February 25, 2010
THE WAR ON THE PUBLIC SECTOR:
The Shape of Things to Come (Steve Forbes, 2/25/10, Forbes)
Newly minted Republican Governor Chris Christie, facing a fiscal disaster, is doing the unthinkable: slashing spending and pushing for tax cuts as a way to revive New Jersey's moribund economy.Posted by Orrin Judd at February 25, 2010 8:16 PM
Last month Christie told the Democrat-dominated legislature that he was impounding more than $2 billion of this year's budget. [...]
[T]he governor made it clear that ever more drastic surgery is needed in next year's budget, which he will submit this month. The howls will then be truly deafening.
School budgets will be hit hard as state aid is cut. But this dire situation will finally force school districts--under the ever more watchful eyes of tax-strapped parents--to cut bureaucratic bloat.
New Jersey's 566 cities and municipalities will also urgently do what they should have done years ago--consolidate services across municipal lines.
The biggest push will be on pensions. "Pensions and benefits are the major drivers of our spending increases at all levels of government--state, county, municipal and school board," the governor declared. "The special interests have already begun to scream their favorite word--which, coincidentally, is my 9-year-old son's favorite word when we are making him do something he knows is right but does not want to do--'unfair.' One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 toward his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments over his life and nearly $500,000 for health care benefits--a total of $3.8 million on a $120,000 investment. Is that fair?
"A retired teacher paid $62,000 toward her pension and nothing, yes nothing, for full family medical, dental and vision coverage over her entire career. What will we pay her? $1.4 million in pension benefits and another $215,000 in health care benefit premiums over her lifetime. Is it 'fair' for all of us and our children to have to pay for this excess?"