For too long, politicians have ignored one of the major issues facing the state — the looming public pension crisis. In doing so, they completely underestimate the public’s knowledge and furor about the issue.
Every day, we’re hearing from residents at their door, on the phone, or at our Americans for Prosperity community center. Through hundreds of conversations, it is abundantly clear that the pension issue is one that crosses party lines.
Critically, New Jersey residents rightfully fear that taxpayers will bear the costs of providing these expensive benefits. When asked about various methods of paying for the pensions, taxpayers tell us that no matter the method used, taxes will be raised. And because of the increased tax burden, they’re making clear their real concern that saving will be more difficult, forcing some to delay their own retirement or even leave the state. (This may help explain why New Jersey has one of the highest out-migrations of any state.)
And New Jersey residents understand the economic inequity. We often hear some version of this statement: The state doesn’t contractually guarantee my retirement, so why should I be expected to guarantee the retirement of state workers?
That brings us to the disconnect between the taxpayers and the politicians. After attending several candidate forums, I have learned that office holders still treat the public as if they don’t understand the huge disparity between the overly generous pensions public employees receive and what the rest of us get. Moreover, they do not seem to understand the burden they are placing on taxpayers.
Most still talk of meeting the commitments to government workers as if taxpayers won’t mind working into their 70s while public employees retire decades earlier — as young as 42 for some safety officials. And while other public employees must work until age 62, they still retire earlier and get more than do most New Jersey taxpayers.
The political class appears woefully out of touch with the simmering resentment of New Jersey taxpayers. The already high outward migration will only worsen if taxes are raised, school funding is cut, or roads and bridges crumble while residents pay for the long, comfortable retirement of thousands of former public employees.
Still, for now the courts and jurisprudence are largely on the side of the government employees. The politicians made pension promises in citizens’ names. The courts will contend that we need to make good on those promises. Employees and their unions will argue that state workers performed their service in good faith believing they would receive the promised benefits.
So what is to be done, particularly if elected officials are not able to effectively address this issue?
The key is to negotiate a “new deal” allowing everyone to prosper while still providing a secure retirement for government workers. Other states are making impressive reforms. How? They bring in expert teams with skill in negotiating such settlements. These agreements are mutual, thus minimizing the possibility of litigation and satisfying most stakeholders.
For example, Arizona recently enacted major reforms to its two statewide public-safety pension systems, using an expert team from the Reason Foundation to forge bipartisan, union-supported policies that will put the beleaguered, underfunded systems on a sustainable path.
We could do the same in New Jersey.
Politicians should stop pretending voters do not fully understand the cost of meeting the promises they make. They need to stop claiming the state can meet those obligations without catastrophic consequences for taxpayers. We the taxpayers understand that without serious reform, those obligations will be met only by depriving schools or forcing citizens and business out with high taxes.
N.J. politicians should start talking about negotiating a pension reform agreement that will ultimately allow all of us to live and retire in comfort.
Frayda Levin, of Mountain Lakes in Morris County, is a co-founder of the Americans for Prosperity New Jersey chapter.