It’s no secret that New Jersey’s pension system is a disaster. According to the National Association of State Retirement Administrators, the Garden State–from 2001-2013–had the worst record in the nation of funding its pension system, making only 38% of its annual required contributions. And now, according to Governor Christie (and despite his 2011 reforms), New Jersey still can’t afford to meet its pension responsibilities.
Certainly, Christie is not solely responsible for this mess; his predecessors are also guilty of pension offenses. Christie likes to brag that he has made the largest-ever contribution to the pension fund, but what he fails to mention is that he has skipped out on a whopping $14.9 billion in payments–$2 billion more than the five governors who came before him missed collectively. (And, moreover, Christie was the only governor to break the law in failing to fund the system.)
Here’s some more of what Chris Christie doesn’t like to tell people about his pension failures. (Keep in mind, again, that Christie claims New Jersey “doesn’t have the money” make the pension payments required by the law that he himself signed in 2011; more on that below.)
- New Jersey’s teachers have always contributed to their pensions and have paid more than $10 billion into the fund over the past 20 years–but by the end of this fiscal year, the state will have only contributed $3 billion to the fund since 1996. None of the state’s teachers has ever missed a pension payment, because they have never been allowed–or had the option–to do so.
- In 2009, Christie wrote an “Open Letter to the Teachers of New Jersey” (and wrote nearly identical letters to NJ police and firefighters) to make this claim: “I will protect your pensions. Nothing about your pension is going to change when I am governor.”
- Two years later, Christie signed into law Chapter 78, P.L. 2011, which required public workers in the state’s pension systems to contribute significantly more to their pensions and health benefits; further, new language in the law required the state to phase in a full contribution at a rate of 1/7 per year from 2012 to 2018–and continue to fund the pension system fully each year after that. Chapter 78 also states that members of the pension funds have a contractual right to the annual required contribution.
- In violation of his own law, Christie shorted the pension system by $2.43 billion in 2014 and is now proposing more changes that would further reduce benefits for public workers–claiming that the state cannot afford to make the legally-required payments.
- Christie has invested NJ’s pension funds in “high-risk, high-fee investments,” which according to pension consultant Chris Tobe cost the system $2.5 billion in unrealized returns.
- From 2010-2014, New Jersey has spent more than $1.5 billion on fees to Wall Street firms, many of which are headed by Christie campaign donors.
- New Jersey continued to pay hundreds of thousands of dollars in fees to Angelo, Gordon, & Co.–the Wall Street firm that hired Mary Pat Christie, the governor’s wife, as a managing director–for three years after Christie announced he would divest in the firm.
- In February, Christie settled an $8.9 billion lawsuit against ExxonMobil for just $225 million, and shortly after it was revealed that Christopher Porrino, the governor’s chief counsel for the case, “owned shares of a mutual fund [of which ExxonMobil was the largest holding] valued at more than $100,000.”
- Christie has awarded approximately $5.1 billion in corporate subsidies since he took office.
- Christie refuses to consider a Millionaire’s Tax, which would generate much-needed funds for the cash-strapped Garden State.
And this is an abbreviated list that doesn’t include Bridgegate legal fees, lavish expense account spending, and countless other financial offenses.
Since Christie took office, and as a direct result of his reckless spending and economic policies, New Jersey’s credit rating has been downgraded a record nine times–and the state’s unemployment rate remains among the highest in the nation. Members of the middle class are finding themselves in perpetual financial struggles, and New Jersey is one of only three states whose poverty rate rose from 2012 to 2013.
But don’t worry, because Wall Street is doing just fine.
In New Jersey, only about 20% of the state’s pension funding between 1993 and 2012 came from the state’s (non public-employee) taxpayers, though the governor would like his constituents to believe otherwise. The governor also would doesn’t want anyone to consider the connection between a solvent pension system and a strong economy, or the message he’s sending by sending billions of dollars to Wall Street instead of using them to strengthen the state’s middle class. Instead, Governor Christie spends his time vilifying and demonizing public workers, and he’s accomplished as much by perpetuating the public’s unfounded but increasing mistrust of public employees. (In the case of teachers, Christie has happily perpetuated the myth that our educators and schools are failing.)
New Jersey taxpayers should be furious–but not at public workers, who have never skipped pension payments and are contributing at record rates to their health benefits. Not at teachers, who stand faithfully in front of classrooms in schools that for decades have ranked among the very top in the nation.
No: taxpayers should be furious at Chris Christie, who has enriched his friends with billions of taxpayer dollars at the expense of all of New Jersey’s residents.
I leave you with this: at the beginning of his term as governor, Chris Christie said, of public employees, “Our benefits are too rich [actually, Governor, NJ ranks 95th out of the top 100 plans nationally for “pension generosity“], and our employees aren’t contributing enough, either” [it wouldn’t be difficult to find teachers who would share a pay stub revealing a $1,000+ monthly contribution to their pension and benefits].
Yes, that quote came from the same Chris Christie who has managed to spend $82,594–more than most teachers make for a year of work–of taxpayers’ money to buy food and alcohol at concession stands at MetLife Stadium.
Talk about benefits being too rich.
*Adding, on June 4th: David Sirota is reporting that Christie’s administration has deliberately omitted information about Wall Street fees in its pension analysis reports (emphasis mine; read the whole article here):
“The Christie administration’s pension analysis, obtained through an open records request by International Business Times, omitted so-called performance fees that the state is paying to Wall Street. Those levies, which give financial firms a cut of the state’s investment gains, now total hundreds of millions of dollars a year. A Christie administration presentation to state pension trustees also obtained by IBTimes similarly omitted those performance fees”