Tag Archives: Jersey City

Bold Signs in New Jersey

In the past week, New Jersey’s newly-elected Governor Chris Christie  made two strong choices. The first was to propose cutting back on “Extraordinary Aid” and “Special Aid”  to municipalities. These programs haven’t helped end fiscal distress in municipalities, but have more likely subsidized ongoing mismanagement. The Governor was overruled by the legislature which today voted to approve $121 million in aid to Camden, Paterson, Jersey City, Union City, and Bridgeton. Governor Christie may still rescind the aid when he proposes the budget in March.

Another bold policy sign is the Governor’s nomination of former Jersey City Mayor Bret Schundler to be education commissioner.

Here he recounts his role at the forefront of the charter school movement in New Jersey.  PolitickerNJ.com calls it a “gutsy pick.” Mr. Schundler says he’s open to working with the New Jersey Educational Association. Whether he gets the job will is yet to be determined. State Senator Nicholas Sacco plans to “wait and see” what Mr. Schundler’s vision is for education before making a judgement.

Pension Crisis Continues

The Financial Times writes:

The 2,600 [American state and local government] pension plans provide retirement savings for 22m public employees in towns and cities across the US, and range in size from the giant Calpers, with $120bn (€91bn, £81bn) in assets, to tiny small town funds which pay pensions for local garbage collectors and police.

[…]

State pension benefits are protected by law, and must be paid even if the fund is making a loss. Calpers, the largest fund, has lost $70bn in value in the past eight months, but still has to pay $11bn in benefits this year. Unless the fund starts recouping its losses soon, the California state government, which is already mired in a huge deficit, will have to lift contributions to Calpers starting from next year.

The FT goes on to note that US pension plans are in worse shape than those in Europe.

This is because American pension funds are more underfunded. That gets back to policy decisions made over the years. Couple that with the worst economic downturn in decades, and policy makers are left with tough choices: cut benefits, increase the size of contributions, or merge plans.

Places with pension funds that are less than 50 percent funded include Philadelphia, West Virginia, Pittsburg, Providence, Little Rock, Jersey City, Wilmington, Deleware, and Atlanta.