Can we afford to fully fund the New Jersey Pension system? As of yesterday a New Jersey court judge ruled that Chris Christie failed to follow the laws of our state by not fully funding the State Workers Pension system. Of course Governor Christie has already stated that the state will appeal the ruling, the amount we are talking about is $1.57 billion. The total budget for the state for this year is $32.5 billion and if the state does have to pay out almost $2 billion, the big question will be what will have to be cut from the budget. And if nothing is cut what taxes will have to be raised or created to come up with this rather large sum of money.

Will the New Jersey Supreme Court rule in Christie’s favor or will chaos result in a shutdown of state services? The Democrats will most likely blame the Republicans and the Republicans in turn will accuse the Democrats for this mess. But, in truth this is a result of both political parties negligence and the unions not taking action to correct the situation in the beginning.

The law that Christie ignored is one he actually signed into law and with Superior Court Judge Mary Jacobson’s ruling that the governor’s cuts “substantially impaired” the contractual right to payments that were guaranteed to the state employees. The judge further states “Despite the inherently limiting consequences of creating contractual rights through statutory language, the New Jersey Legislature deliberately and unequivocally created contractual rights for public employees for seven years of increasing state payments to support the actuarial soundness of the pension funds and to remedy decades of underfunding.”

So it is very clear that both the Legislature and the Governor are at fault in the eyes of the New Jersey Superior Court. Can all the parties that are responsible for this mess forget their political differences and find a way out of this mess? Due to the fact that Christie might be running for President and the state Democratic Party wants to stop him at all costs. The outlook for a solution that will not involve disastrous consequences for the taxpayers of this state is not looking too good.

As the Governor has already stated he will appeal the court’s ruling, will the State Supreme Court rule in the state’s favor? Last June Judge Mary Jacobson ruled that “Christie could cut that year’s payment from $1.58 billion to $696 million because the revenue shortfall had created a fiscal emergency.”   Will the Supreme Court also see that by being forced to pay out $1.57 billion to the pension fund it would cause a fiscal emergency or can they do the unthinkable and cause the State of New Jersey to go bankrupt. Well in reality the state can not go bankrupt, but it would mean that state government would grind to a halt.

With this court ruling the unions will have to realize that they will come under the fiscal microscope. For example the New Jersey Education Association funded a campaign against Governor Christie reelection with the dues collected from their members, a “$130 million slush fund” as the governor called it. Can not the pension system be handed to the respective unions and they handle the pension funds instead of the state? The teachers union seems to have more money than they need to run the union and it would benefit their members to have them do so. Otherwise it looks like the pension fund will go broke in the near future.

I will further address this issue sometime in the near future after the Supreme Court of New Jersey makes its ruling.

I hope you will forgive me for publishing a New Jersey blog today, but the issue is very hot right now and I thought it best to write about it today.

That is my opinion- Jumpin Jersey Mike