Chris Christie Cuts Payments to State Pension Funds Retroactively in Order to Balance Budget…NJ Still Manages to Subsidize the Private Sector to the Tune of $1.57 Billion

Chris_ChristieBY ELAINE MAGLIARO

A couple of weeks ago, Governor Chris Christie of New Jersey announced his plan to use more than $2.43 billion that had been earmarked for public worker pension funding to balance his state’s ailing budget. Salvador Rizzo of The Star-Ledger said that Christie’s plan “threatens to derail one of Christie’s signature accomplishments in Trenton: a major revision to replenish New Jersey’s strained pension fund over the long term.” Rizzo added that Christie’s plan “would solve an immediate crisis for the governor, who has to find more than $2 billion somewhere to cover budget shortfalls for the current and incoming fiscal years.” The New Jersey governor has ruled out other alternatives—such as “raising the state income tax or cutting funds for schools and Medicaid.” Maggie Haberman of Politico said that it was “a striking move by the Republican governor, who had championed a public employees’ pension fund reform deal that he struck in 2011.”

Writing for Salon on May 22nd, David Sirota said that Governor Christie “depicted the maneuver as a matter of financial necessity, as if he had no other choice but to effectively use New Jersey retirees’ money to balance the state’s books.” Sirota noted, however, that what was lost in the “noise about whether the governor is a true fiscal conservative was any discussion of the two choices his administration has made — choices that are at the root of the budget crisis.”

Sirota:

The first choice was Christie’s decision to spend enormous amounts of New Jersey taxpayer money on lavish subsidies to corporations. As the New York Times reported two years ago, “Christie has approved a record $1.57 billion in state tax breaks for dozens of New Jersey’s largest companies.” As if that largess wasn’t enough, the Newark Star-Ledger reported that in 2013, Christie signed legislation that “lifts limits on how much the state can give out in economic incentives to corporations and developers.”

The second choice was the Christie administration’s decision to invest so much of New Jersey’s pension fund in high-risk, high-fee investments. As Pensions and Investments magazine just reported, New Jersey now ranks second in the nation for public pension investments in hedge funds.

In a Pando Daily article published on May 27th, Sirota reiterated that Christie claimed he had no choice because “the money simply isn’t there.” Sirota said that teachers in New Jersey might find that “hard to swallow” considering that education technology and publishing company Pearson “continues to receive a huge taxpayer subsidy from New Jersey.” New Jersey’s deal with Pearson—enacted in 2012—“sees Christie’s state giving Pearson a multi-year subsidy of up to $82 million.” As Sirota put it, “Christie is taking money from public school teachers to ensure that he can continue to support a giant education publisher. That’s particularly galling for teachers because Pearson just so happens to be one of the driving forces behind the push for more standardized testing and other so-called education ‘reforms’ that many public school teachers and teachers’ unions vehemently oppose.”

In addition to the state money being given to Pearson, Christie officials “approved a $225 million subsidy for JP Morgan.”

According to Sirota, the corporate handouts and the estimated “$1.2 billion in Wall Street fees from Christie’s high-fee, high-risk pension investment strategy” helped to blow a $2.7 billion hole through New Jersey’s finances.” He added that the huge financial hole in the state’s budget “just so happens to be almost exactly the amount Christie is now borrowing from the pension fund to balance the budget.”

One might ask why the Christie administration is so generous with corporate subsidies when his state is experiencing such serious financial troubles. Well, we know that the governor of New Jersey has presidential aspirations. And as David Sirota noted in a Salon article, many of the subsidies “are going to companies that just so happen to be big donors to the Republican Governors Association, which Christie now chairs. Likewise, the pension investment fees enrich the Wall Street firms that typically bankroll presidential campaigns.” Sirota added that the companies receiving corporate subsidies and investment fees “have far more political campaign cash at their disposal than the public workers whose retirements could be jeopardized by Christie’s pension maneuver.”

But…who cares about the pensions of public workers these days?????

SOURCES

Chris Christie can’t afford to pay public teacher pensions… but still hands education megacorp $82m in subsidies (Pando Daily)

Chris Christie’s cynical, self-serving plan to protect the donor class: Don’t buy the governor’s claims he had to use pension funds to balance the state’s budget. Just follow the money (Salon)

Governor Christie reduces payment to state pension fund to make up for $800 million N.J. budget gap (Daily Kos)

Chris Christie to reduce pension payments to balance NJ budget (NJ.com)

Gov. Christie Retroactively Cuts State Pension Payment (NJ Spotlight)

Christie’s pension plan could trigger another downgrade, S&P warns (NJ.com)

Chris Christie slashes pay to pension funds (Politico)

CHRISTIE ADMINISTRATION ANNOUNCES SIGNIFICANT EXPANSION OF JPMORGAN CHASE (New Jersey Economic Development Authority)

 

This entry was posted in Campaign Finance, Conservatives, New Jersey, Politics, States, Wall Street and tagged , . Bookmark the permalink.

7 Responses to Chris Christie Cuts Payments to State Pension Funds Retroactively in Order to Balance Budget…NJ Still Manages to Subsidize the Private Sector to the Tune of $1.57 Billion

  1. Blouise says:

    The man is disgusting so no surprise he’d hurt pensioners. After all:

    MSNBC host Rachel Maddow expressed subtle disgust on Tuesday with the news that New Jersey Gov. Chris Christie’s (R) administration has apparently been giving away pieces of salvaged metal from the wreckage of the World Trade Center as part of a “political goodie bag” in his quest for endorsements. … “If you feel the need to hit pause and go take a shower to rid yourself of the feeling you are feeling right now, I understand,” Maddow said. “I’m probably on DVR, so just hit pause.”

    If you haven’t already seen this clip, please watch the whole thing and then you will understand how Chris Christie could easily sell out pensioners.

    http://story270.rssing.com/browser.php?indx=20729584&item=110

  2. Mike Spindell says:

    Chris Christie is a fatter version of Rudy Giuliani, but equally as corrupt and loathsome.

  3. eniobob says:

    FYI:

    ” A state judge will decide whether Gov. Chris Christie can save his ailing budgets by taking $2.4 billion meant for public-workers’ pensions — and the case will go down to the wire, with a ruling expected just days before the deadline to enact a spending plan.

    Superior Court Judge Mary Jacobson on Thursday agreed to hear a lawsuit brought by State Police troopers, who are decrying Christie’s proposal to reduce payments as an illegal “pension holiday” and charging that the governor “intends to rob Peter to pay Paul.”

    With less than a month left to sew up New Jersey’s budget, Jacobson’s decision — which may wind up in the state Supreme Court — could upend Christie’s plans as well as the high-stakes budget negotiations going on in the Statehouse. A hearing will be held June 25 in Trenton, Jacobson said, five days before Christie’s deadline to sign a new budget.”

    http://www.nj.com/politics/index.ssf/2014/06/showdown_in_the_courts_state_police_troopers_challenge_christies_pension_cuts.html

  4. eniobob says:

    Every one likes the W** moment.

    ” Of all the positions he has held, from starting catcher on the Livingston High School baseball team, to U.S. attorney for New Jersey, to governor of the Garden State, Chris Christie has said the role of parent is the one he cares most about.

    So it could be said that the father of four reached a kind of pinnacle today, when he was officially crowned one of the nation’s Fathers of the Year by the Father’s Day/Mother’s Day Council.

    Christie and four other recipients accepted the award before a crowd of about 500 friends, family and others at the New York Hilton in midtown Manhattan, with equal parts humor, humility and pride. Like all the fellow recipients he spoke to before the awards luncheon, Christie said he was surprised by the award, because recognition is not the reason anyone becomes a parent.”

    http://www.nj.com/politics/index.ssf/2014/06/gov_chris_christie_elected_father_of_the_year_by_national_fathersmothers_day_group.html

  5. Pingback: Screwing the Middle Class Further: Wall Street Wants Your Pension Money | Flowers For Socrates

  6. Elaine M. says:

    Blouise and eniobob,

    Thanks for the links!

  7. Pingback: Stateside New Jersey: The State Paid Fees to Mary Pat Christie’s Firm After State Investment Was Terminated | Flowers For Socrates

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