “a debt or debts, liability or liabilities of the state” that exceeds 1 percent of the budget for the year in question.
As the governor noted last week, we’re running up debt at a rate that would require putting aside about $7 billion in next year’s budget. That’s about 25 percent of expected revenues. So why no referendum?
As with virtually every other crisis that has made this state ungovernable, the fault lies with the state Supreme Court. That question should have arisen back in 1997 when then-Gov. Christie Whitman decided to borrow $2.7 billion to put into the pension funds. The court could have strictly enforced the debt-limitation clause. The subsequent referendum almost certainly would have been voted down.
Instead the court gutted the clause. That set off both a big borrowing binge and a big giveaway to the unions in the form of higher pensions and lower retirement ages. And now the state is stuck with all that debt.
Story links:
http://blog.nj.com/njv_paul_mulshine/2010/02/why_nj_doesnt_hold_referendum.html
http://www.nj.com/news/index.ssf/2010/02/nj_public_worker_benefits_pens.html
A majority of the cuts made to programs and the majority of the borrowing is all in violation of the constitution, propositions passed by voters or federal mandates.
There is no way to balance the budget without violating these items, without massive tax increases, which are not acceptable either.
Jim. Quick question.
Do you live within your means?
My sense is that you don’t break your kids piggy bank nor max out your credit cards for some future generation to pay off.
Isn’t the root of the problem a failure of our electeds to adequately plan to fund the benefits they have agreed to in negotiations? Financing these things with an annuity or annuitized approach should be part of the strategy when agreeing to these benefits. How about an Initiative that simply requires that any public sector retirement plan must have an annuitized financing element when approved, and that financing element shall be updated every 2 years? Something that requires the electeds to address the solvency of their labor agreements in a on-going manner and to assure such commitments remain solvent. Maybe a feature that would assure electeds do not benefit from negotiated retirement plans, and makes them personally liable for failure to finance what they agree to. The chill in the air these requiements would produce would lead to more logical outcomes of labor negotiations going forward.
Talk about self inflicted wounds? Should the rigid immigration laws pass in the state of Arizona? Look out California–THE SANCTUARY STATE.Currently so many other states are teetering on the edge of bankruptcy, because of the illegal alien invasion. Millions upon millions of more decrepit, desperate illegal immigrant families will be heading your way? Think of it! Your utra-Liberal assembly ruling the roost in Sacramento, will have to borrow even more money from Communist China, just as our derelict political old mens club in Washington have done Your need to loan that extra cash, with astronomical interest to pay for even more “Anchor Babies” welfare. Be assured Illegal aliens know all the loop holes, to get at all that public welfare cash. and government entitlements. Arizona said enough is enough and while their own congregations of poverty stricken population, have have been cut back (just as California) on welfare subsidies to share with illegal immigrant families. The people of Arizona frustrated with the lying garbage from Washington, have taken their immigration laws into their own hands at last, while California still dishes out billions of dollars a year. We are told illegal aliens don’t get food stamps, low Income housing or many other government entitlements. Why do you think Pregnant women sneak across the border, to siphon off taxpayers dollars.
* The Urban Institute estimates that the cost of educating an estimated 800,000 illegal alien school children in the nation’s seven states with the highest concentration of illegals was $3.1 billion in 1993 (extrapolated to $4.6 billion in 1996 by FAIR), but this estimate does not at all take into account the additional costs of bilingual education or other special educational needs.
* It is estimated that the number of children born to illegal aliens each year is 165,000. This figure is based on the crude birth rate of the total foreign-born population (33 birth per 1000) and the size of the illegal alien population (five million).
* In 1994, California paid for 74,987 deliveries to illegal alien mothers, at a total cost of $215.2 million (an average of $2,842 per delivery). Illegal alien mothers accounted for 36 percent of all Medi-Cal funded births in California that year.
* TAKE INTO ACCOUNT THIS WAS 1994-1996. CAN ANYBODY EVEN MAKE A CONSERVATIVE GUESS OF WHAT CALIFORNIA IS DISHING OUT? DON’T EVEN THINK FOR THE ACCOUNTING OF EVERY OTHER STATE? CALIFORNIA IS BROKE.
The joke is going to be on California when countless numbers in Arizona, pack up their possession and head for the neighboring state. Perhaps Governor Richardson will welcome these lawbreakers with open arms, as we already know he issues drivers licenses to them. Of course Utah and the great state of Texas may receive additional occupancy as well, who will expediently offer them welfare like the once Golden State. It’s a crying shame that foreign nation get preference over our own pregnant mothers our sick and infirm. What excuse do politicians have to sell American jobs overseas, while importing discount labor. Enact amendment to the 1986 Simpson-Mazzoli bill, don’t use propaganda to say the laws were broken–when never enforced. Tell your Washington and state Senators and Representatives what–YOU–want, and not–CONSPIRE–with the special interest lobbyists? Here’s the Capitol Switchboard number 202-224-3121 ONE LANGUAGE, ONE FLAG AND DEPORT–ALL–ILLEGAL IMMIGRANTS. IT CAN BE DONE WITH THE NEW GENERATION OF E-VERIFY.