New Jersey's Financial Disaster: The Greed of New Jersey State Employees

The Wall Street Journal reports:

The slow economy is hurting state tax revenues around the country. But look on the bright side: You could live in New Jersey, where decades of tax and spend politics is reaching its logical conclusion.

"We have a serious structural financial problem," the state's liberal Democratic Governor Jon Corzine told us on a recent visit. "You better address these problems or you will put yourself in a 1970s-style New York City situation, where you get a control board telling you what to do." Mr. Corzine is promoting his own solution, but he's also tacitly admitting that the state's politicians have been sucking the place dry for decades. If you want to know where a state dominated by public-employee unions ends up, Trenton is it.


Mr. Corzine spent 25 years at Goldman Sachs and is fluent with numbers, most of them harrowing if you're a New Jersey taxpayer. In 1990 the state was $3 billion in debt. Borrowing has since grown at a compound annual rate of about 13%, and now the state is $32 billion in the red. Throw in unfunded pensions and health benefits for retirees, and that number swells to $113 billion, or $3,400 for every man, woman and child in the state. That's three times per capita higher than the national average, making New Jersey the nation's fourth-most indebted state.

Public workers and teachers can retire at age 55 after 25 years with a pension of 60% of salary -- indexed to inflation. Police and firefighters can retire at 65% of salary at any age after 25 years of service and 70% after 30 years. With such generous benefits, you might think funding pensions would be a priority. Ah, no. Last summer the state disclosed it had used accounting tricks to skip more than $7 billion in pension payments over 15 years. That money went to current spending to buy votes.

No corporation on the New York Stock Exchange could get away with this.You understand now why government workers are "politically active",who else can overpay you and let you retire off of people who pay taxes? The people vs. the powerful.