July 25, 2007

Welcome Aboard the Titanic: New Jersey’s Financial Morass.

Filed under: Uncategorized — Jim @ 10:29 pm

Remember when I told you in April that New Jersey faced UNFUNDED pension liabilities of $56 BILLION? People in the private sector go to jail for that kind of crap.

Now, we learn that, on top of the $56 BILLION in unfunded pension liabilities, New Jersey also faces $58 BILLION in liability for UNFUNDED medical benefits for current and retired state workers.

It seems that all the while the state has been promising state workers virtually free health care after retirement (which could happen as early as at age 55), it has not set aside any reserves to pay the health care tab, which in today’s dollars id $58 BILLION. The state stopped putting money in reserves for retiree medical benefits during Christine Whitman’s administration in 1994.

So let’s do the arithmetic, shall we? $56 BILLION plus 58 BILLION is, by my reckoning, $114 BILLION in money that the state has promised to pay and has ZERO dollars to pay it with.

So, how will the sorry assed taxpayers the State of New Jersey pay this money? According to the New York Times,

New Jersey officials say the state simply cannot afford to create a reserve at this time, given the debt. Instead they plan to pay each year’s retiree benefits out of revenues and work to control future costs. (emphasis mine).

Say what? Pay it out of revenues and work to control future costs? Excuse me while I convulse, sadly not with laughter.

Let’s translate the bullshit into English. The notion of paying a $114 BILLION shortfall out of “revenues” is comical, because the “revenues” (i.e. as a practical matter, taxes and state fees) may well not even cover the current budgeted expenses. As for trying to “control future costs,” don’t make me laugh! The most recent budget (at a time when the state already faced a massive deficit) called for an increase in state spending by something like 13%.

Hang on to your wallets, or consider looking into moving to Pennsylvania or Delaware.

While the Corzine administration has at least conceded the existence of the financial mess (previous administrations and the legislature have ignored it), the Governor hasn’t done much to help things. As noted, he increased state spending in the most recent budget, and his plan to have more retirees pay something toward their health premiums didn’t happen.

His idea for paying down this deficit centers around the selling or leasing of the New Jersey Turnpike, but he has postponed any further discussion of this political hot potato until after the November elections.;

If a business ran like this state does, it would be out of business, and, for not funding pension benefits, its owners might well land in federal prison.

It is positively sickening.

I believe that, when it comes to rotten and grossly incompetent state government, New Jersey is worse than Louisiana. And, speaking as someone who loves this state, despite all its faults, that is a damned shame.

Permit me a word to my fellow Garden Staters. Can we PLEASE put the partisan baloney aside for just a moment and admit to ourselves that every single one of our goddamned legislators is part of the problem? And, as such, every single goddamned one of them should be voted out of office.

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