New Jersey Governor Chris Christie said he doesn’t mind breaking promises to pensioners to close a $10.5 billion budget deficit -- even if they sue.
“I have bigger issues than who sues me,” said Christie, 48, a Republican and former federal prosecutor who wants to end cost-of-living increases for retirees. “Get in line.”
Public workers in Colorado, South Dakota and Minnesota are already suing their states, which are among 18 that want to pare pension costs by increasing employee contributions, raising the retirement age or curbing cost-of-living increases.
“We believe it’s unconstitutional,” said Gary Justus, 63, a retired mathematics teacher in the Denver public schools who’s a plaintiff in the Colorado suit. “These are contracts that I and 100,000 other retirees worked for.”
U.S. cities, counties and states face a $3.6 trillion gap between their pension assets and what they’ve promised retirees, according to a study by Robert Novy-Marx of the University of Rochester and Joshua Rauh at Northwestern University. States must also contend with $140 billion of budget deficits next fiscal year, according to the Center on Budget and Policy Priorities, a Washington research group.
Pressured to cut spending and not raise taxes, public officials are focusing on pensions, said Ron Snell, senior fellow at the National Conference of State Legislatures. State plans cover 24 million active and retired workers, according to the Denver-based organization, about 8 percent of the U.S. population of 309 million in 2010.
Christie, saying New Jersey’s retirement benefits are “wildly out of proportion with the private sector,” proposed eliminating automatic cost-of-living increases last year. The state has also stopped paying into its pensions.
Borrowing for Pensions
Illinois lawmakers lowered retirement benefits for new workers last year. The state will borrow $3.7 billion this month for its fiscal 2011 contribution, the second consecutive year it sold bonds to make payments.
States have exhausted “more palatable” actions such as cutting staff and expenses, Fitch Ratings said Jan. 25 in a report giving a negative outlook to the state-debt sector. They face the “most difficult” fiscal year since the U.S. recession began in December 2007, Fitch said, as federal stimulus payments end....more
“I have bigger issues than who sues me,” said Christie, 48, a Republican and former federal prosecutor who wants to end cost-of-living increases for retirees. “Get in line.”
Public workers in Colorado, South Dakota and Minnesota are already suing their states, which are among 18 that want to pare pension costs by increasing employee contributions, raising the retirement age or curbing cost-of-living increases.
“We believe it’s unconstitutional,” said Gary Justus, 63, a retired mathematics teacher in the Denver public schools who’s a plaintiff in the Colorado suit. “These are contracts that I and 100,000 other retirees worked for.”
U.S. cities, counties and states face a $3.6 trillion gap between their pension assets and what they’ve promised retirees, according to a study by Robert Novy-Marx of the University of Rochester and Joshua Rauh at Northwestern University. States must also contend with $140 billion of budget deficits next fiscal year, according to the Center on Budget and Policy Priorities, a Washington research group.
Pressured to cut spending and not raise taxes, public officials are focusing on pensions, said Ron Snell, senior fellow at the National Conference of State Legislatures. State plans cover 24 million active and retired workers, according to the Denver-based organization, about 8 percent of the U.S. population of 309 million in 2010.
Christie, saying New Jersey’s retirement benefits are “wildly out of proportion with the private sector,” proposed eliminating automatic cost-of-living increases last year. The state has also stopped paying into its pensions.
Borrowing for Pensions
Illinois lawmakers lowered retirement benefits for new workers last year. The state will borrow $3.7 billion this month for its fiscal 2011 contribution, the second consecutive year it sold bonds to make payments.
States have exhausted “more palatable” actions such as cutting staff and expenses, Fitch Ratings said Jan. 25 in a report giving a negative outlook to the state-debt sector. They face the “most difficult” fiscal year since the U.S. recession began in December 2007, Fitch said, as federal stimulus payments end....more
