A New Jersey Teacher Explains How Governor Christie Stole From Workers Pensions To Feed His Fat Cat Corporate Friends.
Offers A Warning To New Hampshire As Christie Stumps For GOP Primary
By Melissa Tomlinson
(Image by Gage Skidmore FLIKR)
A year ago David Sirota mentioned New Jersey with his piece titled The Pension Heist: How politicians raid retirement funds to enrich their corporate masters. He was referring to the Good Jobs First report of January 2014, showing that revenues lost to corporations through loopholes and tax breaks were outpacing the current cost of pension benefits to state employees. Although New Jersey was not one of the ten states that Good Jobs studied, David’s warning can be clearly heard, as he points out how Christie refused to make the actuarially necessary pension funds contributions, citing budget shortfalls as his reason while handing out $1.5 billion in corporate tax breaks. Through Christie’s Urban Transit Hub Tax Credit Program, corporations were granted as high as 100% of some capital investments. While crying poor to the public to fund the state pension fund, he was also declaring that the state had enough money to afford these cuts because state revenue was on the rise.
It seems like David Sirota knew all too well what he was talking about. On February 24th, Governor Christie’s State of the Budget address focused almost entirely on New Jersey’s public pension system. So much so, the focus was to the exclusion of other pressing issues, such as transportation and infrastructure costs, since the Transportation Fund in NJ is, not surprisingly, also broke. Instead, taking a page out of the Republican playbook, Christie’s speech was full of plans about how he was going to freeze the current public pension system and create a new hybrid plan incorporating some features of a defined-contribution plan. This cash balance plan would redefine the whole pension system, transferring the state’s responsibility to fund public employee pensions to the state’s individual municipalities.
This ‘new’ plan that Governor Christie has recently been promoting all over the state of New Jersey as well as other states as he builds up support for his potential run for president is not really a new agenda. We have seen it before from those who seek to reduce the influence of the labor unions as a mainstay in the fight for economic freedom and democratic rights. Following the agenda, as explained in Crook’s and Liar’s “America’s Most Accomplished Looters: The Great Pension Robbery” New Jersey is rapidly approaching Layer Five: Convince the general public that public pensions must be “reformed” into defined contribution plans and that those plans could be more efficiently run by private financial interests.”
Whether or not this was the original intent when Christine Whitman neglected to fully fund the public pension in 1996, Governor Christie seems to have taken full advantage of the opportunity to completely gut the system by continuing the almost 20 year history of the state’s neglect to meet pension obligations. Current projection, without full payment or a clear plan to remit back payments in a manner to support future pension benefits, New Jersey’s pension fund is projected to be bankrupt as early as 2019.
But, not only did Governor Christie take advantage of the history of non- or reduced pension funding, he took things even further. In 2011, after a crisis call to the state that immediate action must be taken for the public pensions to be saved, he signed Chapter 78 into law. Chapter 78 ushered in Pension and Health Benefit reforms that changed the manner in which the State-administered retirement systems operate along with the benefit provisions of those systems. Changes were also made to the State-administered Health Benefits Programs that affected both the employees’ contribution and the benefit provisions of those programs. Essentially, this law imposed, over a four year phase-in period, an employee contribution toward health benefits that was tiered based on salary and coverage level, with the top tier paying 35% of the cost of health benefits premiums. In addition, employees saw an immediate increase to their pension contribution (from 5.5 to 6.5%) with an additional 1% phased in over 7 years. The end result is that all NJ public employees will contribute 7.5% of salary to their pensions by the year 2018. In exchange, the Governor gave his promise that the state would adhere to their own phased in payment schedule that would have the state at full actuarial funding by the year 2018. Governor Christie publicized this on the website of the Governor’s Office as a monumental legislative victory for himself and bragged that he would be saving the taxpayers billions of dollars, fixing the system in order to save it, and provide real, long-term fiscal stability for future generations of New Jerseyans. Governor Christie made good on his promise for two years, but in 2014 he made less than half the mandated payment. In 2015 he continued this practice, and his 2016 proposed budget includes only $1.3B of the $3.1B mandated by the law he both championed and signed. Worse yet, under Governor Christie, the state has managed to accrue an almost fivefold increase in the amount of investment and management fees paid to private financial firms. Even more questionable is the fact that Christie’s wife, Mary Pat Christie, works at a firm that received fees after the termination of their contract with the state.
An even deeper look into the investment portfolio of New Jersey reveals that Exxon receives 1.4% of the state’s investment portfolio. With Christie’s willingness to accept a settlement with Exxon for an environmental disaster for merely pennies on the dollar, more questions need to be raised.
The most interesting development in the whole saga of the New Jersey Public Pension battle is that on February 23, 2015, the day before the State of the Budget address, a State Superior Court judge ruled that the governor broke the very law, Chapter 78, that he had signed, by cutting the state’s required pension payments. Hypocritically, Christie is appealing that ruling and now claims the law to be unconstitutional. The public is left to ask how many times Christie will be afforded an opportunity to break his own law, once when signing it, and several times after when not authorizing several required full payments.
Christie claims that he will soon be announcing his final decision about the presidential race. The people of New Jersey send out a warning to the nation, beware the man that has the ability to twist the law to meet his own needs. There is no telling what could possibly occur if he were to be elected as the leader of our country.
Melissa Tomlinson: A teacher of students with special needs at the middle school level, realized that she was not alone in questioning the role of standardized testing in schools when she found the Badass Teachers Association. She was first pushed into the spotlight of fighting the methods of corporate educational reform when she faced Governor Chris Christie to ask about his public degradation of NJ Schools when they were rated one of the top three in the nation. Along with teaching and advocacy, Melissa runs the after school program in her school building, providing a place for students to receive extra educational assistance, exposure to career possibilities, and a safe place to be after school hours.
Melissa is the mother of two teenage sons and she fights for equitable education for all students, now and in the future.