Nationwide, dozens of cities and states are facing pension
problems, according to a recent report from the Pew Center. But Detroit,
Michigan and New Jersey are front and center on the debate. New Jersey's
crisis, in fact, goes back decades, and the situation only has worsened in
recent years.
Gov. Chris Christie (R) says the Garden State's pension
system—which is expected to hit more than $54 billion in unfunded liabilities
by fiscal year 2018—needs to be fixed because it's unsustainable
long-term. Christie's office now has launched a public relations
campaign to raise awareness about the looming financial crisis, unless
something is done.
Despite the enactment of several laws to reform New Jersey's
system in 2010, including requiring public workers and taxpayers to chip in
more, New Jersey this year faced an $807 million budget shortfall. State
Democrats had proposed raising taxes on high-income earners and businesses to
fill the gap. But Christie chose to cut two legally required pension
payments to a combined level of $1.38 billion from $3.8 billion. Those
cuts aren't enough though so he has promised to introduce more reforms later
this year.
Christie told a radio audience in June that the state is meeting
its current obligations but won't be able to meet the state's pension
and health-care commitments to its 700,000 active enrollees and retirees’ long
term. The reform is to avoid the same problems that have plagued Detroit,
which is working to exit Chapter 9 bankruptcy. Detroit's bankruptcy trial is
scheduled for August 14.
As New Jersey works out a concrete proposal, public worker
unions in the state are already fighting back. Union officials say they intend
to file a lawsuit in a bid to force Christie to make full pension
contributions, and vowed to battle any proposal the governor makes to reduce
pension benefits.
Christie's office recently launched the PR initiative to
explain to residents that fixing the crisis won't be easy. They posted a mock
movie trailer entitled, "Coming to a Shore Town Near You: No Pain. No
Gain." State Democrats complained the video is mocking the pain and suffering
of the middle-class families.
Christie was also scheduled to face constituents directly in
the first of what his office calls conversations focusing on the impending
fiscal crisis the growing entitlements of pension, health benefits and debt
services are causing. The venue for the town hall is also not without
controversy. It's to be held near a playground built as part of the Sandy
Ground Project organized by the New Jersey State Firefighters’ Mutual
Benevolent Association. The association’s president finds it completely
unconscionable that the governor chose the park to launch his attack on the men
and women who provide the frontline of defense for our state.
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