The governor is calling for changes in the accounting used to track the state’s pension funds, but that may not be enough at this point to avert catastrophe. The changes, which would seem pretty simple (I’m not an accountant so maybe I’m wrong) and would bring the state in line with regular practices, should help give us a more complete picture of the problems we face.
And the problems are huge.
Douglas Love, an investment expert who monitors the retirement accounts as a member of the State Investment Council, said at a council meeting last month his independent analysis of the state’s pension debt puts the shortfall even higher — at $56 billion.
The problems date back to a revaluation of the pensions by Gov. Christie Whitman — and were exacerbated by Gov. Jim McGreevey’s own pension gimmicks.
Initially, the numbers held — but then came the “collapse of the stock market,” which “drained $22 billion from the funds.”
Lawmakers compounded the problem by using accounting gimmicks to skip required annual payments into the funds and to cover billions of dollars in additional costs from increased retirement benefits they granted to public employees.
“The fact is we have a huge hole,” Corzine said. “It has been created by failure to deal with this issue, frankly, for the better part of a decade.”
While Republicans are shouting for reforms on this, they were part of the problem in the first place and injecting politics at this time is only guaranteed to ensure that nothing will actually get done.
Essentially, this is a bipartisan problem that requires a bipartisan solution.
South Brunswick Post, The Cranbury Press
Blog of South Brunswick
The Cranbury Press Blog
E-mail me by clicking here
Hank Kalet 