Pension Crisis a ‘Direct Consequence’ of Union Bosses’ ‘Enormous Political Power’


For years, New Jersey Gov. Chris Christie has sought to rein in out-of-control public spending in his state while leaving government union bosses' monopoly-bargaining privileges essentially unchanged. It's now clearer than ever that it can't be done. Image: Chip Somodevilla/Getty Images
For years, New Jersey Gov. Chris Christie has sought to rein in out-of-control public spending in his state while leaving government union bosses’ monopoly-bargaining privileges essentially unchanged. It’s now clearer than ever before that it can’t be done. Image: Chip Somodevilla/Getty Images

In a commentary for the New York Post published late last week, American Enterprise Institute adjunct scholar Mike Lilley, tersely describes the horrendous fiscal crisis in which the Garden State finds itself:

New Jersey has a severe pension crisis: Its unfunded pension liabilities are $95 billion. The state’s retiree health-care obligations add another $65 billion, for a total of $160 billion in unfunded liabilities (and this does not include another $40 billion for local government pensions). The entire state budget is $35 billion. New Jersey simply doesn’t have the money to pay for these pensions.

(See the link below to read the whole op-ed.)

How did elected officials and their appointees allow unfunded liablities to accumulate until they were nearly five times as great as the annual state budget?

Lilley contends, with ample evidence to back him up, that this “pension crisis” is a “direct consequnce” of New Jessey Education Association (NJEA/NEA) union officials’ “enormous political power.”

He estimates that, from 1995 to 2015, NJEA kingpins poured $802 million into cash pay and salaries for union staff members working full-time as political campaign “volunteers,” so-called “Uniserv” political professionals who run Big Labor get-out-the-vote drives, PR, and other electioneering and ideological projects. Given their compulsory unionism-derived ability to spend “over $40 million a year” on on “political tools,” it’s not surprising NJEA bosses have generally gotten what they wanted on pensions.

The minority of unionized employees who are employed in New Jersey public schools for 20 years or more have, so far, gotten a sweet pension deal. Gov. Chris Christie credibly claims that, over 30-year career, the average employee “contributes $195,000” to his or her pension and “gets back $2.6 million in benefit.”

This is, of course, a rotten deal for New Jersey taxpayers. The majority of teachers who are employed in the state’s public schools for a total of less than 20 years also fare poorly under the pension regime their union bosses have procured.  And NJEA union bosses have been able to get away with it primarily because state law grants them monopoly power to negotiate over employees’ wages and benefits with public officials.

For decades, NJEA chieftains have opposed any significant reducation in the extraordinarily high pension benefits mandated under the contract for employees who spend all or nearly all of their careers working in the state’s public schools, but they have rarely even tried to get public officials to set aside enough funds to pay for such pensions. Now they are making no bones about the fact that they want to stick taxpayers with the entire $95 billion bill for “enshrining this bankrupt pension system in stone . . . .”

Finding a viable solution to the Garden State’s horrible public-spending fix won’t be easy under any circumstances, but it will almost surely remain impossible as long as government union bosses retain monopoly-bargaining and forced-dues privileges over teachers and other public servant. New Jersey elected officials in both parties, including Gov. Christie, a Republican, have long resisted consideration of measures to roll back monopolistic government unionism. But by now it should be obvious to them that, given the continued intransigence of Big Labor bosses and the gravity of the fiscal woes the state faces, they have no other choice.

How teachers unions drive Jersey’s pension crisis