Tag: New Jersey

Municipal Budgets 2021 (4) Pension Contributions

Mary Pat Campbell

Link:https://burypensions.wordpress.com/2021/11/17/municipal-budgets-2021-4-pension-contributions/

Graphic:

Excerpt:

Over at countywatchers I have a series comparing 2021 budget items for the municipalities in Union County and part 4 relates to this blog so here it is.

Comparing pension records to 2021 budget allocations that municipalities in Union County made for their contributions to the New Jersey Public Employees Retirement System (PERS) and Police and Firemen’s Retirement System (PFRS) shows that, on average, PERS and PFRS contributions made up 8.17% of total budgets, representing $170 per resident. The average contribution as a percentage of a participant’s salary came to 25.03% with $19,942 as the average contribution per participant.

Author(s): John Bury

Publication Date: 17 Nov 2021

Publication Site: burypensions

Look out for Zombie States – not only on Halloween

Mary Pat Campbell
Link:https://www.truthinaccounting.org/news/detail/look-out-for-zombie-states-not-only-on-halloween

Video:

Excerpt:

We call it the “Zombie Index” based on the work of Edward Kane, a prolific and respected finance professor at Boston College. Back in 1985 and 1989, Ed wrote two books warning about taxpayer exposure to losses from bank deposit insurance schemes, before we knew what hit us in the savings and loan crisis. Ed coined the term “zombie bank” to identify effectively-insolvent banks that were allowed to remain open by regulators and others. Deceptive accounting principles greased the wheels for regulatory forbearance, making “zombies” appear to be solvent. 

Zombies had incentives, in Ed’s terms, to “gamble for resurrection.” Insiders could capture the upside of riskier investments, while prospective losses could be socialized through the government’s sponsorship (and ultimately, bailout) of deposit insurance systems. These incentives ended up magnifying taxpayer losses during the 1980s deposit insurance crisis. Those losses ran in the hundreds of billions of dollars and helped set the stage for the massive financial crisis of 2008-2009.

Author(s): Bill Bergman

Publication Date: 25 Oct 2021

Publication Site: Truth in Accounting

NJ Sustaining Corruption

Mary Pat Campbell
NJ Sustaining Corruption




Graphic:

gsi-3.jpg (1027×311)

Excerpt:

The Garden State Initiative released a report on the state of New Jersey finances. You have heard it all before but what keeps being left out of these ivory tower pronouncements is the systemic corruption at all levels and in all corners of officialdom here that makes even the slightest improvement in our general fiscal situation a pipe dream.
Here are some excerpts along with a few charts on the pension system, the last of which makes my point.
…..
Focus on that last chart. Liabilities actually decreased over the last two years. Significantly decreased against all logic and reason. Did everybody take a pay cut? Did 30% of plan participants disappear? No. The actuaries just got told to lower liability values and like dutiful apparatchiks they complied.

Author(s): John Bury
Publication Date: 22 Sept 2021
Publication Site: Burypensions

GSI REPORT: TOWARD A FISCALLY SUSTAINABLE NEW JERSEY: ANALYSIS & RECOMMENDATIONS

Mary Pat Campbell

Link: https://www.gardenstateinitiative.org/updates/sustainability

Full report: https://static1.squarespace.com/static/5956385fe4fcb5606a4d46ac/t/613f51e3dae757528286a93a/1631539687957/GS-1438_Fiscally_Sustainable_Final_01.pdf

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Excerpt:

NJ’s revenue is being produced by higher rates on a smaller tax base: New Jersey needs to ensure that the outmigration of high-income residents does not continue. Between 2008 and 2017, New Jersey experienced growth in the number of tax filers of 4.2%; however, growth in those making $500,000 or more annually was only 2.5% during the same time.

NJ’s public spending is growing faster than inflation, our population or job creation:  Our state will continue to see specific needs increase, especially in public health, health insurance, and public safety. New Jersey already taxes residents and businesses more than most other states. The problem is not too little revenue; rather, it is that the state’s spending is growing at a faster pace than inflation and the state’s population

The cost of NJ’s public workforce retirement and healthcare is the key driver of escalating spending and taxes: What New Jersey owes employees and retirees is growing significantly faster than the underlying economy that must support this liability. This is not sustainable. Pension liabilities are growing faster than assets

Author(s): Thad Calabrese, Thomas Healey

Publication Date: 22 Sept 2021

Publication Site: Garden State Initiative

Tax Me, I’m From New Jersey

Mary Pat Campbell

Link: https://www.wsj.com/articles/regressive-tax-new-jersey-salt-cap-reconciliation-2017-cuts-and-jobs-act-aoc-biden-11632167030

Excerpt:

I am no billionaire. But like Mr. Buffett, I am willing to take one for the team. So as Democrats in Congress come under pressure to roll back the $10,000 cap on the federal tax deduction for state and local taxes, or SALT, this long-suffering resident of New Jersey offers his own Buffett-like message:

Don’t do it. Make me and people like me — those who choose to live in high-tax states — pay our full, fair share of federal taxes.

Such an approach accords well with what Mr. Biden has been saying about taxes and the wealthy. In his most recent remarks about his Build Back Better plan, the president said he’s “tired” of the rich not paying their “fair share.” And he attacked the 2017 tax cuts passed under Donald Trump as a “giant giveaway to the largest corporations and the top 1%.”

But that’s exactly who would benefit most from any expansion of the SALT deduction. According to the Tax Policy Center, 57% of the benefits of eliminating the cap on the SALT deduction would go to the top 1% of filers. The same researchers likewise reckon that the top 1% would get an average tax cut of more than $35,000 — against just $37 for middle-class taxpayers.

Author(s): William McGurn

Publication Date: 20 Sept 2021

Publication Site: WSJ

States Divest Unilever Stock Over Ben & Jerry’s Boycott

Mary Pat Campbell

Link: https://www.ai-cio.com/news/states-divest-unilever-stock-over-ben-jerrys-boycott/

Excerpt:

State treasurers in New Jersey and Arizona are divesting approximately $325 million in investments from consumer goods giant Unilever after subsidiary Ben & Jerry said it will stop selling its ice cream in Israeli-occupied territories.

In July, the company said in a statement that it was “inconsistent with our values for Ben & Jerry’s ice cream to be sold in the Occupied Palestinian Territory.” It said it has informed the licensee that manufacturers the ice cream in the region that it will not renew its license when it expires at the end of 2022. Despite leaving the Palestinian territories, Ben & Jerry’s said it will stay in Israel through a different arrangement that has not yet been determined.

A New Jersey law enacted in 2016 requires state pension funds to withdraw investments from any company that boycotts the goods, products, or businesses of Israel or companies operating in Israel or territories occupied by Israel. The law requires the state to create a blacklist of companies that boycott Israel.

Author(s): Michael Katz

Publication Date: 20 Sept 2021

Publication Site: ai-CIO

New Jersey set to shed $182 million Unilever assets over Ben & Jerry’s boycott

Mary Pat Campbell

Link: https://uk.news.yahoo.com/jersey-set-shed-182-million-225836260.html

Excerpt:

A New Jersey state treasury official said on Wednesday it is set to divest $182 million in Unilever Plc stock and bonds held by its pension funds over the restriction of sales by the consumer giant’s Ben & Jerry’s ice cream brand in Israeli-occupied Palestinian territories.

It is the latest action by a U.S. state challenging Unilever over Ben & Jerry’s move in July to end a license for its ice cream to be sold in the Israeli-occupied West Bank. Ben & Jerry’s said selling its products there was “inconsistent with its values.”

New Jersey’s Division of Investment had said on Tuesday it made a preliminary determination that maintaining its investment in Unilever would be a breach of a state law barring it from investing in companies boycotting Israel. It gave the company 90 days to request a modification of the order.

Author(s): Ross Kerber

Publication Date: 15 Sept 2021

Publication Site: Yahoo News

Treasurer Muoio Announces New Jersey Has Paid the Full State-Funded Portion of the Pension Contribution for the First Time in More than 25 Years

Mary Pat Campbell

Link: https://www.state.nj.us/treasury/news/2021/07012021.shtml

Excerpt:

State Treasurer Elizabeth Maher Muoio announced that the Treasury Department today kicked off the start of the new fiscal year by paying the full state-funded portion of the $6.9 billion pension contribution slated for Fiscal Year 2022 (FY 2022). This marks the first time in more than 25 years that New Jersey is making the full Actuarially Determined Contribution to the Pension Fund, plus an additional $505 million contribution, and also the first time in years that the state has made a lump sum payment, rather than quarterly payments.

The Treasurer also announced that by making the contribution in one lump sum, the State is now expected to save taxpayers roughly $2.2 billion over 30 years, rather than the $1.5 billion in savings initially anticipated if the state had made quarterly pension payments this year.

Publication Date: 1 July 2021

Publication Site: Dept of the Treasury, New Jersey state

Most New Jerseyans Are Fiscal Dullards

Mary Pat Campbell
Most New Jerseyans Are Fiscal Dullards

Excerpt:

That is what the Murphy administration has to believe for them to send out this piece of gripka:

….

treating $10.19 billion in Biden relief money as if it will never have to be repaid (one way or another).

Keep in mind when reading just this one excerpt below that $6.9 billion represents about six months worth of payments out of a pension system that is still accruing benefits at record levels and as of June 30, 2020 reported unfunded liabilities under GASB of $128 billion.

Author(s): John Bury

Publication Date: 2 July 2021

Publication Site: Burypensions

Restoring Politician Pension Pork

Mary Pat Campbell
Restoring Politician Pension Pork

Excerpt:

Jobs as judges, prosecutors, and municipal business administrators are the crock of gold at the end of a politician’s rainbow here and with bailouts, unlimited debt, and an apathetic tax base ripe for plucking politicians have an opportunity to sweeten the pots. According to politicoNJ that is exactly what they are planning on doing with five bills (one already enacted).

A4313: transfers Administrative Law Judges from the Defined Contribution Retirement Program to the Public Employees’ Retirement System. The Office of Legislative Services (OLS) estimates that this bill will lead to annual State cost increases resulting from the transfer of Administrative Law Judges from the Defined Contribution Retirement Program to the Public Employees’ Retirement System. The first-year cost could approximate $2million.In subsequent fiscal years, the annual State cost will grow as a function of increases in judges’ salaries and other economic factors. The bill may also make Administrative Law Judges eligible for healthcare benefit sat retirement that are not available in the Defined Contribution Retirement Program.

….

S3197: Clarifies eligibility for deferred retirement for certain judges in JRS. PoliticoNJ guessed at who could benefit:

The bill appears to have been written with Middlesex County Prosecutor Yolanda Ciccone in mind, as she otherwise would have to leave the prosecutor’s position when she reaches the mandatory judicial retirement age of 70 in 2024 in order to collect her judicial pension. It also could potentially apply to Judge William Daniel, whom Murphy nominated last week as the next Union County prosecutor.

Author(s): John Bury

Publication Date: 19 June 2021

Publication Site: burypensions

How Stupid are Credit Rating Agencies?

Mary Pat Campbell
How Stupid are Credit Rating Agencies?

Excerpt:

Yes, unfunded liabilities as of June 30, 2020 are “more than $60 billion”. Much more ($128 billion under GASB68 and and $94 billion using understated valuation liabilities). But, setting that aside , how is Sweeney planning on reducing that massive debt?

Simple: lower pension payments…..

Clearly, we need to do everything we can to cut the cost of our annual pension payments at both the state and local levels in order to continue to guarantee the retirement payments our retirees have earned and to reduce the unfunded liability that is such a burden to taxpayers.

That is why we have developed legislation to enable our state and local pension systems to add revenue-generating assets like water and sewage treatment systems, High Occupancy Toll (HOT) lanes, parking facilities and real estate to provide new, diversified sources of revenue for their investment portfolios.

Author(s): John Bury

Publication Date: 17 June 2021

Publication Site: Burypensions

NJ PFRS Asset Move

Mary Pat Campbell
NJ PFRS Asset Move

Graphic:

Excerpt:

The New Jersey Police and Firemen’s Retirement System (PFRS) was supposed to get their assets to invest three years ago but the process seems only to be starting now with an RFQ for Class Counsel that the PFRS board sent out yesterday.

Here is how much is involved.

From the latest Division of Investment report there is about $89 billion to split up.

From the latest actuarial reports for the system PFRS is allocated about one-third of the market value of assets:

Author(s): John Bury

Publication Date: 15 June 2021

Publication Site: Burypensions