Budgetary pressures vary greatly, despite calls for more federal aid in general and tax hikes in some locales. In New York, state revenue collected from April through December 2020 was 4.1% lower than in the year-earlier period, according to data from the Urban Institute think tank.
In New Jersey, the drop was 2.4%. With tax revenue outperforming earlier projections, Democratic Gov. Phil Murphy on Tuesday proposed making a full payment to the state’s pension system for the first time since 1996. California has done even better, with revenue collections growing 1.2%.
While a governor can call on lawmakers to raise taxes, the odds of success for the various proposals depend partly on which parties control state legislative chambers. Additionally, Democrats in Congress have pushed to include money for cities and states in an economic-recovery package, which could shift the equation.
Gov. Phil Murphy?s call for New Jersey to make its first full pension contribution in 25 years is generating questions about retirement-system overhaul in one of the nation’s lowest-rated states, and how might the capital markets respond.
Murphy on Tuesday revealed the proposal to pay toward pensions roughly $6.4 billion, or about 14% of his $44.8 billion fiscal 2022 budget proposal to lawmakers. Overall spending would rise 10%. Democrat Murphy’s election-year budget would increase aid to schools and provide income-tax rebates to low- and middle-income families.
Making the full actuarially required contribution will need an additional $1.6 billion expense, according to Murphy. New Jersey was initially scheduled to earmark 90% of its full contribution this year under a ramp-up plan.
New Jersey Gov. Phil Murphy is expected to propose making a full payment to the state’s chronically underfunded pension system for the first time since 1996, a sign that the blow from the pandemic to all states’ finances isn’t as brutal as officials originally feared.
Mr. Murphy, a Democrat, will call for a $6.4 billion payment to the pension system in his budget address Tuesday, senior members of his administration said. The Murphy administration has been ramping up pension payments and originally intended on making a payment of $5.76 billion for the fiscal year that begins in July.
That $6.4 billion is what the actuaries hired by New Jersey for the specific purpose of providing absurdly low contribution amounts came out with for the 7/1/21 to 6/30/22 plan year. It includes a massive amortization portion to make up for decades of absurdly low contribution amounts (some of which were not even deposited).
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That very day, January 2, Craver worked from 3 in the afternoon until 11:30 at night to create Covid19 Vaccine TX, a site listing possible vaccination locations across the state. As a digital product designer, she knew that a site like this would have to be easy to read, intuitive to navigate, and quick to update. The idea was that people could upload information about vaccination sites, with each entry answering three questions: Was the vaccine available that day? Was the location taking appointments? Was there a wait list?
Craver loaded the project on the cloud-based spreadsheet service Airtable, posted a link on Reddit, and went to bed. When she woke up the next morning at 7 a.m., one entry was filled out. “At least somebody cares,” she remembers thinking. She spent the rest of the day manually inserting information for about 1,400 locations in the state. “I’ve been going nonstop since,” she says, estimating that she puts in about 40 hours of her free time every week to maintain the site. It has received 50,000 total visitors since launch.
Public servants often spend multiples of what their salaries will be in the jobs they seek in order to get those jobs since they have other incentives. One of those is likely the pension, even for part time employment, that comes with the job.
Though job-hopping makes it impossible to finger all the mayors or council people who game the system, here are some whose last employer was the Office of the Governor, Senate, or General Assembly who, based on data on retirees in the New Jersey Retirement System taken from the the state pension website are getting over $50,000 annually – along with some other familiar names.
Insurance firms have been siphoning off money from New Jersey’s pension funds for the past 15 years thanks to a policy decision that shifted financial obligations for employee injuries to pension funds, according to an investigation by acting state Comptroller Kevin Walsh.
A report on the investigation said that a 2006 policy adopted by the Division of Workers’ Compensation (DWC) encourages injured employees to accept continuing medical monitoring and coverage instead of cash settlements. The report said the approach, which puts the financial burden on pension funds to pay workers rather than on insurance firms, has provided “a windfall to insurers and financially harms the pension funds.”
At least 114 public employees received both an accidental disability pension and a medical monitoring settlement between 2016 and 2019, according to the report. However, it said the exact cost to the pension funds was unknown because there are no records or data on what insurers would have paid in the absence of medical monitoring settlements.
Despite attempts to rein in police union contracts in New Jersey, costly provisions remain common, an unprecedented analysis by the Asbury Park Press and ProPublica found. The news outlets identified contract clauses throughout the state that protect officer payouts that cost the public hundreds of millions of dollars.
In 2010, state lawmakers passed a law to stop huge retirement payouts for unused sick days, but taxpayers are still funding the largesse. North Bergen approved generous payments to four retiring officers in 2019, including a sergeant who got $75,330.32 for unused sick time. Some retirement payouts can be even higher. In 2017, a chief in Jersey City collected more than half a million dollars.
The debt for unused sick time and vacation time, which is largely dictated by the contracts, totaled at least $492.9 million for municipal police alone in 2019, according to a review of town budget records. The liability is primarily due to officers who were hired before the 2010 law passed.
Author(s): Andrew Ford, Asbury Park Press, and Agnes Chang, Jeff Kao and Agnel Philip
The New Jersey State Comptroller released a report examining a practice within the state’s Division of Workers’ Compensation (DWC) that allows state, school and local government employees injured on the job to seek weekly benefits, a lump sum settlement or continuing medical coverage, in addition to an accidental disability pension.
As deleterious as this practice may be for the state pension fund, eliminating it will only cost taxpayers more when the bigger picture is considered.
The DWC’s policies encourage workers’ compensation petitioners to settle claims that undermine New Jersey’s pension funds, provide windfalls to workers’ compensation insurance providers, including joint insurance funds and private insurance companies, and provide medical monitoring and coverage to employees without evaluating whether these benefits are justified by the nature of the injury.