Steinhauer: Pension costs not “exploding”

Employees doing their part, state must too

Published on Tuesday, February 25, 2014

NJ StatehouseGov. Christie uses today’s budget address to decry “exploding” pension costs and make the case for “additional reforms” beyond the drastic changes made in 2011 which, according to the Governor, will save state and local governments $122 billion by 2041.  He also announced another year of school funding below levels mandated by the school funding formula as well as a small grant program for districts wishing to experiment with a longer school day or year.

NJEA president Wendell Steinhauer issued the following statement in response to the budget address:

“Governor Christie is doing the right thing by making the full, legally required pension payment this year.  But he is doing the wrong thing by misleading New Jersey residents about the state of the pension system.

“Pension costs are not ‘exploding.’  As a result of deep, painful cuts absorbed by public employees and retirees in 2011, pension costs going forward have been curtailed, and the state is finally on the road to responsible, sustainable pension funding practices.  It’s not easy, but it’s necessary and it’s legally required.

“While the consequences of the 2011 law were severe, immediate, and continue to grow for public employees, the state was allowed to phase in its required contributions very slowly over 7 years.  Those contributions are not ‘exploding.’  They are growing at precisely the rate that actuaries said they would when the law was signed.  Governor Christie knew then, and he knows now, that the state is paying largely for its past failures to fund the pension promises it made. 

“Public employees are already paying dearly for that failure.  Since 2011, they have been paying significantly more to receive significantly less in order to save the state and local governments $122 billion.  That represents a tremendous sacrifice by public employees, retirees and their families. The state must continue to share the burden and share the pain of returning to fiscal responsibility.

“The state must also be more responsible in meeting its obligations to students.  For the fourth consecutive year, Gov. Christie is refusing to fund schools according to the school funding formula.  Instead of a pittance per child, much of which will be used to pay for new state-mandated standardized testing, schools need a real increase that will allow them to maintain and expand their educational offerings.

“Gov. Christie’s more-than-$2 billion gamble on corporate tax giveaways has not paid off in job growth or economic recovery for working class New Jersey residents.  Instead of short-changing students and retirees again, it’s time to cut our losses, end the corporate tax breaks and invest New Jersey’s resources in New Jersey’s people.

“NJEA is pleased to see the Governor acknowledge that his plan to extend the school day and school year will be costly for districts.  We urge that if the Legislature approves the proposed innovation grant fund, it should be used only to fund genuine pilot programs, run by public school districts, that can be observed over at least three years and with a requirement that an independent educational researcher measure and interpret the results to see if the investment was worthwhile.

“NJEA stands behind its original offer to work cooperatively with the Department of Education to ensure that any such program is designed to meet the needs of students and the community where it is tested.”

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