Debating Revenues and Jobs Numbers Distracts From the True Crisis At Hand
We’re talking a lot about New Jersey’s economy and job market this week and the Assembly Budget committee is riding circuit, but no discussion of our state’s economic health is complete without an understanding of our government’s financial condition. And it isn’t good, Save Jerseyans. Governor Chris Christie’s pension reforms have saved taxpayers real money. There’s no doubt about it. But just like the 2.0 property tax cap, it’s more of strong splint than a permanent fix.
How bad is New Jersey’s pension problem?
Consider this: a few months ago, two economists analyzed what each U.S. state would need to do in terms of raw dollars to catch up and close the gap between their pension obligations and current levels of funding. You might’ve guessed that our predicament is among the most perilous in the Union and you would’ve been right. In New Jersey, each taxpaying household would need to kick in an extra $2,000 annually to make good on the reckless promises of past administrations and legislatures.
Not over 30, 20 or 10 years, folks. Every year. $6.7 billion per year. Nationwide the price tag is well into trillion dollar territory.
For a little perspective, in his most recent budget (the largest since 2009), Governor Christie contributed a record amount of cash to the state pension fund – approximately $1.7 billion. You can see how dramatically ‘under-funded’ it’s been for years! But that’s $6 billion less than the economists referenced above estimated we need to close the gap. It’s damn near impossible at this point without raising taxes to the point where New Jersey’s fragile economy would completely collapse.
That’d be a great thing for Pennsylvania, North Carolina and other competitors who want our residents and businesses moving there. Not so much for the Garden State.
I’m not saying Governor Christie is doing a bad job. I’m also not suggesting that he isn’t do more than any other New Jersey Governor in my lifetime. What I am saying is that as you listen to Trenton politicians bicker over job numbers and revenue forecasts, please keep in mind that it’s all a distraction from the REAL drags on our prosperity. Chris Christie has slowed the bleeding. Nothing short of a new legislature with radically different views concerning the appropriate size, scope and price tag of government will enable this state to reclaim its lost reputation as an economic powerhouse.