Sunday NYT magazine: How NJ Governor Chris Christie “did his homework” on state pensions and stuff.

From the (next Sunday) New York Times magazine–and I hope that pesky firewall does not get in the way.

I didn’t support Chris Christie when he ran in 2009. Maybe it didn’t matter, because I was merely New Jersey domiciled, not resident. So I didn’t get a state vote.

It seemed to me that Christie was going to be another one of these Republican governors who gets in there to take care of his/her friends. This started with a guy named Tom Kean (1982-90), then continued with a woman named Christie Whitman (1994-2001 or so), and then a smattering of the Acting Governors we had in the early 2000’s.

New Jersey has big tax problems. One, for instance, is that the property tax–the tax you have to pay to own and live in your house–is the highest average in America, something like $7,000 a year. (Yes.) You have to pay a lot of money just to live in your house. That is, if you even own it and not the bank.

Although new taxes were enacted (such as the state income tax in 1976) to try to bring relief for the high property taxes, the problem is that that money quickly got diverted for some other spending. And the high property taxes remained.

A lot of times the taxes make it impossible for poorer or elderly people to stay in their homes. I didn’t know it at the time, but when I was a youngster my elderly neighbor had to leave her house and go live with relatives because she couldn’t afford to pay the taxes on the house. She owned the house, but couldn’t stay in it.

That said, I just really didn’t think much of Chris Christie as a Republican or as a guy who was going to do very much more than get Somerset County lobbyist Dale Florio’s clients set up nice like in the Whitman Administration.

So to my surprise, I hear more and more that Christie is actually attacking some of the forty and fifty-year problems the state has, and one of them is that state workers have a much more generous compensation package than the average Joe.

You know from reading me, that when I get talking about taxes or some detail sh*t, you know, you either really want the details or you just tune out and go somewhere else. I’ve always studied the New Jersey situation, and I’ll tell you, I could never figure out how the state was going to afford all the things that were promised to the state workers.

Now, there is a governor saying the exact same thing.

Chris Christie is asking the state workers to pay 30% of their health insurance premiums. Right now, it’s just 1.5%. He is trying to get the pension retirement age to 65, from 60. He wants to move back the pension “denominator” ffigure to 60, from 55. (The denominator is what you divide your years of service by in order to figure out what fraction of your salary will still be paid as a pension. If you have 10 years in, and the denominator is 55, that’s 10/55 or 18%. If it’s a denominator of 60, it’s 10/60 or 16.6%)

The main union in the state, the New Jersey Education Association, is raising hell over Governor Christie’s reforms. But the more they yell, the more Christie is making the point that the state doesn’t have the money. The people pay $7,000 a year to live in their houses, and there is no more money. There really isn’t even the money to pay the promises that were made for retiree health care and such.

I said to some friends along the way in Japan, that if you ever wanted to see the American version of the nice setups that Japanese connected people make for themselves, they need only look at New Jersey. It is a state where things get done off “understandings” and “old traditions”, where change is a dirty word.

I am for unions and against what Governor Scott Walker is doing in Wisconsin. But if the money is not there to pay these past promises–which now turn out to be empty to some extent–no amount of histrionics is going to change that.

In my ideal New Jersey, they get the property taxes down by more progressive taxation. But the state’s top rate had gone to 10%, and the property taxes are as high as ever. So there isn’t much more that can be done.

I personally don’t think Christie’s that great. But he’s on the right issue, and he is making changes in a state where the vested interests did their heels in the same way the Japanese do when they don’t want to give in.

3 thoughts on “Sunday NYT magazine: How NJ Governor Chris Christie “did his homework” on state pensions and stuff.

  1. In California it`s bad enough public employee pension/benefits are completely bloated and the state is 25 billion in the red but the service public employees provide is often second-rate and another slap in the taxpayer`s face.

    I read the on-line comments for both the LA Times/SF Gate (which readership is about as far-left as you`ll find) and believe me public employee unions aren`t receiving much sympathy these days which is huge problem for Gov. Jerry Brown. The public is up in arms over taxes and will pay no more until something is done about the bloated public pension system. Unfortunately the public unions own the Dems and pensions are off limits. Likely what we will see is Brown make massive cuts in gov. services and hopefully pressure the taxpayers into giving more. Unfortunately again for the Dems I believe the public is hip to this and will continue to demand something be done about the bloated pension system before paying more in additional taxes.

  2. I did not cause the problem with NJ pension system. I pay in every week. Unions did not cause the problem with NJ pension system. POLITICIANS caused the problem with the NJ pension system. Christie Whitman decided lets just not pay into the system. The political pension is fully funded though, you dont see payments not being made there. This continued for years and now it is MY problem. Remember, I had no say in the matter. Politicians broke the law by not paying into the fund and now I have to suffer for it. What if after you paid monthly payments for your home for 20 years, the bank said we are broke and you are on your own to pay off your own house. By the way, we haven’t paid anything on it for 10 years either so you will have to pay that money too.

    I work in a school district. I don’t work here for the yearly salary because I could make 20,000 to 30,000 thousand more in the private sector. I work here for the benefits. That is the trade off for not making what everyone else makes to do the same job. Now you want to attack that too.

    1. If I read correctly, I think the issue with pensions for current state employees is not a CUT to pension, but that it the formula would be changed so that the pensions do not accrue as steeply as before.

      I am not “attacking” anything. I am a blog writer who comments on the things that are going on in specific places.

      The union, NJEA, says that when salaries and benefits are put to together, the compensation of state workers is competitive with the private sector. But many people don’t believe that. They think the union is using that line in order to say “no” to any changes.

      Clearly, something is going to give. The more the union demonizes people who raise the issues, the more likely it is that the membership will be stuck in lousier contracts going forward.

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