NJ Watchdog: Billions in loans may save pensions or sink New Jersey

The U.S. government should rescue troubled state pension plans with billions of dollars in long-term, low-interest loans, New Jersey Senate President Steve Sweeney proposed on Wednesday.

The trillion-dollar question is whether it would save public pensions or sink them deeper in debt. That’s the underfunding public retirement plans collectively face in the 50 states, according to a Pew Foundation study.

“A federal plan to restructure the pension debts would cut annual payments and save the taxpayers money,” said Sen. Sweeney, D-West Deptford.

Sweeney said New Jersey now needs to pay $6 billion a year for the next 30 years to erase its $51 billion in unfunded pension liabilities. He calculated the annual payment would be cut in half to $3 billion with a $50 billion loan from the Federal Reserve at an interest rate of 1-percent a year.

But the Garden State’s total public pension system shortfall is actually $170 billion -- more than three times the figure cited by Sweeney -- according to New Jersey Watchdog’s analysis of state Treasury records. It includes:

• $82.7 billion in unfunded liability for the pension plans of state workers
• A $20.7 billion shortfall for the pensions of local government employees
• $53 billion in unfunded health benefits for state retirees, and
• $13.8 billion to cover the post-employment benefits local government workers

Paying that full debt could cost roughly $10 billion per annum, even at 1-percent interest over three decades. The yearly payments would equal one-third of the entire state budget, currently $33.8 billion.

“Bad idea!” opined Bob Williams, president of State Budget Solutions, a non-profit watchdog. “How does Sen. Sweeney expect the feds to fund a low-interest loan program? Congress has enough problems trying to get the loans they need to pass their unsustainable federal budgets.”

The full story is online at http://watchdog.org/231882/pensions-loans-new-jersey/.

Buono Statement on Lottery Privatization Decision

For Immediate Release:


New Brunswick, NJ – Democratic gubernatorial candidate and State Senator Barbara Buono released the following statement in response to the Treasury Department’s decision to move the Governor’s reckless lottery privatization plan forward:

“Today’s decision is disappointing because the lottery was, by all accounts, operating exceptionally well in New Jersey. As the state’s fourth largest source of revenue, the lottery was responsible for funding essential programs for children, veterans and the disabled. However, under the Governor’s privatization plan, the essential revenue that these programs depend on will now be shared with a private company. Privatizing the lottery is an unnecessary risk at a time when New Jersey cannot afford any more setbacks.”

Facts Show Tough Week For Governor Christie

For Immediate Release: 
Friday, May 18th, 2012
 

Christie Clearly Cares More About YouTube Hits Than the Negative Numbers Plaguing New Jersey

(NEW JERSEY) – Several clear-cut facts and statistics released this week prove that the reality in New Jersey fails to match Governor Chris Christie's rosy rhetoric. At best, Christie's "Jersey Comeback" is delusional… at worst, it is an outright fib.

Governor Christie runs a remarkable public relations machine and does a tremendous job bending the narrative in his favor, while covering up bad news. So it's no wonder the only numbers that Christie and his press secretary keep talking about this week are the number of YouTube hits for his adorable, humorous video clip co-starring Mayor Cory Booker. Christie should spend less time troll-tweeting Jimmy Fallon, Conan O'Brien, Jerry Seinfeld and Tim Tebow links to his video in a bid for attention and more time getting to the bottom of why New Jersey is limping backwards under his watch.

Numbers don't lie. And here are several numbers that came to light this week alone:

• 230 - On Tuesday, a Department of Treasury report warned that tax collections are falling $230 million short of original budget projections in New Jersey.
• 121 - Yesterday, the Office of Legislative Services warned the state is facing an additional $121 million revenue shortfall in terms of energy tax receipts.
• 351 - When the numbers are crunched, New Jersey is looking at a combined $351 million miss of revenue projections for the year… yet Christie stubbornly continues to push an income tax cut that overwhelmingly benefits the super-wealthy, rather than more equitable property tax cuts that help middle-class families.
• 9.1 - Yesterday, the state Labor Department released April numbers showing that New Jersey's unemployment rose to 9.1% - a full percentage point higher than the national rate of 8.1%.
• 8.4 - Yesterday, the Mortgage Bankers Association reported that New Jersey now has the 2nd highest percentage of mortgage loans in foreclosure in the nation. This number continues to spike as rates nationally have fallen to the lowest levels since 2008.
• 54 – Yesterday, the Star Ledger reported that - over the past 8 months alone - Christie has taken 54 out-of-state trips (not even including trips to New York, Philadelphia or the Super Bowl). Ranging from last month's Wisconsin fundraising jaunt in support of union-busting Governor Scott Walker, to this month's Washington D.C. banquet with the right-wing Cato Institute, to last year's secret confab in Colorado with the Koch Brothers, Governor Christie has been more focused on burnishing his right-wing credentials and auditioning for Mitt Romney than he is on New Jersey. (This weekend, Christie will take his 55th trip when he heads to Lexington to headline a fundraising dinner for the Republican Party of Kentucky).

This week's numbers show unemployment and foreclosures going up and tax revenues going down. With depressing trends like this, the biggest question is now wondering which Christie staffer will be tasked to sheepishly take down the gigantic "Jersey Comeback" banner from Christie's taxpayer-funded political rallies.

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One New Jersey is shining a light on politicians who act against the best interests of New Jersey’s residents and who seek to divide our state for their own political gain. It is giving voice to the important issues that affect our daily lives. One New Jersey will closely monitor policy positions and actions of elected officials and expose their records on the issues that matter. You can follow https://twitter.com/#!/OneNJ or search for “One New Jersey” on Facebook.

President Obama's Weekly Address: Losing Insurance Can Happen to Anybody 9/12/09

The President discusses a staggering new report from the Treasury Department indicating that under the status quo around half of all Americans under 65 will lose their health coverage at some point over the next ten years. He pledges not to allow this future to unfold: In the United States of America, no one should have to worry that theyll go without health care not for one year, not for one month, not for one day. And once I sign my health reform plan into law they wont.

Obama Calls for ‘Common Sense’ on Executive Pay

From the NY Times, just moments ago.

WASHINGTON — President Obama announced on Wednesday a salary cap of $500,000 for top executives at companies that receive the largest amounts of money under the $700 billion federal bailout, calling the step an expression not only of fairness but of “basic common sense.”

“We all need to take responsibility,” the president said, in discussing the compensation restrictions, which include an exception for restricted stock. He also used the occasion to prompt Congress once again to act on his separate economic stimulus program, whose cost could approach $1 trillion.

Mr. Obama repeated his comments that some Wall Street executives had shown “the height of irresponsibility” when millions of nonwealthy Americans were bearing the burden of Wall Street’s failures.

The people are sick and tired, Mr. Obama said, of seeing Wall Street executives come to the government “hat in hand when they were in trouble, even as they paid themselves customary lavish bonuses.”

“This is America, we don’t disparage wealth,” the president said. “We don’t begrudge anybody for achieving success. And we certainly believe that success should be rewarded.”

But Americans definitely begrudge “executives being rewarded for failure,” especially if their earning are subsidized by taxpayers, “many of whom are having a tough time themselves,” he said.

Treasury Secretary Timothy F. Geithner, appeared with the president to announce the restrictions, which do not require Congressional approval. “The economic crisis was caused in part by a loss of confidence in our financial institutions, and it was made worse by a loss of faith in the quality of judgments made by some executives and some boards of directors,” Mr. Geithner said.

There is a general feeling among not-so-rich Americans, he said, that they are bearing a greater burden because of the financial crisis than those who helped to create it. Mr. Geithner said he would devote “every ounce of energy” to restore public trust in financial institutions — the bedrock of the country’s credit system.

The $500,000 salary cap will be stricter for those companies getting “exceptional assistance” from the Treasury Department. “Exceptional assistance” companies wanting to pay executives more than $500,000 will have to do so by using stock that cannot be sold or liquidated until the government money is paid back.

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