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Monday, April 27, 2015

N.J. Legislature will fully fund pension in 2016, senate president vows

By Samantha Marcus | NJ Advance Media for NJ.com
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on April 26, 2015 at 8:00 AM, updated April 26, 2015 at 11:26 AM
TRENTON — State Senate President Stephen Sweeney does not leave room for doubt when he says the Democratic-led state Legislature will fully fund New Jersey's public worker pension system next year.

"We're going to fund it," he said.

Democratic leaders say they're forging ahead with plans to make a $3.1 billion contribution into a pension system bedeviled by nearly two decades of underfunding.

Sweeney (D-Gloucester) said lawmakers are devising strategies to boost the funding level in Gov. Chris Christie's proposed budget for the 2016 fiscal year beginning in July by about $1.8 billion.

Christie's budget includes a $1.3 billion payment he hailed as the largest in state history but is less than half of what is required by law and even less still than the amount recommended by actuaries to keep the fund from going broke.

Actuary reports released earlier this year show the state's unfunded liability grew by about $4.5 billion to $40 billion in 2014, blaming some of the new debt on the failure to live up to a 2011 law committing the state to increasing funding levels.

While Christie met the ramp-up schedule for two years, he cut payments in 2014 and 2015 and proposes to do so a third time in 2016 to balance the budget.

Labor leaders have said they won't settle for less than what's owed under that embattled law, and in February won a trial court fight to force Christie to satisfy the 2011 agreement. Christie has appealed to the state Supreme Court, which will hear arguments next month.

Unions have also sued the governor over his plans to short next year's payment, though attorneys for Christie have argued the courts have no say in what he recommends.

Rhetoric heated up this week after Sweeney and Assembly Speaker Vincent Prieto (D-Hudson) joined labor unions in asking the Supreme Court to force Christie to make a larger payment.

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Senate President Steve Sweeney is shown in this January 2014 file photo.
Christie accused Democratic leaders of "suing themselves," while Assembly Minority Leader Jon Bramnick (R-Union) challenged Democrats to come up with the money and Assemblyman Declan O'Scanlon (R-Monmouth) tagged calls to fund the pension "pandering," warning that coming up with $1.57 billion with just two months left in the fiscal year would force mass layoffs of teachers.

"That's hysteria," Sweeney responded. "That's someone that doesn't have an answer for anything."

No matter the outcome of the pitched legal battle, Sweeney, who with Christie spearheaded the 2011 pension reform legislation, said he intends to make good in 2016.

"We can fund it, and we can fund it by doing some smart things in government," he said, describing a cryptic blend of new revenue and cuts.

"Some of it's savings through modernization and efficiencies. And they're real. They're real savings," he said. "We've identified several areas where we're not going to hurt anything but where we're able to save."

In an effort to restore the nearly $1.57 billion cut from pensions last spring, the Legislature passed a budget that raised income taxes on millionaires and corporation business taxes. It was met with an executive veto.

"If it's anything like last year, I'm sure it'll be relying on massive tax increases and accounting gimmicks," Christie spokesman Kevin Roberts said Friday.

Assembly Majority Leader Lou Greenwald (D-Camden) said it's too soon to know what the funding mix will look like, noting that the Legislature is still waiting on final revenue figures that could make their job easier or much harder.

Greenwald told a conference of labor leaders last week that the Legislature is working to meet its obligation, but he acknowledged the difficulties.

"I would by lying to you if I did not tell you as I stood here I do not hold out hope that we can be successful," he said.

The Legislature was able to cobble together funding for 2015, and it will try to do that again in 2016, but Greenwald said funding pensions can't continue to as a year-to-year proposition.

"I'm thinking about it far more than what is our plan for 2016," he told NJ Advance Media. "This is what has gotten us into trouble, looking at it from this year-to-year methodology.

Any plan that hikes income taxes on millionaires, though, could be expected to draw strong objection from Christie, who has warned the added burden will run them out of New Jersey.

"Be careful," he told a town hall crowd in Cedar Grove on Thursday. "You know what happened last year? 10,000 millionaires left New Jersey. People of wealth can move, and they can move easily."

Christie pension fix not a new idea, but ups ante

TRENTON — When Gov. Chris Christie's pension commission issued a highly anticipated report last month, it made one thing clear: No simple tweaking or flitting around the edges will do to fix New Jersey's vastly underfunded public employee retirement system.

To get the kind of payoff New Jersey needs, the panel proposed to reinvent pension and health benefits for hundreds of thousands of active and retired state and local workers.

The plan — which Christie has pitched in his town hall tour and some unions immediately dismissed — would move workers onto less costly health care plans, freeze the current public worker pension system and create a new hybrid of a traditional pension plan and one that resembles a 401(k).

Such big changes have already been enacted in other states with huge pension woes — such as Kentucky, which two years ago created a less generous "cash balance" plan like what's proposed in New Jersey.

But leaders in Kentucky say it wasn't easy — and that Christie is in for an even tougher fight if he wants to enact every big element of his pension commission's plan.

"It was a battle," said state Senate Majority Floor Leader Damon Thayer, a Kentucky Republican.

Kentucky moved to a cash balance pension plan for some public workers in its own quest to rein in rising retirement costs.

The cash balance plan works like this: Like a defined-contribution, or 401(k), plan, an employee's benefits show up as a lump sum in a "hypothetical" personal account, which is funded by employer and employee contributions and investment returns. But unlike a 401(k), employees can receive their benefits in lifetime payments determined by their balance and other actuarial measurements.

RELATED: Christie pension commission recommends plan for huge savings, fewer benefits
Christie's pension panel recommended this sweeping change as a possible answer to a $37 billion unfunded pension liability — which balloons to $83 billion under new accounting rules.

Since releasing the plan in late February to coincide with his proposed state budget, the Republican governor has taken the proposal on the road, saying pension and health benefits are on the verge of "making it impossible for the state to do much else to invest in a better New Jersey."

Republicans in Kentucky made a similar case.

Without reform, the pension payment would consume payroll costs, Thayer said. In addition, the state and local pension contributions were set to more than double by 2020, according to a Pew Charitable Trusts report.

Kentucky's retirement system, like New Jersey's, consistently ranks among the most underfunded in the country. Past governors of both states made a habit of not making full pension payments.

To hear Thayer tell it, passing those reforms required considerable negotiations and cajoling among the Democratic governor, GOP-led Senate and Democratic-controlled House.

"The cash balance plan was a compromise here in Kentucky," Thayer said. "Republicans did not want to stay with the full defined-benefit system, and we knew the Democrats would never agree to going to a full defined-contribution system."

So in late March 2013, the Kentucky General Assembly passed a pension reform package that formed a cash balance pension plan, committed the state to fully funding its annual required contribution and came up with more than $100 million to pay for it.

But there was a big difference between what Kentucky did and what Christie's panel wants New Jersey to do.

Kentucky's new pension plan covers only employees hired after Jan. 1, 2014. Everyone else stays under the old plan. In New Jersey, Christie wants to also apply it to current workers and freeze their benefits under the current pension plan.

Building the plan around new workers alone "saves virtually nothing," said Tom Healey, a former Goldman Sachs executive who chairs Christie' pension commission.

"If you're a politician you can say 'we did something, we improved the pension plan going forward,' but you haven't saved any dollars," he said.

Attempts to do that in Kentucky would almost certainly have wound up in court, Thayer said.

"Yes we would like to move everybody into a new plan, but there just isn't the political will to litigate that right now," he said. "At some point the fiscal situation we find ourselves in, somebody may choose to do that."

State Assembly Budget Committee Chairman Gary Schaer (D-Passaic) said Christie's "extremely aggressive, if not radical" proposal is destined to fail.

"I think what the governor is doing is saying 'I put out an idea. I've done my job, now (the legislature) should do theirs','" he said. "It's great politics."

Christie's spokesman Kevin Roberts said the governor has "put forward a comprehensive plan and, in that regard, now need the Legislature to step up and be a part of the conversation and take action on solutions too."

As of 2005, nearly a quarter of private sector workers with defined-benefit pension plans were enrolled in cash balance plans, according to the U.S. Bureau of Labor Statistics.

California, Nebraska, Texas and Kansas also operate cash balance plans for at least some state or local employees, according to a 2014 Pew report.

Models vary, but in Kentucky's scheme, workers contribute 5 percent or 8 percent of their pay, depending on their job classification, and the state or municipality kicks in another 4 percent or 7.5 percent.

While 401(k) plans are vulnerable to markets, Kentucky guarantees at least a 4 percent investment return. If returns beat that, workers keep most of the excess and the state puts its share away for a rainy day.

Employees are vested after five years, and can leave with their entire balance.

But an Urban Institute study of Kentucky's plan found that employees with fewer years of service would receive higher benefits, and more tenured employees would receive less.

For example, a worker earning the average salary and retiring after 35 years would get a $47,900 pension under the traditional plan, according to the Urban Institute. If that worker was in the cash balance plan, the pension would be no more than $33,200 a year.

However, that same worker would get a traditional pension of $3,200 if he or she retired after 15 years, as opposed to anywhere from $7,400 to $15,300 under the new plan.

Healey agreed that younger employees may be better off than mid-career employees under the new plan. Plans for the lowest tier of workers, hired after the 2011 reforms, receive little state money.

"This is equal and fair across both older and new workers," Healey said. "If we were starting from scratch in New Jersey, this is the plan we would offer everybody. So let's offer it."

The combination of the frozen pension plans, new pension plan and Social Security will still provide "a solid basis for retirement" for the older workers, he said.

Schaer stressed there's still the issue of fairness.

"It is a significant change from what we promised to employees when they joined government service," he said. "We're not just talking about someone who's been in government service for 10, 15, or 20 years, but someone who's on the verge of retirement."

According to the governor's pension commission, freezing the existing system would save the state and local governments more than $2 billion in a single year. The cash balance plan would cost the state and local governments $1.23 billion a year.

Jason Bailey, director of the Kentucky Center for Economic Policy, said the less generous pension benefits for longtime workers will spur faster turnover. And while Pew touts cash balance costs as more predictable than those of traditional pension plans, Bailey said that doesn't necessarily mean they'll be less expensive.

"The only thing that we did get out of it was they did make this commitment to pay the full (annual required contribution) going forward and created this little bit of revenue," he said.

Kentucky's 2013 reforms came just a few years after another retooling of the system in which the state agreed to gradually increase payments until reaching the annual required contribution in 2024.

New Jersey made a similar promise in a 2011 pension law that brought national attention to Christie, who is considering a run for president.

But the governor last year didn't keep to the state's promised contribution, slicing more than $2.5 billion in payments. He now says his initial reforms didn't go far enough.

Christie's presidential hopes are blocking a pension deal | Moran

By Tom Moran | Star-Ledger Editorial Board
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on April 26, 2015 at 8:00 AM, updated April 26, 2015 at 10:05 AM

If Gov. Chris Christie didn't lie so much, I might be tempted to feel sorry for him these days.

But he tells such whoppers.

In his latest swing through New Hampshire, he repeated his claim that New Jersey has the highest taxes in the country. We rank No. 7 in combined state and local taxes per person, and No. 10 as a share of income.

And he was only clearing his throat with that one. On Thursday, he told voters at a town hall meeting in Cedar Grove that Democrats are the ones who shorted the pension fund.
"The Legislature passed it, and I signed it, with that number in it," he said.

Scary. Because this is not a small point; it is at the core of the pension case now before the state Supreme Court.

The truth is that Democrats passed a budget with the full pension payment, to prove it could be done. Christie removed that money with his line-item veto. Did he really forget that?

Here's why we should all care: New Jersey's budget crisis is the second worst in the nation, behind Illinois'. But instead of looking for common ground with Democrats, the governor is taking reckless pot shots and refusing to budge.

Senate President Stephen Sweeney, the governor's lead Democratic partner in his first term, says the bromance that made the 2011 reform possible is now dead.

"It's night and day," says Sweeney (D-Gloucester). "In 2011 we did things face to face, a lot of discussion. Now he attacks me on Twitter."

If you want to dig for the roots of this standoff, start with Christie's presidential campaign.
That ties his hands. He can't do anything to offend Republican base voters, like sign a small tax hike on incomes over $1 million.

Democratic leaders vow they will not cut a deal that puts the entire burden on public workers, as Christie has proposed.

A bump in the "millionaires tax" would not come close to solving the fiscal problem, but it would soften the need for cuts a bit, and help party leaders sell the deal to fellow Democrats.

"At the end of the day everyone has to be realistic," says Assembly Speaker Vincent Prieto (D-Hudson).

This is where the poison left by Christie's broken promise does such damage. The 2011 reform was a bargain: Public workers had to pay more into the system and take less out. They did their part.

The governor agreed to ramp up pension payments in return. But his "Jersey Comeback" never materialized, so he broke that promise and shorted the funds.

This time around, Democrats and their union allies are in a sour mood. They feel burned.
Sweeney and Prieto both joined the union lawsuit that seeks to force full pension payments on the 2011 schedule. But they both know that would be almost impossible. It would require $3.1 billion next year, and as much as $5 billion two years later.

In interviews, both Sweeney and Prieto say they will present a budget this year that includes full payments, but would settle for less if a fair political deal could be reached.

"We may need to spread the payments out over a longer period of time," Prieto says. "But we should be making a good-faith effort to honor what we are supposed to be doing."

The wild card is the Supreme Court, which hears the case in two weeks. The key question is whether the 2011 law amounts to a contract that must be honored, and the smart money says the unions are likely to win again, as they did in lower courts.

But what then? The court has no means to enforce its ruling. And Christie will be sorely tempted to go rogue and defy the ruling if he loses. Attacking a liberal court and public worker unions could work magic among the GOP base.

"It's conceivable they would hold the governor in contempt," says professor Robert Williams, an expert on the state constitution at the Rutgers-Camden School of Law. "We could face a constitutional crisis."

Courts try to avoid that by giving the players political wiggle room, as the lower court did. If that happens, the search for political compromise will resume.

And that's where Christie's political campaign is such a curse to this state.

Democrats seem ready to cut that deal if it includes a millionaires tax. And two-thirds of New Jersey voters think it should be included.

But Christie doesn't need our votes anymore. He's competing for the crazy GOP base vote now. And that could be toxic for New Jersey's future.

Tom Moran may be reached at tmoran@starledger.com o

Friday, April 24, 2015

N.J. public worker pension fund gap widens to $40B

N.J. public worker pension fund gap widens to $40B

By Samantha Marcus | NJ Advance Media for NJ.com
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on April 23, 2015 at 5:40 PM, updated April 24, 2015 at 1:04 AM
TRENTON — New Jersey's funding gap for public worker pensions continued to widen last year to $40 billion, adding $4.5 billion in pension debt from 2013.

The unfunded liability, or the difference between the money the state has on hand versus what it would cost to fully fund benefits for future and current retirees, surged as the state slashed planned payments into the system, which ranks among the largest and least healthy in the country.

The pension system was worth about $42.5 billion at the end of the 2014 fiscal year last June, while the price tag to meet those retirement promises was $82.6 billion, according to actuary reports for the state's seven pension funds released this week.

As a result, the ratio of assets to liabilities slid from 55.6 percent to 51.5 percent. Experts generally say a pension fund with an 80 percent funding ratio is considered healthy.

"We were expecting it because the governor has failed to put in for two and now coming up on three payments," said Tom Bruno, chairman of the Public Employees' Retirement System Board of Trustees. "It didn't surprise us."

The pension system has three funding streams, including worker contributions, public employer contributions and investment returns.

Gov. Chris Christie scrubbed $2.4 billion from payments into the fund in 2014 and 2015. And the $1.3 billion proposed payment for the upcoming 2016 fiscal year that Christie hailed as the largest in state history is $1.8 billion less than he was scheduled to pay in and less still than what actuaries recommend.

After Christie slashed the state's payment in 2014, labor unions fought him in court and lost. They won a trial court battle in February to force Christie to restore this year's payment, and the state Supreme Court will hear that case next month.

The unfunded liability has been climbing since the turn of the 21st century largely because of investment losses, increased benefits and chronic underfunding. In a National Association of State Retirement Administrators's study of states' contribution from 2001 to 2013, New Jersey had the worst record.

Within the pension system there are seven individual pension funds for police and firefighters, teachers, judges and other public employees. Two of the largest funds — the Teachers' Pension and Annuity Fund and the Public Employees' Retirement System — are on pace to run out of money within 12 years.

Scott Porter, a Milliman actuary, told the trustees of the teachers' fund on Wednesday that he's concerned about "the ongoing solvency of the fund," which could be depleted by 2027.

In the world of pension funding, he said, "that is very, very close. It's tomorrow."

The state portion of the Public Employees' Retirement System, which trails the teachers as the second largest pension fund, is just 43.8 percent funded, down from 48.1 percent in 2013. Meanwhile, the portion of those liabilities covered by municipalities, is 73.5 percent funded.

The Police and Firemen's Retirement System is also largely funded by local governments, and that chunk is 76.3 percent funded, while the state's smaller end is 47.2 percent funded.

The fund is stable "in spite of" the state underfunding the system, said Patrick Colligan, president of the New Jersey State Policemen's Benevolent Association.

"Our members are out there everyday working for our communities and continuing to make the payments required to make sure members and their families have a stable pension fund for their retirement, he said. "Today's actuarial report shows quite clearly that it is well past time for Gov. Christie to begin meeting his responsibilities."

A spokesman for the Department of Treasury declined to comment Thursday.

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Samantha Marcus may be reached at smarcus@njadvancemedia.com . Follow her on Twitter @samanthamarcus. Find NJ.com Politics on Facebook.

Christie accuses Dems of 'suing themselves' over pension shortfall they created, approved

By Claude Brodesser-Akner | NJ Advance Media for NJ.com
Email the author
on April 23, 2015 at 12:35 PM, updated April 23, 2015 at 4:09 PM
CEDAR GROVE — Gov. Chris Christie on Thursday accused the Democratic leaders of the state Legislature of "suing themselves" after they joined in court papers of public employee unions suing the state to make a full pension payment.

Speaking at a town hall meeting in Cedar Grove, Christie went on the offensive against the NJEA and state Democrats, placing the blame squarely on a Legislature that had accepted and approved a budget with a lower pension payment in the first place.

Christie acknowledged "the payment we made this year was supposed to be $1.6 billion more than it was" but noted that, facing a revenue shortfall, the Democratically-controlled Legislature had approved a final budget that called for a pension payment of a slightly more than $650 million dollars.

MORE: Christie warns parents opting out of PARCC could trigger reduced services, higher local taxes
"They (the NJEA and its supporters in the Legislature) are now suing to force the court to force them to do what they didn't do," Christie said, "They are essentially suing themselves. It's extraordinary."

The reality is a bit more complicated: The New Jersey Legislature earmarked $2.25 billion into the Appropriations Act. However, the governor then used a line item veto to cut a little over $1.5 billion, leaving a pension payment of $677 million in fiscal year 2015.

Instead, Christie argued, the state should institute a three-step reform package that will reduce health benefits from platinum plus to "gold" and reinvest the savings to help shore up the pension system, which would result in $3 billion in savings.

He also argued the creaking pension system's benefits should be frozen and the administration of the payments be removed from the hands of politicians and turned over to the unions.

"We do those steps, we fix this problem," Christie said.

However, the NJ Education Association doesn't see it that way. On Tuesday, it announced it was cutting off talks with the Christie administration over pension reform, and focusing its efforts on getting a payment via the courts.

Christie insisted he would love to make the payment, but warned the assembled crowd of 200 in the gym of Essex County College's Public Safety Academy that there was no "money tree" that would magically make up the short fall.

"Here's the problem," said Christie, "You're the money tree. They're Robin Hood, alright: They're gonna take it from you, and give it to them."

Christie added the alternatives were too harsh to bear: Revenue increases in either the sales or income tax would need to occur, stifling growth and jobs. To make up the shortfall, the sales tax would need to be hiked to 10 percent, or the income tax would need to be raised by 29 percent.

Raising the millionaire's tax further would only provide $500 million of the missing $3.3 billion, Christie said, but he also warned it would come with a side-effect.

"Be careful," he warned, "You know what happened last year? 10,000 millionaires left New Jersey. People of wealth can move, and they can move easily."

Christie noted that many of the well-heeled had decamped to Florida, perhaps permanently.

"Why? Not just the wonderful climate. Zero income tax," he said, "Don't fall for it."

Thursday, April 23, 2015

NJ Releases PFRS Actuarial Report; Pension Fund Remains Stable in Spite of State’s Refusal to Meet Obligations

NJ Releases PFRS Actuarial Report; Pension Fund Remains Stable in Spite of State’s Refusal to Meet Obligations
Posted: Wednesday / 4.22.2015 / 1:45 PM

Tags: PFRS
WOODBRIDGE- New Jersey State Policemen’s Benevolent Association President Patrick Colligan today released the following statement on the actuarial report released by the New Jersey Division of Pension and Benefits detailing the fact that the Police and Firemen’s Retirement System (PFRS) continues to be stable with a funding level of 76.9%.  This stable funding percentage comes in spite of the fact that the additional 1.5% contribution members are being forced to pay every year is not being used to fund their pensions as mandated in the Chapter 78 legislation of 2011 and is instead being funneled to towns and counties across New Jersey to decrease their required contributions.  Chapter 78 increased PFRS members’ pension contribution numbers from 8.5% to 10%, representing the highest contribution of any employee in New Jersey.

The stable funding level is also in spite of the state refusing to meet their mandated funding obligations and flies in the face of Governor Christie’s ongoing efforts to paint the PFRS fund as in crisis.  A review by NJSPBA Trustees shows that if the state met their funding obligations and the 1.5% additional contribution were being used to fund the PFRS as the law states rather than being funneled off to towns and counties to fulfill their own pension obligations, the fund would be operating at an even more robust 88% funding level.

“Our members are out there every day working for our communities and continuing to make the payments required to make sure members and their families have a stable pension fund for their retirement.  Simply put, they are meeting their responsibilities and abiding by the agreed upon terms from when they first agreed to serve the public.  Today’s actuarial report shows quite clearly that it is well past time for Governor Christie to begin meeting his responsibilities.

The PFRS system is stable at almost 77% and the only thing holding it back from operating at an almost 90% funding level is the fact that the governor not only refuses to meet the state’s obligations, but he is also taking the additional 1.5% our members are paying for their pensions and sending it back to towns and counties across New Jersey instead.  This funding level would also put us much closer to restoring COLA for our thousands of retired members who have not seen a cost of living adjustment since 2011.

Today’s actuarial report proves what we have long known, Governor Christie and the state’s actions as they relate to the PFRS funding are nothing short of outrageous.  Our members are literally having an additional 1.5% syphoned directly from their paychecks as a result of Chapter 78 that is supposed to go towards funding our pension and, instead, the governor is continuing to give it back to the towns and counties.  Is it really asking too much to ask for our own money back?  Instead of attempting to deceive the public that the PFRS fund is in crisis to try and score public relations points, Governor Christie should acknowledge the fact that our system is stable and would be in even better shape if he stopped shirking his responsibilities.  Like the governor, our members don’t consider themselves to be wealthy.  The difference is our members actually aren’t.”

Sweeney and Prieto to file amicus brief in support of unions in pen/ben battle

Sweeney and Prieto to file amicus brief in support of unions in pen/ben battle

By Chase Brush | 04/20/15 3:58pm


With a second court battle over the state’s failure to put up a full payment into its public pension and benefits system pending,  Democratic leaders of the legislature are looking to send the judge presiding over the case a statement that they’re on the side of the plantiffs.

In a amicus brief made public today, Senate President Steve Sweeney (D-3) and Assembly Speaker Vincent Prieto (D-32) announced that they plan to officially inform Superior Court Mary Jacobson of their disapproval of the state’s failure to make the payments, a move that has had Gov. Chris Christie’s administration and public labor unions at loggerheads in recent months. The two first went to court over the issue last year, when Christie decided against making a scheduled payment into the fund for fiscal year 2015.

Christie’s proposed budget for the coming year included another partial payment into the fund, driving public labor organizations — such as the Communication workers of American, the AFL-CIO, and the New Jersey Education Assocation — to file second joint suit against the state for FY2016.

“We want to make it clear to the Court that the administration’s refusal to make the legally required pension payments violates the law and disregards legislative intent,” Sweeney and Prieto said in a joint statement today. “The pension reform bill approved by the Legislature and signed by the governor is a law he can’t choose to ignore. He has a legal, constitutional and contractual obligation to make the required payments.”

Last time around, Jacobson sided with unions in ruling that the state has a constitutional obligation to its public employees under the 2011 pen/ben reform law signed by Christie and the Democratic legislature. Christie has since argued that the state’s shaky fiscal footing requires further reforms to the system, and has proposed a pension overhaul plan that would freeze the state’s current system and create a new one to be possibly managed by unions like the NJEA.

That plan too has been met with criticism, particularly from police and fire unions, who’s funds their representatives argue are largely solvent and in no need of reform.

Supporters of upholding the 2011 law and making the scheduled payments, including Sweeney and Prieto, contend that if the governor had followed the funding timetable as required by the statute, the state be “well on the way to restoring the financial strength of the pension system.”

“The law explicitly creates a contractual obligation to make the contributions,” Sweeney and Prieto said today. “The Legislature met the requirements of the law by appropriating $2.25 billion to make the payment for Fiscal Year 2015. The governor chose to veto the funding and to slash the contribution by $1.57 billion with a line-item veto.

“By appropriating the full payment, the Legislature met the requirements of the State Constitution. The governor can’t veto the constitution,” they added.

The court date over the FY2016 payment is scheduled for May 12, and Sweeney and Prieto said they plan to submit their amicus brief by that time. A Supreme Court hearing on Jacobson’s ruling on the FY2015 payment, which the Christie administration appealed earlier this year, will be held on May 6.

“We support the unions in their lawsuit to force the administration to obey the law. The workers are keeping their part of the agreement with increased contributions, the governor should do the same,” they said. “The continuing refusal by the administration to make the required payments is making the situation worse. The state’s credit rating has been downgraded a record nine times, the state’s fiscal stability has been undermined and members of the pension system are forced to live with the instability of an underfunded plan.”

Unions behind the lawsuit sounded off as well.

“The fact that legislative leaders Sweeney and Prieto are joining the unions’ lawsuit as a friend of the court strengthens our already strong case,” said Charles Wowkanech, president of the New Jersey State AFL-CIO, which represents one million union members and their families. “By committing to the lawsuit, the legislative leaders are demonstrating their belief that the governor must adequately fund the pension system to ensure its long-term viability. A superior court judge and three Wall Street ratings agencies agree.”

Wednesday, August 27, 2014

Christie ships pension funds to Wall Street pals, and therein lies a story

Chris Christie's stump speech always includes a passage about how the tough choices had made with regard to pensions, but those choices deserve some healthy scrutiny (Andre Malok/Star-Ledger)
 Star-Ledger
on August 27, 2014

There is a curiously overlooked story from David Sirota that examines the mutually profitable kinship between Gov. Chris Christie and Wall Street hedge funds, and the most curious part is that some of them receive an extraordinary amount of New Jersey business – specifically, the stewardship of state pension funds -- after being identified as the guys who bankrolled the political career of Christie himself.

Among the findings that might make your head explode:

1. There has been a 300-percent spike in management fees over the last three years. Somehow, that seems a bit high, but then, he’s a man who likes to pay for premium services.

2. We spent $400 million last year alone to manage these funds – and the funds' 15.9-percent returns are well below the 17.4 national average, according to an analysis firm.

3. Some funds are managed by Elliott Associates, which is run by uber-vulture Paul Singer -- a Christie sugar daddy that you should know, because he’s the kind of guy who can bring entire governments to their knees. Yes, that includes our own.

One paragraph for your perusal:

The state has sent more pension money to big-name Wall Street firms like Blackstone, Third Point, Omega Advisors, Elliott Associates and Grady's old firm, The Carlyle Group. Additionally, the amount of fees the state pays financial managers has more than tripled since Christie assumed office. New Jersey is now one of America's largest investors in hedge funds. The "maximized returns" have yet to materialize. Between fiscal year 2011 and 2014, the state's pension trailed the median returns for similarly sized public pension systems throughout the country, according to data from the financial analysis firm, Wilshire Associates. That below-median performance has cost New Jersey taxpayers billions in unrealized gains and has left the pension system on shaky ground. Meanwhile, New Jersey is now paying a quarter-billion dollars in additional annual fees to Wall Street firms -- many of whose employees have financially supported Republican groups backing Christie's reelection campaign.

There are a few questions that need to be answered here, starting with this one:

Does this story deserve more traction, or have we grown so anesthetized by our leaders taking gargantuan risks with our money to benefit his political cronies?

That's not a rhetorical question.

Chris Christie's hypocrisy on full display in Illinois

 Chris Christie is the man who wasted $12 million on a special election presumes to instruct Illinois on proper poll etiquette.

 Star-Ledger
on August 27, 2014

Time once again to hop aboard the traveling hypocrisy circus, governed by the man who never misses an opportunity to employ the same tactics he pretends to deride.

Gov. Christie was in Illinois Tuesday, stumping for some private equity guy running for governor who won’t release his tax returns, and he gave his usual breathtaking show of chutzpah by accusing the sitting governor, Pat Quinn, of manipulating the turnout in November.

“He will try every trick in the book. I see the stuff that’s going on,” said the omnipotent Oz. “Same-day registration all of a sudden this year comes to Illinois. Shocking. I’m sure it was all based upon public policy, good public policy to get same-day registration here in Illinois just this year, when the governor is in the toilet and needs as much help as he can get.”

Just two problems with that. First, it wasn’t the Democrats who got same-day registration passed, it was the Illinois Board of Elections, which consists of four Republicans and four Democrats. And Christie’s candidate, Bruce Rauner, supported it.

Second: Every study shows that same-day registration works superbly in the other 11 states it is used, increasing turnout by 10 percent, eliminating arbitrary deadlines, and facilitating poll access for mobile voters such as college students – while safeguarding against fraud.

"Debilitating stupidity" -- Dick Armey on Chris Christie's 2013 election chicanery
But Christie, now a leader of the party that champions voter suppression, calls same-day registration a maneuver that “would make New Jersey blush.”

Really, that’s precious.

Remember this comes from a governor who knows something about manipulating votes. He spent $12 million in taxpayer funds to hold a special election in October last year and called for a special election so that he wouldn't have to appear on the ballot with Cory Booker in November. He knew that Booker's candidacy would draw out the Democratic base, and he was determined to avoid it, so that he could run up his own margin of victory.

Now, that should make the man blush.

There were a lot of predictable reactions to this shameless hypocrisy, but the most memorable came from the unlikeliest of sources: “Debilitating stupidity," former Republican leader Dick Armey called it on CNN. "Dimwitted."

But that’s voter suppression, and Chris Christie has fully embraced the method. And on Tuesday, he whined about his inability to exercise it.