I have lived in New Jersey my entire life. I can only blame my parents for the first 18 years of my existence in this state. Beyond that is no one’s fault but my own. I mention this because NJ ranks LAST among all 50 states for their current fiscal condition. People and businesses are migrating to other parts of this country to get away from this fiscal mess, but here I remain. Please help me!!
When I have opportunities to speak at conferences around the U.S. I often mention my fate, but there are many others living in states that have similar situations to NJ, such as Illinois, California, Connecticut, etc., so I really don’t get much sympathy. Why mention this today? Well, back in 2018, state Senate President Steve Sweeney put together a commission to explore solutions to NJ’s fiscal woes. The commission put together legislation that went before the Senate last May calling for a hybrid pension solution, but nothing happened as the bill sat in the senate (sounds eerily familiar to what transpired with the Butch Lewis Act and the U.S. Senate). Shocking!
In addition to the legislation to create a hybrid plan, there was a bill introduced that would have created a New Jersey economic and fiscal policy review commission to “provide ongoing review of state and local tax structure, economic conditions, and related fiscal issues,” including employee retirement matters, according to a bill summary. But alas, Governor Murphy vetoed the proposed legislation without explanation. Is this another example of don’t ask, don’t tell?
Not only does NJ have ridiculously high property taxes, but the state income and sales taxes create a melange of real pain for residents. Couple this burden with the gaping financial hole within the NJ pension system (estimated at about $80 billion) and you have a formula for disaster. I give Sweeney and his commission credit for trying to do something before it is too late. As anyone knows who reads these blogs, I am a huge fan of DB plans, but NJ’s may not be salvageable. In that case, exploring a hybrid solution is certainly more appropriate than thrusting NJ’s public employees into a defined contribution vehicle.
When are we going to get real leadership willing to put aside political differences to tackle real problems facing our residents? Everyone can’t live in Florida and Texas, but it sure seems like the thing to do these days! I’ve always teased my family about wanting to live on a ranch in Montana. That is getting to be more attractive every day!