New Jersey Owes Billions
This should be good.
All those overpaid state employees earn a pension. As we first mentioned in 2005, the pension is severely underfunded. Governors Corzine, Codey, McGreevey, DiFrancesco, and Whitman have shunned the obligations the state has to this fund. It is an obligation. This is money owed for work already done.
Today, the AP reported that these administrations have been less than honest about the health of the pension when it decided not to make payments into the fund as required by law.
For years the state has been contributing less money into its pension fund than it should. However, The New York Times said its analysis shows New Jersey overstated what it has claimed to have contributed, raising concern about how much money is in the pension fund , the nation’s ninth largest, with reported assets of $79 billion.
The New York Times analysis said the state recorded investment gains immediately when the markets went up, then delayed recording losses when the markets went down. It reported money to pay for health care costs as contributions to the pension fund and claimed it had excess assets that allowed it to divert pension contributions to other uses, such as aid to poor schools.
For instance, the newspaper noted New Jersey recorded a $551 million contribution to its teachers pension fund for the 2005 fiscal year in a bond offering statement, but reported a $56 million contribution in an audited financial statement for the fund.
We all know New Jersey’s government is inefficient. Now it looks like it is corrupt too. The federal government is now looking into this. If the state violated the law by mixing pension funds with other funds (and it sure looks like it did), New Jersey will be required to add the “missing” money to the pension.
Where do you think that will come from, dear reader?
Instead of gaming the system, if government looked at funding the pension as liability, it would actually end up in the budget each year. That our budget is already bloated and far too high doesn’t account for the billions the state has skirted paying. McGreevey wanted to hold up municipalities to pay the back pension money. Of course, that spiked our property taxes.
What will be Governor Corzine’s solution? So far, it has been to stick his head in the sand.