Pensions: Time for New Jersey to honor its obligation

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For far too long, governors of both parties have grossly underfunded the New Jersey Pension Fund, which contributed to the state’s rating downgrades. When John first joined the Assembly in 1996, the state’s pension fund had enough funding (across several accounts) to accommodate over 100% of the pension obligations. Today, the fund has half that amount.

As a firm advocate for reducing the amount of public employee retirement funds invested in hedge funds and other high-risk and high-fee investments, John will end the over-reliance on hedge funds in the state investment portfolio. He will start by eliminating the outrageous management fees that get paid to Wall Street hedge funds and banks.

These hedge fund management fees costs New Jersey’s pension funds $728 million in 2015 alone – an incredible $2 million a day. These excessive fees would have been better spent shoring up the pension funds rather than going into the pockets of Governor Christie’s banker friends.

Next, John will immediately freeze all corporate welfare, known as tax credits, until a full review and audit can be completed to ensure taxpayers are getting what they were promised in terms of job creation and economic growth. Over the past seven years, more than $7 billion has been given away.

It is time that Wall Street banks and multinational corporations stop getting taxpayer money in the form of tax breaks and incentives. Instead, we should use that funding to solve the massive structural financial problems, including the pension system liabilities, that Governor Christie will be leaving for his successor.

As governor, John Wisniewski will reinstate the estate tax and pass the millionaires’ tax. Both will be proposed within the first 100 days of his administration.

He will also end the Atlantic City takeover and freeze the $300 million State House renovation that has the potential to balloon to a $750 million taxpayer burden. These are necessary actions that must be taken if we are to fully fund all of the budget gaps, including the ever-growing unfunded pension liabilities.

And even more importantly, once we get the pensions fully funded, then we must make sustained and consistent payments to ensure that it stays fully funded by adopting a constitutional amendment to guarantee a long-term funding plan.

Workers should not suffer and lose their retirements. The state owes this money to these workers and we must honor our obligations to them. Health benefits and other cuts are absolutely not on the table. John believes that the quality of care public employees were promised when they started their jobs shouldn’t differ year-by-year due to chronic mismanagement on the state’s behalf.

In Fiscal Year 2018, the State budget anticipates State expenditures of approximately $3.3 billion for active employee and retiree health benefits.

If the next governor continues to follow Christie’s lead, health benefits will continue to dwindle. That’s why John has proposed a statewide single-payer program that would ultimately reduce healthcare costs by expanding the risk market and eliminating barriers to medical access before minor issues turn into chronic, more costly ones.

In 2013, Gerald Friedman, an economics professor at the University of Massachusetts at Amherst, found that “a single-payer plan would save the U.S. about $592 billion in 2015 with savings growing over time, largely by cutting administrative billing costs and reducing pharmaceutical prices.”  We can safely assume that New Jersey would receive a significant portion of the savings that would no longer need to be provided by the state.

In the short term, through collective bargaining, there needs to be some common sense benefit changes that can help reduce the costs for employees and government employers that don’t ultimately have a detrimental impact on the quality of health care. The rate of growth in health care costs is just too much, we must provide a realistic solution to help manage those costs.

One of John Wisniewski’s best examples of standing up for unions was his vote against S2937/A4133, which became Chapter 78, because he believed it to be unconstitutional and unfair. Under Chapter 78, public employees gave up their cost-of-living-adjustments (COLA) in return for higher contributions into the pension fund by both the state and employee. Later, Governor Christie reneged on that deal.

It is time for New Jersey to honor its obligation.

John will work to reduce the unfair cost of premium sharing for public employees and restore collective bargaining rights.