Tag: New Jersey

Treasury Rescue Won’t Bail Out Chicago, New Jersey From Debt

Mary Pat Campbell

Link: https://news.yahoo.com/treasury-lifeline-won-t-bail-190632365.html

Excerpt:

(Bloomberg) — The U.S. Treasury Department is sending a message to states and cities that the billions in aid from the American Rescue Plan should provide relief to residents, not their governments’ debt burdens.

The department on Monday released guidance on how state and local governments can use $350 billion in funding from President Joe Biden’s $1.9 trillion rescue package. The funds are intended to help states and local governments make up for lost revenue, curb the pandemic, bolster economic recoveries, and support industries hit by Covid-19 restrictions. In a surprise to some, these funds can’t be used for debt payments, a potential complication for fiscally stressed governments that had already etched out plans to pay off loans.

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Illinois Governor J.B. Pritzker had suggested using some of the state’s $8.1 billion in aid to repay the outstanding $3.2 billion in debt from the Federal Reserve’s emergency lending facility and to reduce unpaid bills. Illinois was the only state to borrow from the Fed last year, tapping it twice. On Tuesday, Jordan Abudayyeh, a Pritzker spokesperson, said the administration is “seeking clarification” from the Treasury on whether Illinois can use the aid to pay back the loan from the Fed.

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The rule could also affect New Jersey, which sold nearly $3.7 billion of bonds last year to cover its shortfall during the pandemic. Assembly Republican Leader Jon Bramnick, a Republican, in April had called for Governor Phil Murphy, a Democrat, to use some of the federal aid to pay down the state’s debt.

Author(s): Shruti Date Singh, Amanda Albright

Publication Date: 11 May 2021

Publication Site: Yahoo Finance

N.J. teachers need to be told the truth: Their pensions are in jeopardy | Opinion

Mary Pat Campbell

Link: https://www.nj.com/opinion/2021/05/nj-teachers-need-to-be-told-the-truth-their-pensions-are-in-jeopardy-opinion.html

Excerpt:

The very notable exception is New Jersey’s Teachers’ Pension and Annuity Fund (TPAF), which is by far the single-worst public pension in the Brookings study. TPAF is New Jersey’s largest public pension fund and covers all active and retired teachers. New Jersey’s Public Employees Retirement System (PERS), the pension plan for state and municipal workers, is second-worst but not nearly in the dire predicament of TPAF.

This is what Brookings had to say about TPAF: Under any of their investment return scenarios, TPAF is in “near-term trouble” — meaning near-term insolvency. Brookings projects that TPAF will run out of assets in 12-to-15 years, at which point the $4.5 billion-plus in benefits payments will have to be made from the New Jersey’s perpetually strained state budget. This would be a fiscal disaster for New Jersey and a retirement crisis for TPAF’s 262,000 beneficiaries.

Author(s): Mike Lilley

Publication Date: 5 May 2021

Publication Site: NJ.com

What NJ Tells Creditors On Benefits

Mary Pat Campbell
What NJ Tells Creditors On Benefits

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Excerpt:

According to the EMMA website New Jersey borrowed another $400 million last week for which they had to provide an Official Statement which included 20 pages on the situation with public pensions and benefits. Excerpts follow.

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The contribution of the Lottery Enterprise is valued as of June 30, 2020 at $12.569 billion, based on a 30-year straight line amortization. However, the first reevaluation of the value of the Lottery Enterprise required by LECA has not yet been performed. If the contribution of the Lottery Enterprise were not taken into consideration in calculating the funded ratio of the Pension Plans, the funded ratio of the Pension Plans as of June 30, 2020 would have been 37.6% instead of 49.8%. (page I-60)

Author(s): John Bury

Publication Date: 3 May 2021

Publication Site: Burypensions

Treasury reveals pension fund still holds stake in gunmaker

Mary Pat Campbell
Treasury reveals pension fund still holds stake in gunmaker

Excerpt:

New Jersey’s public-worker pension fund continues to own a small stake in a company that manufacturers firearms, several years after Gov. Phil Murphy and lawmakers first raised concerns about public investments in the gun industry.

As of earlier this month, the pension fund owned shares worth an estimated $28 million in a company that, among other products, specializes in making custom sporting shotguns and rifles, according to the latest information provided by the Department of Treasury.

However, the overall $85 billion worker-pension fund has cut ties in recent years with a manufacturer of firearms ammunition, which had been its only other direct link to the firearms industry, Treasury officials confirmed.

Author(s): John Reitmeyer

Publication Date: 26 April 2021

Publication Site: NJ Spotlight News

Op-ed: New Jersey’s fiscal mess might lead to statewide property tax. You’re forewarned, Illinois

Mary Pat Campbell

Link: https://www.chicagotribune.com/opinion/commentary/ct-prem-opinion-edit-fixing-illinois-chicago-budget-new-jersey-tax-20210423-a7dxpc5g4nhkrjgfbyzkrzvjxy-story.html

Excerpt:

Connecticut has opened the door for a statewide property tax that has no upper limit. It offers a “new” tax revenue source for states such as New Jersey that have failed to address their structural deficits and continue to live beyond their means. Many New Jersey homeowners refer to their local property tax bills as a second mortgage, since the burden often rivals or exceeds the monthly payments on their home purchase.

A review of New Jersey’s modern history of taxes shows citizens should rightly be concerned.

Our state enacted a personal income tax in 1976 to support public schools and provide property tax relief. The tax began with a simple two-rate structure consisting of a 2.0% rate on income below $20,000 and a 2.5% rate on income above $20,000. In 45 years, 8 brackets have been introduced without any substantive update to account for inflation, making this more burdensome over time. The only meaningful change has been to establish a new top rate of 10.75%, the 3rd highest in the nation.

Author(s): REGINA M. EGEA

Publication Date: 23 April 2021

Publication Site: Chicago Tribune

NJ Taxpayers To Be Byrned Again

Mary Pat Campbell
NJ Taxpayers To Be Byrned Again

Excerpt:

The state income tax eventually failed to stem the rise in the highest property taxes in the country since it was based on providing money to hundreds of de facto fiefdoms with no oversight. Ms. Egea goes on to speculate that Governor Murphy, with an even more pressing need for revenue, has another new tax in mind:

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In 1976, New Jersey voters passed a constitutional amendment that dedicated the entire income tax to the Property Tax Relief Fund and lower property taxes in 1997 did help Brendan Byrne get reelected. There is no time for that this year so expect the massive debt and structural budget deficit to be the excuse for this new tax that should be hitting in 2022.

Author(s): John Bury

Publication Date: 26 April 2021

Publication Site: Burypensions

The Heroic Congressional Fight to Save the Rich

Mary Pat Campbell

Link: https://taibbi.substack.com/p/the-heroic-congressional-fight-to

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Excerpt:

However, the SALT cap didn’t so much go after “Democrats” as “affluent Democrats.” It only applied to people who itemize their taxes, which meant the 90% of Americans who take the standard deduction were unaffected. The deduction raised over $70 billion in just the first year, and roughly 56% of that money came just from the top 1% of taxpayers, living in a few states in particular.

The tax nastygram seemed directed at Trump’s hometown delegation. Congresswoman Carolyn Maloney in April of 2017 complained about the cost of protecting “Trump and his family here in NYC”; the SALT cap affected 19% of Maloney’s constituents in Brooklyn and on the Upper East Side, and taxpayers in that 19% each lost an average of $100,405 in breaks. Chuck Schumer, one of Trump’s fiercest critics, personally took over $58,000 in SALT deductions just in 2016.

Overall, 39 of the 40 districts most affected by the SALT cap were represented by Democrats. Of those, 28 came from New York, New Jersey, and Connecticut. Also affected: Nancy Pelosi’s San Francisco district, where residents lost an average of $53,471 of write-offs. Trump’s campaign promises to take on “elites” proved phony, except when he was able to effect this targeted partisan strike at the people he knew and hated the most: rich, socially liberal Democrats, especially ones from the tri-state area.

Author(s): Matt Taibbi

Publication Date: 23 April 2021

Publication Site: TK News at substack

NJ Pension CAFR

Mary Pat Campbell
NJ Pension CAFR

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Excerpt:

The Comprehensive Audited Financial Statement Report (CAFR) for the State of New Jersey, Division of Pensions and Benefits, as of June 30, 2020 appeared on the state website this month which means the actuarial reports should be out soon.

But, for now, some CAFR excerpts:

Financial Highlights Fiduciary Funds –Pension Trust Funds and Other Postemployment Benefit (OPEB) Plan (page 3)

Fiduciary net position decreased by $2.4 billion as a result of this year’s operations from $87.3 billion to $84.9 billion.

Additions for the year are $10.2 billion, which are comprised of member, employer, nonemployer, and employer specific and other pension contributions of $8.9 billion and net investment income of $1.3 billion.

Deductions for the year are $12.7 billion, which are comprised of benefits, refund payments, and transfers of $12.6 billion and administrative expenses of $62.0 million.

Author(s): John Bury

Publication Date: 21 April 2021

Publication Site: Burypensions

NJ Localities Meeting Pension Obligations

Mary Pat Campbell
NJ Localities Meeting Pension Obligations

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Excerpt:

I am researching what counties been paying into the New Jersey Retirement System for their Public Employees (PERS) and Police and Fire Personnel (PFRS) since Union County has been budgeting more than they were billed but the 2021 budgets for 7 of the 21 counties are not out yet so that project is on hold.

But in going over the history of what Union County has been sending to PERS and PFRS since 2005 (which presumably would be in line with other localities) there have been some politically motivated swings but, bottom line, Union County’s ‘fair share’ is now defined as 25 times more than what it was in 2005 for PERS and 8 times more for PFRS.

Author(s): John Bury

Publication Date: 20 April 2021

Publication Site: Burypensions

NJ Pension Palaver

Mary Pat Campbell
NJ Pension Palaver

Excerpt:

Public employees and their unions are certainly to blame for allowing promises made to not be fully funded,

Those contributions that public employees make are negotiated at levels they have input into (nothing to do with funding benefits honestly); and

What worthwhile programs for New Jerseyans did those tens of billions of dollars in missed payments fund and, if that money was invested wisely, shouldn’t New Jerseyans be reaping some benefits around now? If the money was not invested wisely then why begrudge not having more of it to waste?

Author(s): John Bury

Publication Date: 11 April 2021

Publication Site: Burypensions

Corporate Dems Show Progressives How To Play Hardball

Mary Pat Campbell

Link: https://www.dailyposter.com/p/corporate-dems-show-progressives

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Excerpt:

As The Daily Poster reported back in January, congressional Democrats in states like New York and New Jersey have been pushing for a repeal of the SALT deduction caps. Biden declined to include the SALT cap repeal in the American Rescue Plan. 

If the SALT cap was fully repealed, nearly all — 96 percent — of the tax benefits would flow to the top quintile of earners, and more than half of the benefits would go to the top 1 percent of earners, according to data from the Brookings Institution. Congress’s Joint Committee on Taxation found that the majority of the benefits of a SALT cap repeal would flow to households earning more than $1 million.

Author(s): David Sirota, Andrew Perez

Publication Date: 31 March 2021

Publication Site: The Daily Poster

NJ Local Pension Bills

Mary Pat Campbell
NJ Local Pension Bills

Excerpt:

Annual pension contributions from local employers in New Jersey come due next week based on the June 30, 2019 actuarial valuations. The state website only has the breakdown in pdf format but it was easy enough to export the numbers into excel for the PERS and PFRS plans.

Many local employers are also drafting their 2021 budgets so it was interesting to see what one of them (Union County) allocated as pensions costs for 2021.

Author(s): John Bury

Publication Date: 25 March 2021

Publication Site: Burypensions