Fix it or forget it - the NJ pension issues

I'm not a fan of the Trentonian newspaper.  I think its better served as a blotter at the bottom of my bird cage than anything else.  Except for an occasional page 6 girl, there's not much worth reading in what many have called the "Trashtonian".  There are two columnists that are regular's for the Trentonian, L.A. Parker and Jeff Edelstein.  I've read their columns in the past, and I'm not really fans of either one of them.

Sometimes they spice things up and make things interesting.  On June 11, 2014, they did just that, but in an unusual way.  They each published opposing thoughts on the New Jersey pension problems on the same page.  The headline read "Split Decision: Should New Jersey's pension program be blown up?" Parker was in favor of keeping it, blaming the problems on the government, while Edelstein didn't blame anyone but whined about why we should scrap it and start from scratch, calling it "unsustainable".

Parker and Edelstein traded spars, but in my opinion, the winner by a knockout was L.A. Parker.  Please don't take this as a show of support for him; I've read lots of garbage in his columns in the past.  Today he shined just a little.  Case in point: Parker points out that Edelstein is a staunch Christie supporter.  I agree. Read his columns and you will too.  Parker also adds the fact that the most recent problems are the result of the Governor "miscalculated or misrepresented" revenue projections.  I again agree.  Christie tried blaming Dr. Rosen, the Chief Budget Officer for the states office of legislative service for the miscalculation.  What many don't know is that this same Dr. Rosen warned Governor Christie about this impending crisis, but the Governor brushed him off.  Later, when Governor Christie was called out on this miscalculation, he said Dr. Rosen "just got it wrong".  Actually Governor, he was right, and you ignored him.  Had you listened to the man who had a reputation for being right, you may not be in this predicament right now.

Governor Christie blamed the pension problems on past Governors, ignoring the fact that he participated in the same activities as his predecessors.  He reached deep down into the pension cookie jar, removed several large handfuls, handed them out to his friends at the playground, and didn't put the cookies back as promised.  To help "fix" the problem he help create, Christie raised the retirement age to 65, burdened public workers with higher costs and payments, and eliminated the cost of living increases.  L.A. Parker points out that "our leaders need to put all potential problem solving issues on the table including hiring practices, payments made for years of unused vacation and sick time, and practices that allow a double-dipping of pensions."  Again, I agree.  Multiple fixes should be on the table for this one, not just one.

Edelstein, on the other hand, gave little in the way of facts. In fact, he even got some things wrong.  For example, he states "None of this getting the average of your three highest salaries for life.  What a crock!  Really.  Get a 401(k) like the rest of us."  Lets talk facts here.  Nobody in in the Police & Fire pension, or the teachers pensions gets the average of your three highest years averaged out for the rest of their lives.  The reality is that it is a percentage of that number based upon the number of years in the pension system.  Spend 25 years in the Police & Fire pension system and you are eligible for 65% of that, not 100% as he makes it seem.  Spend 20 years in Police & Fire, and you get 50%.  Edelstein also remarks about how unsustainable the pension is now based upon the average life expectancy compared to when it was first put into place in the 50's.  What he completely failed to mention is the reason it it is "unsustainable" is because of the BILLIONS of dollars removed by the Governors, as well as the BILLIONS in missed payments due to "payment holidays" the municipalities were given by the Governor.  Yes, the pension is funded at about 65% (or less), but fifteen years ago it was over 100% funded!  This decrease was not due to payments to retirees or from current workers not making their bi-weekly pension payments.  This decrease is because of both Republican and Democratic Governors grabbing money from the public pension trough, using it for their own pet projects, and never repaying it.   PERIOD!  Jeff, you missed this.

L.A.Parker - 1   Jeff Edelstein - 0

P.S.  I wrote this blog very slow, so just in case you are reading it Governor Christie, you'll be able to keep up.

Our pension is in the hands of Judge Mary Jacobson - Oh no!

Fourteen unions are suing Governor Christie over the pension scandal.  The unions think the laws support a successful lawsuit, and the billions that were slated to be diverted will be put back in its rightful place.  I really do wish this were the case. This case is being heard by Mercer County Superior Court Judge Mary Jacobson, so don't hold your breath.  I really hope I'm wrong, but lets be real. This is politics at its core.

This is the very same judge that supported Governor Christie as recently as April 9th, 2014 by ruling that Bridget Kelly, his former Deputy Chief of Staff, and Bill Stepien, his former campaign manager, didn't have to turn over documents that were subpoenaed by the New Jersey Legislature.  Why?  One reason is that she felt the committee itself had the authority to enforce its subpoenas.  In essence, she distanced herself from enforcing subpoenas that could potentially negatively affect the Governor.  She decided not to make a decision.  She clearly knows who butters her bread, and didn't want to bite the hand that feeds her.
http://www.judiciary.state.nj.us/gwblaneclosure/Stepien+Kelly%20Opinion.pdf.  

Judge Jacobson is listed in "RobeProbe", a website that rates judges based upon notable decisions, published opinions, knowledge of law, control, work ethic, and absence of racial bias.  While this blog you are reading now has nothing to do with that website (robeprobe.com), it is worth noting that her overall rating on that site is listed as "very bad".  http://www.robeprobe.com/find_judges_result2.php?judge_id=1091.

June 25th will be the true test of Judge Jacobson's opinion, knowledge of law, ethics, and bias.  Lets hope she doesn't play politics.

Pension cuts head to court

On June 25th, oral arguments will be heard by Mercer County Superior Court Judge Mary Jacobson for a lawsuit brought by the NJSP union.  Judge Jacobson said she would decide whether Christie's plan violates the 2010 pension law that Governor Christie himself passed.  This will be a major challenge to Governor Christies plan to skip a huge pension payment for both this and next fiscal years.  Governor Christie said he needs to use the money to solve a budget crisis.

The Governor is planning on taking $900 million through an executive order he signed last month, and an additional $1.5 billion for the next financial year (which begins in 3 weeks).  Christie said the state constitution requires a balanced budget every year, and this money is needed to prevent huge cuts to hospitals or schools, or major tax hikes.  However, his failure to make the pension payments violates a law he created during his first term.  It also violates a section of the NJ state constitution that states, in part, "the Legislature shall not pass any bill...impairing the obligations of contracts".

The Governor has stated that failure to make these payments is fiscally irresponsible and taking the pension money was a "regrettable move", but the state can't afford to keep paying public workers the benefits they currently get. Lets not forget that this is the same Governor that just gave many of his own staff raises as high at 23%, while at the same time he requires others to stay under the 2% cap.  How can he call one thing fiscally irresponsible, but give huge raises at the same time? 

New Jerseys Moody's credit rating has been downgraded several times since Christie has been in office.  Fee's in New Jersey have skyrocketed.  The cost to register as a corporation fifteen years ago was $50 per year.  Today it is $500 per year; a 10-fold increase.  Motor vehicle fees have quadrupled in the past fifteen years.  These are not considered "taxes", so there is not much in the way of public outcry.  Is there really a difference between a state fee and a tax?  No.  When there is a shortage of money, you would think the Governor would created a solid tax base from businesses that are seeking to come to New Jersey, but he does the exact opposite.  Since 2010, the state has doled out over 2 billion dollars in incentives to corporations and developers.  Compare that number with the $1.5 billion given out in incentives during the prior 10 years. That money could have been used to our benefit, not to the benefit of corporations and developers.

Never in the history of our state has our leadership been so poor.  Lies, deceptions, double-speak, willfully not following the law, and so on and so on...

Judge Mary Jacobson, please make the right decision, and put our pension fund money where it was meant to be.







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Pension-Gate: The lies behind Governor Christie

The New Jersey Police & Fire pension problems are making the headlines again, this time with Governor Christie using the pension fund payment he promised to make being used instead to cover an $807 million state budget shortfall.  Of course this is nothing new to current and retired members in the Police & Fire pension system.  This is just one more time that the Governor has made these members seem like the reason the state is in such a financial mess.   Once again, Governor Christie has deflected blame from the real reason for the pension mess. 

For the non-government workers reading this, imaging if you would that you had a 401k program where you worked.  You made payments into this retirement fund, and your employer made matching payments.  This money is for your retirement, and you spent your career relying on it to support yourself and family once you retire.  Years go by, and your 401k plan is looking good; really good.  Now imagine if you would that your employer decided that they wanted to pay for a totally unrelated program or project, and decided, without telling you, that they used your 401k to pay for it.  When you do take note of the “withdrawal”, you are told “don’t worry, we will put it back”, but they never do.  In fact, not only to they not put it back, but they stop making the matching payments.  And to top it off, they blame YOU, and tell you that you need to put in more money.  Sounds idiotic, doesn’t it?  This is what your government has been doing for years. 

Remember the Enron scandal?  When discrepancies were first discovered, the CEO Jeffrey Skilling verbally attacked the Wall Street analyst who questioned “unusual accounting practices” in an attempt to distract from the fact that Skilling knew exactly what was going on.  Governor Christie, our CEO, is verbally attacking the Police & Fire pension union and members in an attempt to distract the public from the fact that he and his predecessors are to blame.  This should be called “Pension-gate” to go along with bridge-gate.

I was a police officer for 25 years, and always made my pension payments; first paying 8.5% of my yearly salary into the pension system, and then later, when the governor changed the amount, I paid 10% into the pension system.  All the while, the state and municipalities were supposed to be making the same payments.  We all know these matching payments were not paid as required by law.

To see where this pension fund disaster began, we need a short history lesson.  Governor Christie did not start this mess, but he continues to perpetuate the revolving door of politicians who systematiclally raid our pension fund to pay for other shortfalls.  I place the blame squarely on the shoulders of Governor Whitman for starting this fiasco.  When she was elected to lead our state, the pension fund was well funded with over 100 billion dollars.  Yes, billion; with a B.  This was our money, and not funds allocated for any other resource.  Governor Whitman began taking money from this pension fund without so much as asking.  She simply took it to pay for various items, including balancing the state budget.  The pension fund was so well funded that she permitted the state and municipalities to stop making their required matching pension payments, but she did not permit the members; the men and women it was meant to help, to stop making their payments.  Billions of dollars were not paid into the pension system by the governments, but like good little soldiers, we kept making our 8.5% payments without missing a beat.  The government payments which were “deferred” were supposed to be made up later.  Smart towns realized this and put money away in something like an escrow account, to be used to make the payments later.  Most towns did nothing except to use that money for other purposes, leaving themselves open for future problems when they had to repay the money.  Who do you think the government blamed when they were eventually told to make their payments?  They blamed the pension fund and the members of the unions of course.

Governor Whitman was not the only one to raid the pension fund.  Each and every Governor has followed suit, including Governor Christie.  The pension raids were done routinely, causing the fund to dwindle.  Governor Corzine was the one who told the towns it was time to put back the deferred payments.  The towns that did not prepare for this day were in for sticker shock.  They now had to make up the missed payments to the tune of billions of dollars collectively.  Towns couldn’t afford to make the payments if they failed to sock the money away, so the only way to raise the money was to raise taxes. Who did they blame for this?  They blamed the pension system; the evil and despicable police and fire union members who diligently made their payments while the municipalities were given a temporary reprieve.

Governor Christie, you are a bold faced liar.  When you first ran for office, you made a promise to the Police & Fire union IN WRITING because you wanted our vote. The unions backed you after you published this letter:

 click to enlarge

 

Let me quote Governor Christie.  “It is a sacred trust.  Nothing will change for the pension of current officers, future officers or retirees in a Christine Administration”.  Governor Christie put this in writing and published it for the world to see.  He did this to gain the support of a block of voters, and it worked.  We believed in him and supported him based upon a lie. He lied to us then and he is lying to you now.