Christie Balances Budget By Not Making $900M Pension Payments

[Lucille]

Big government is expensive, but our Public Masters are worth it. I wonder if they realize how the Fed is destroying what they were promised?

CHRISTIE BALANCES BUDGET BY NOT MAKING $900 MILLION PENSION PAYMENTS
http://www.theburningplatform.com/20...sion-payments/

Chris Christie is displaying true leadership qualities by balancing his budget on the backs of future generations of NJ taxpayers. Governor Jellyroll has big plans for 2016. He doesn’t give two $#@!s about a government pension crisis that will blow up after he leaves office. That will be the next sucker’s problem. He is a bully with no balls. He is just like every other captured politician with no courage to confront reality or deal with tough issues head on. He might lose those moderate voters. NJ, California, Illinois, PA and dozens of other states are on a rendezvous with disaster, as their promises cannot mathematically be fulfilled. Another feather in the cap of doughnut boy.

Jersey pension system beyond saving at any reasonable cost
Steve Malanga May 21, 2014 Accounting, Pensions

For three years now PSI has been warning (see here and here ) that New Jersey had neglected its government employee pension system for so long that the state’s 2010 and 2011 reforms were inadequate to save the system. At some point we said (numerous times) the state would have to admit it could not possibly keep to the refunding schedule it had set for itself.

Yesterday Gov. Christie declared as much when he announced he would help erase the state’s current budget deficit by paring back its pension contributions. But even the payments that Christie announced he couldn’t afford to make amount to about half of what it would cost the state every year to adequately fund its pension system. The numbers, quite frankly, are staggering.

Christie said he would make a nearly $700 million pension payment this year, instead of the $1.6 billion the state originally committed to, and he’s planning to cut next year’s payment to $681 million, from a projected $2.25 billion. The lower figures are what the state estimates it costs to pay for pension benefits that state workers are earning this year; the additional costs are to pay back what Christie describes as the sins of past neglect.

But those higher costs are still just partial payments that understate the real price of fixing the system. In 2010, when the state committed to a new funding schedule for pensions, it gave itself seven years to gradually ramp up payments. We’re only in year four of that schedule. The true cost next year for funding the state’s pension system adequately isn’t even $2.25 billion, it’s about $4.5 billion. By 2018 it will be more than $5 billion.

The problem is that Jersey only collects about $32 billion in taxes and other revenues. States have never historically devoted 14 percent of their revenues to pensions. The norm has been about 3 percent to 4 percent. There is no plan under which a state pays its other bills, accounts for increases in costs, and spends 14 percent of its taxes–or even 10 percent of its taxes, frankly–on pensions...

[FSP-Rebel]

See, he is a fiscal conservative after all.

[juleswin]

See, he is a fiscal conservative after all.

In a way yes, but it would have been better if he had spread the pain around. Maybe end some useless state programs like the war on drugs or just cut the police budget. I would guess that he probably used some of the savings from the pension cut to raise police budget. Make it look like you are doing a thorough assessment by making cuts from as many program as possible. But yea, devoting 14% of state tax revenue to pension is kinda high, but I have to wonder how he can get away with cutting state pension, I would think its something the state legislature would have to enact.

[libertyjam]

Well if it means some of those multi-hundred thousand dollar a year cop thug pensions aren't paid, good! Hell, every tax tick in the entire US that is retired should be cut off tomorrow.