Here is an interesting article from the NY Times on the free pass that NJ Gov. Corzine is proposing for Municipalities to be able to skip out on funding their Pension obligations for 2009.By DUNSTAN McNICHOL
In a preview of political battles to come over the state’s mounting fiscal problems, Republican lawmakers and labor union leaders are voicing opposition to Gov. Jon S. Corzine’s proposal to allow county and municipal governments to skip $584 million in pension fund payments in the coming year.
While Mr. Corzine said the move is necessary to avoid the prospect of big property-tax increases, Republicans are using the plan to seize the mantle of fiscal responsibility. Labor unions argue Mr. Corzine’s strategy will jeopardize their members’ benefits. The dispute over the pension fund contribution is just the beginning of the fights that lie ahead in Trenton this year as Mr. Corzine and lawmakers confront a shortfall in revenues that threatens their ability to finance many state services.
In a preview of political battles to come over the state’s mounting fiscal problems, Republican lawmakers and labor union leaders are voicing opposition to Gov. Jon S. Corzine’s proposal to allow county and municipal governments to skip $584 million in pension fund payments in the coming year.
While Mr. Corzine said the move is necessary to avoid the prospect of big property-tax increases, Republicans are using the plan to seize the mantle of fiscal responsibility. Labor unions argue Mr. Corzine’s strategy will jeopardize their members’ benefits. The dispute over the pension fund contribution is just the beginning of the fights that lie ahead in Trenton this year as Mr. Corzine and lawmakers confront a shortfall in revenues that threatens their ability to finance many state services.
“None of the choices are going to be good choices,” said Senator Barbara Buono, a Democrat from Middlesex County who is chairwoman of the Senate Budget and Appropriations Committee.
The pension fund for thousands of New Jersey teachers and government workers is now about $60 billion, after investments declined by 24.6 percent or about $21 billion through November, according to reports delivered to the State Investment Council.
About 700,000 retirees are counting on the fund to cover benefits that are scheduled to cost more than $118 billion over the next several decades. Governor Corzine said that letting local governments postpone $584 million in deposits they are scheduled to make into the fund this April would help head off double-digit property tax increases this coming year, a year in which residents are facing a crippling recession and Mr. Corzine is scheduled to stand for re-election.
Question: Should Municipalities like Hoboken get a free pass on paying their Pension obligations in 2009 or should they have to pay up even though that could mean additional property taxes on top of the 47% hike we already got on the municipal budget?
My fear is that this will only punt the issue into the future and further cripple local governments such as Hoboken that executed measures such as selling assets to plug budget gaps. How high will our debt service need to get before the voting public gets concerned? ◦
