Pension Update from State PBA President Colligan

Just passing on info posted by Colligan....

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Pension Update from State President Colligan

I wanted share some good news about our pensions. The State Investment Council met this week and disclosed that our pension investments are earning double what managers expected. Four years ago the pension fund balance was $66 billion. In the last four years it has grown by $35 billion despite the State failing to pay its obligation. This increase took place while a record numbers of officers retired. Experts told the investment council that if the current rate of return on investments continued, we would have no pension debt at all.

While the Investment Council’s report is good news it just highlights our arguments about the current political debate about pensions. The Governor missed a golden opportunity to strengthen our pension even further by simply paying the State’s obligation. The pension problem exists because politicians have repeatedly failed to pay into the pensions. The Governor can spin all he wants but this report highlights his failures.

The report should reassure our members that our pensions are generating a good return. Our pensions are on solid ground. This report will not make the Governor restore COLA or stop his latest campaign against law enforcement officers. It will make people take note that employee contributions have kept the system afloat even when the State failed to meet its obligations. 

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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