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NEW JERSEY COPS ■ MARCH 2014
Government Affairs
Budget speech tells the same old story
In an era in history that
is dominated by the power
of technology to pass
information amongst people, it is often easy to overlook the impact that a single speech can have
on influencing behavior and kicking up dust.
Rob Nixon That concept was proven decisively when Gov.
Christie gave his annual NJ State Budget Message to the State Legislature at the end of February. With one speech, and with just a few lines in that one
speech, the governor has again ignited a debate over the
future of the state pension system.
State House
Report
The speech certainly did a lot to put pension issues back on
the front pages of the newspapers and it lobbed the volatile
discussion back into the laps of the Legislature (and those of
the employees covered by the funds). But think about something: What was actually proposed in the speech? What new
policy initiative was requested to be passed? None at all. In
fact, go and read the speech itself. It is essentially a restatement of fact. Pension obligations will cost the State of New Jersey more than $2 billion in the budget next year. It is the
highest amount ever paid into the system. As a result of bad
decisions by past governors and Legislatures, it eats up a higher percentage of dollars to spend than anyone would like.
The speech didn’t break any new ground; however, it was
a discussion that within the confines of the revenue at hand is
what it is. PBA members don’t need to be reminded that the
situation exists solely because government, from the state
level to the smallest town, broke its moral and financial obligation to make actuarially-required payments into the pension system for a decade. Rather than take responsibility,
Chapter 78 was passed to pass the hat to employees in the
form of increased employee contributions, COLA eliminations and reduced benefits for new employees.
And then, as if ignoring the errors of history, towns were
told by the state that they could reduce their pension payments by more than $360 million since 2012 because of the
“savings” generated by the very same employee-increased
costs and cut COLAs. Rather than be fiscally prudent and
use that more than $360 million to directly reduce the system’s unfunded liabilities, these “savings” were used in the
same manner as excess pension funds were used in the late
1990’s and early 2000’s that caused this whole mess in the
first place.
S TAT E B U D G E T
A N A LY S I S
In the days following the speech, Democratic leaders publicly (and many Republicans privately) announced that they
would not revisit pension reform issues and that the deals
made with the governor - and celebrated - in 2011 needed time
to do what they intended. The governor then declared that he
would be forced to take “extreme” actions using his “Execu ]