SOURCE:
NEW YORK POSTURL:
http://nypost.com/2016/06/26/new-jerseys-pension-apocalypse-is-looming/by: Nicole Gelinas
If Chris Christie lands a spot in a Donald Trump White House, New Jersey residents won’t be sorry to see their governor go. Christie leaves his state in worse shape than when he found it 6 ¹/₂ years ago.
Christie and the legislature have to finish up the state budget this week (the fiscal year starts July 1). If you take a look at Jersey’s latest $34.8 billion budget proposal, you understand why Christie spent the past year as far away from Trenton as possible.
New Jersey’s in crisis — not your run-of-the-mill budget crisis where you cut spending here and raise taxes there, but a slow-motion death spiral. And this is during the eighth year of a national economic expansion, when the state should be doing well.
Consider: The state’s pension fund has only socked away 37.5 percent of the money it needs to pay its current and future retirees. This ratio is “among the worst in the country,” said Standard & Poor’s in March. That’s down from 42.5 percent the previous year, and “will continue to weaken,” the analysts said. New Jersey owes $144 billion in unfunded pension and health benefits —
more than four times the state budget.
Understand: New Jersey is one mild economic downturn from not being able to make payments to retirees, whether it wants to or not.
A recession could bring New Jersey to within three or four years of having no money in its pension fund — and still having to pay out the equivalent of half of its state budget every year in benefits.
Yet the state can’t even make a $2 billion payment into the pension fund this year — less than half of what it should be paying. Could it pay $16 billion annually, when its pension fund is
really broke?
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