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Home Publications Blogs Beat the Press New Jersey Has a Pension Shortfall Equal to 0.3 Percent of Its GDP

New Jersey Has a Pension Shortfall Equal to 0.3 Percent of Its GDP

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Monday, 28 July 2014 07:06

The Washington Post told readers that New Jersey's public pension faces a shortfall of $40 billion. Just in case some readers aren't familiar with the size of New Jersey's economy over the next 30 years (the relevant period for pension planning), it will have a discounted state product of more than $12 trillion. This means that the shortfall is roughly equal to 0.3 percent of future GDP. This is considerably larger than the shortfall faced by most states.

Comments (6)Add Comment
Percentage of GDP loses meaning if you don't pay pension bills
written by Robert Salzberg, July 28, 2014 9:28
Percentage of state GDP is a nice measure but the real problem is New Jersey's history of skipping or cutting pension fund payments. Governor Christie skipped the pension payment his first year in office and despite bragging about a bill that mandated stepped up payments for pensions, Governor Christie is back to his old pension payment skipping games:

"But Christie, during a State House news conference, said New Jersey cannot afford to make the pension contributions he had agreed to when he signed a 2010 law mandating them for the next seven years. He is also asking lawmakers to authorize an additional $1.5 billion reduction in the state pension contribution for the fiscal year that begins July 1."

[url= http://www.northjersey.com/new...QhO43.dpuf
Attempt at working link for previous comment, and perspective
written by Robert Salzberg, July 28, 2014 9:34
If previous skipped and reduced payments to NJ pensions had been made. The NJ shortfall would be close to average for the states.

http://www.northjersey.com/new...-1.1019511
...
written by Ryan, July 28, 2014 10:15
Awwww, but this is a really big number in the service of good!
impact on taxes
written by tew, July 28, 2014 2:21
What is the shortfall in terms of state revenue? That's the question the taxpayers care about. How much more will they have to pay?
Chutzpah
written by Bart, July 28, 2014 4:24

Hmmm, we need a word that describes what's going on when you underfund pensions and then cut pension benefits due to underfunding.
Misdirection
written by John Parks, July 28, 2014 6:51
Consider the very real possibility that WaPo, based on their normal bent, could really care less about the dire straights of any peons of the public employee class.

Consider the article as one of many salvos to come that are designed to whittle away at the character of any politico that may deign to challenge the Clinton dynasty.

You can be assured that the Christie camp did not make a phone call to the WaPo suggesting the article.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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