Monday, February 22, 2010

New Jersey Taking Long Needed Steps In Pension Reform Battle

The New Jersey State Senate is pretty much decided that it will pass a common sense pension reform package. It has more than enough sponsors to pass as is.
The measures cap the unused sick days retiring employees can cash at $15,000; require public workers to contribute at least 1.5 percent of their salaries toward their health insurance costs; and bar part-time workers from enrolling in the pension system.

Public worker unions oppose the changes; municipalities applaud the reforms for their future cost savings.

The pension system is underfunded by about $34 billion and at risk of becoming insolvent.
While these changes would reduce pension costs going forward, it will not realize significant savings necessary to bring the costs in line with state revenues. Unions will continue to oppose any changes to the pension system, which is a cash cow that ran dry long ago. Requiring that public workers contribute 1.5% of their salaries towards health insurance costs is a nod in the right direction even as private companies usually require workers to devote 10% of their salaries to health insurance costs. There's a long way to go.

The rest of the measures are common sense adjustments that should have been considered and implemented long ago. That they are being done now shows just how far the state legislature has come in a short time since Gov. Christie took office with a message of demanding change on the pension mess. Let's hope that Christie and the legislature don't stop here and get to the crux of a bloated state budget and spending that remains out of control.

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