Is that principal thing even mathematically possible?
It is the story I'm told about his MIL.
There's a think tank called New Jersey Policy Priorities that does a lot of work on these issues. The budget situation there is a huge mess, and they just did a stupid thing where they finally raised the gas tax but also made other changes that actually make the overall situation worse.
I'll see if I can find some more specific things for you to read when I'm not on my phone.
Are you going to tell us every time you are on your phone so we'll stop reading them?
I don't see the problem with being a Democrat and thinking maybe public sector unions are not uniformly helpful in all cases. For example, the only public actions that I can recall our local police union undertaking are defending officers who beat a teenager who was standing outside his grandmother's house while holding a soda and trying to remove the requirement that they have to live in the city.
Maybe the NJ-specific will talk about the allegations concerning particular unions. I'd recommend a backgrounder on the public pension crisis in general, since the issues are the same everywhere. Here's a link to an older, still very valid analysis by Dean Baker:
One important factor in benefit costs is the high cost of US health care, and the unions have no role in this other than to demand that they not be cut off from the benefits everyone should have.
A "Jersey union" sounds like it's a euphemism along the lines of "California cheeseburger" or "Boston marriage".
I also have relatives whose biggest political hobbyhorse is how cushy public teacher's retirement plans are. They make like 3x as much as said teachers do.
Wait, what's a "California cheeseburger" besides something from In 'n Out or Umami Burger?
My relative that I'll have to deal with come Thanksgiving is my BIL, a "Libertarian" who as of the last communication I could stand to have on the matter was planning on voting Gary Johnson because Trump was so bad, but would really love to have voted for Ted Cruz.
Despite calling himself a Libertarian, he's really into LAW and ORDER (a former prison guard, he's worked himself up to a mid-level administrator in his state's prison system). Police can do no wrong. BLM is a an anti-white racist organization.
Ugh.
14: Huh. That is not a Simpsons moment that has stuck in my brain.
Is that principal thing even mathematically possible?
Of course not. Our retirement based off of three highest years instead of highest year but yeah, it's just not possible for every one of us to do a quick stint as a lieutenant to jack up the retirement salary.
trying to remove the requirement that they have to live in the city.
Might not be as much of an issue in your particular town but in general that's one of those ideas that gets implemented with 0 regard for the steep climb in cost of living that accompanies such a requirement.
16: Our particular case is weird beyond our low city cost of living (although still higher than in many suburbs). It wasn't a change from being able to live anywhere; restricting police residency to the city limits was a norm for a long time, but then a change in state law gave the union an opening to renegotiate that part of the contract. The city put the restriction to a referendum, which passed, although it wasn't clear if this was a right that municipalities (or even just 2nd class cities, meaning Pittsburgh) actually had. This seems to be the most recent ruling: a lower court ruled the restriction was illegal, than Commonwealth Court reverted that. But they're just the appeals court; the state Supreme Court has agreed to hear it but I can't find any indication they actually have.
As for other stuff our police union has done, it had a successful symbolic no-confidence vote in the police chief. Needless to say, there aren't good relations between the rank and file and the brass and mayor.
Sorry I can't provide more actual links, but NJPP looks good, especially if it's the state-level equivalent of CBPP.
I do think there needs to be some kind of reform to public sector employment if there's going to be long-term public satisfaction with government. So many people, including me, still have major negative experiences with its efficiency and good faith that it opens us up for yet another antigovernment backlash. In CA I perceive the discontent as still simmering with no good outlet. This is the case, I think, even if you subtract out the extent to which their comparative good treatment (benefits, protections, sometimes wages) is stuff that everyone deserves but the private sector snatched away.
And there's a vicious cycle where high-level public management is hostile to unions and treats their relationship as zero-sum rather than seeing potential mutual benefit, degrading the potential partnership (like how unions can bubble up safety or process concerns that management has a blind spot for); similarly, on the office level, management sees protections like arbitration as undermining their rightful authority, and half-ass the necessary processes in response.
I also have relatives whose biggest political hobbyhorse is how cushy public teacher's retirement plans are. They make like 3x as much as said teachers do.
Wait, are we related?
According to zillow you can get a 3B 2Ba 2700 sq ft house in Pittsburgh for 85K. I'm assuming that's in a terrible neighborhood?
Is there some way to separate the legal-defense-of-officers-who-shoot-people-for-the-fun-of-it function of police unions from the rest of what they do? That seems to be 90 to 99 percent of the objectionable stuff they do. Other than that they're basically benign just like other unions, as far as a barely-aware member of the public like me can tell, but every time they make higher-than-local news it's for stuff like that. Creates a few perverse incentives.
7: Demanding that unions be uniformly helpful in all cases is a high bar to clear.
Re: the OP, my first thought is, there might be some research out there on how many people collect two pensions. It's probably a small number. Likewise, numbers on how much of the actual budget of those institutions goes towards pensions for retired employees.
More generally, the whole country is going through a demographic crunch right now as Baby Boomers retire and a comparatively smaller amount of the population continue to work. But that's only visible or a matter of public interest in industries that haven't been outsourced, like education. There are a lot of things we can and should do to help with this problem, but just paying people less means that your high-strung aunt would just be on the street or in your spare bedroom for the rest of her life. Hard to say which is worse.
21: Not a great neighborhood, but not a terrible one. It might even be a house that needs a lot of repairs in an average neighborhood.
In 2000, Bobby Bonilla was released by the Mets, who still owed him $5.9 million for the season. The Mets owner decided it was better to make a huge profit by investing that money with Bernie Madoff, getting a 10% return on the investment, and negotiating a deferred payment plan such that Bonilla would get an 8% rate of interest by the time the bill came due. Bonilla started collecting $1.19 million dollar annual checks from the Mets in 2011, and will be collecting them through 2035. Bonilla will eventually collect almost $30 million.
Unfortunately, the Bernie Madoff investment didn't end up working out as planned. But the Mets are still paying Bonilla. Why? Because it was in the fucking contract.
So, when a school board is writing up a plan to pay their teachers, if they want to attract good ones, they have a couple of options. They could A) pay them a pretty nice salary or B) pay them a relatively low salary, invest some of what would be left over with Bernie Madoff public pension plans, and offer sweet deals for retirement. So, yeah, they work out pension deals that may seem a bit cushy, but there is a reason for that. And the reason for that is that they want to attract good teachers so they have good schools so that property values are maintained and so the tax base is maintained. Also, children are the future and we need to teach them well so they can lead the way.
So, that's the deal that gets struck. Shitty pay now, good pensions later. And that's ok. But whats not ok is to come back later and say "oh, our deal with Bernie Madoff didn't pay off, so we need to slash the pensions that we agreed to. Sorry!" They need to pay retired teachers what they are owed - what they have earned - and its the union's job to make sure that they do. Its the fucking contract.
24
Isn't it a big problem that a lot of pension funds project Bernie Madoff type returns from legit non-Bernie investments but don't get them? They often project returns that no one except Bernie are getting. It's just a way of kicking the true expense down the road to future taxpayers.
It's just a way of kicking the true expense down the road to future taxpayers.
Indeed it is, but the way the future tax payers tend to solve the problem is by cheating the teachers. Which may have always been part of the plan.
That's an especially big problem when you have a city that is at half of its peak population when the stock market goes plunk.
But yeah, 24 nails the situation. Perhaps BIL should be asked whether he thinks that companies should be able to change contract terms for everybody after the fact.
"Why are you taking my car? I paid it off!"
"Sorry, we need more money now, so we decided that you should have paid more money for it then."
Don't they usually try to change the pension plans for new employees as opposed to existing, but unretired ones. Because it's more fair and fucks over Millennials.
Don't they usually try to change the pension plans for new employees as opposed to existing, but unretired ones.
Of course. But I seem to vaguely recall the situation in Jersey was that they were faced with a case of defaulting on their municipal bonds vs. defaulting on pension payments, so they defaulted on pension payments because its better to upset teachers than Wall Street.
Which is bullshit, because when Wall Street lent money for municipal bonds, they accepted an interest rate that encompassed the risk of default, and incorporated the bonds into diversified portfolios as to blunt the damage of any defaults that did occur. Meanwhile, teachers holding pensions are stuck with a huge, undiversified risk that hinges on the trustworthiness of New Jersey politicians.
I like the analogy in 24, which of course is totally right, but saying "teacher's union's contracts are like Bobby Bonilla's contract" implies that "teachers are unproductive dinosaurs who get outrageously inane deferred compensation forever." I mean, I don't think that. Bobby B should take what he can get. But some might.
but saying "teacher's union's contracts are like Bobby Bonilla's contract" implies that "teachers are unproductive dinosaurs who get outrageously inane deferred compensation forever."
Well, obviously that's why analogies are banned. And it certainly frustrates the point further when you realize he was getting paid to not play for the Mets.
On the other hand, they made it to the World Series that year, so it can't be argued that he didn't do a great job of not playing for them.
33.last: Indeed, the Pirates of the early '90s made the repeated mistake of paying BB to play for them, and you can see how that worked out.
24 and 25 are exactly what's happened in a number of jurisdictions and it's an especially dick move in those jurisdictions where those pensioners aren't getting social security.
Just to clarify, Ladybird herself is not confused on the ethics of the situation.
Her brother would hypothetically respond to 24 and 25 by saying something like, "Well, the teachers got a deal that was too good to be true, and guess what, it wasn't. In an ideal world they'd get their pensions, but our taxes are already the highest in the nation, and we just can't afford the pensions."
So: what would it take, budget-wise, for New Jersey to pay out its pensions? Is it only "impossible" in the sense that it's unpalatable, or is it impossible in the go-bankrupt sense?
|| Y'all are doing a bang up job for LBJ, so I'm just going to sneak in and say that everyone in NYC is invited to my musical improv show tomorrow @ 5pm and drinks afterward (too far from Fresh Salt, alas).
Lemme know if you decide to come. mypseud at gee mail
|>
Y'all are doing a bang up job for LBJ
No they aren't and this is your wheelhouse! I need FACTS, folks.
Here you go, LBJ. This seems to have a lot of the same info but more of an emphasis on the disadvantages of switching to a defined-contribution system. Basically, NJ's benefits are actually quite modest compared to other states. The problem with the pension funds is that the state keeps refusing to fund them even though it totally could. NJ ranks last in the country for share of required contributions actually made. Unsurprisingly, Chris Christie took this bad situation and found a way to make it even worse.
Some specific numbers:
Pension benefits in New Jersey average $26,000. State employees receive $25,000 on average and local government employees about $16,000. Teacher pensions average $40,000.[1] While police and fire personnel receive higher average benefits, their benefits are inflated by comparison with other groups (both public and private) because New Jersey police and fire retirees do not receive Social Security. Correcting for this brings safety personnel average benefits down to $41,402.
"Well, the teachers got a deal that was too good to be true, and guess what, it wasn't. In an ideal world they'd get their pensions, but our taxes are already the highest in the nation, and we just can't afford the pensions."
"In an ideal world, we could pay what it takes to honor the agreement we made. But that's expensive, so we don't want to. Trump 2016!"
Teachers in Chicago don't receive Social Security either.
Yeah, the "public employees not receiving social security" bit is huge. A huge scam.
I think the appropriate word for what your brother wants New Jersey to be is "deadbeat."
37: We are guitar-fueled musical improv, celebrating all that is human & all that is people, creating a tangled web of original characters who think, feel, love, & sing! Are you human? Are you people?
That was deeply hurtful of you to deliberately exclude me!
Thanks, Teo! And all. I'm not really mad at you deadbeats.
Hey, I'm not a deadbeat. I pay my poorly-funded pension obligations!
Unsurprisingly, Chris Christie took this bad situation and found a way to make it even worse.
Christie also wants to put an end to fair and equitable school funding, by allocating the same amount of money per student across the board, across the state, regardless of the wealth or poverty of different school districts. Basically, he wants to take money away from lower-income urban school districts and "return" that money to its "rightful owners" in the suburbs (no, he doesn't state it quite that baldly, but he might as well). Never mind that the urban districts don't have the same property tax base, and therefore need more aid from the state. This he calls his Fairness Formula.
37: That is impressive!
43: It's a scam with multiple levels because they also don't pay SS taxes, nor do their employers.
And the reason for that is that they want to attract good teachers so they have good schools so that property values are maintained and so the tax base is maintained.
This sounds right.
But somewhat less cynically, I would add that for many NJers (though not for Chris Christie and his ilk), public education is still a valued social good (it's not just about the property values, in other words). I'm too lazy to google it, but in state-by-state comparisons that I've seen, NJ's public schools rank in the top 5 to top 10 for all sorts of indicators (high school graduation rates; money spent per pupil; and so on). These high rankings are obviously a function of the state's wealth, but I do think there is something of a state tradition (going back to 1875, but now under siege by Christie) of support for public education.
That said, NJ's property taxes really are insanely high, which makes it all too easy to whip up anti-urban resentment in the suburbs, which is precisely Chris Christie's strategy. And there is a significant racial/racist-resentment angle to all of this, of course. To return to the cynicism.
I kind of hate corrections officers unions, because their CA activism involved advocating for tougher sentencing. I also think that they push for policies which make prison management and rehabilitation worse.
I have mixed feelings about the value of incentivizing public sector employees with defined benefit pension plans.
1. If you worked in a job that earned you social security, they claw back benefits. So useful people who might want to work part time in their 60's are discouraged from doing it.
2. They're like bronze handcuffs. People who are burnt out, bitter, and have become horrible co-workers hang on because of the pension.
They need to pay retired teachers what they are owed - what they have earned - and its the union's job to make sure that they do. Its the fucking contract.
Fuck yes.
I don't see the problem with being a Democrat and thinking maybe public sector unions are not uniformly helpful in all cases.
Also, too.
Looking at state and local tax burden per capita, compared to the US as a whole, New Jersey has much higher property tax ($2,924/capita vs. $1,426), somewhat higher individual income tax ($1,257 vs. $983), but slightly lower sales tax ($915 vs. $1,007) and various excise taxes like gas/cigarettes ($460 vs. $517). That was in 2012.
Of course, NJ also has higher cost of living and a much better PCGDP than most of the rest of the country. The difference is less pronounced looking at higher-income states.
From this "Who pays?" breakdown by income quintiles, it looks like one big issue is that the top 1% pay much less in overall state taxes than anyone else - 7.1% after figuring in the federal deduction offset, whereas the lowest quintile pay 10.7% and the middle quintile pay 9.1%. Sales tax is very regressive, property tax moderately so, income tax doesn't reverse that sufficiently. Christie didn't cut taxes, but he apparently vetoed a lot of upper-income tax increases.
Christie didn't cut taxes, but he apparently vetoed a lot of upper-income tax increases.
Including one set of temporary increases that would have fully funded the pension funds, according to the links in 39.
And the gas tax deal I mentioned in 3 also includes a bunch of tax cuts, including full repeal of the estate tax.
I sort of like the mental image of rich people migrating to New Jersey to die.
54: Ah, I was reading this, which I guess predates that deal.
More on the gas tax deal, and the the financial backstory (including how the pension fund problem originated).
56: Yeah, the deal was just announced last week (at a surprise press conference shortly before 5 pm on Friday, no less).
And the gas tax deal I mentioned in 3 also includes a bunch of tax cuts, including full repeal of the estate tax.
The elimination of the estate tax is just a bunch of trumpery: stupid, but loudly self-congratulatory and Trump-inspired (or at least Trump-aligned) nonsense, presented as a "populist" measure, but which only serves the interests of the one percent.
As someone who grew up in the one-industry metropolitan area of Washington, DC, I remember lots of discussion and controversy about the Social Security issue with respect to public employee pensions. On the one hand a lot of employees liked not having pay SS because they were getting great pensions anyway, on the other hand a lot of private sector employees thought it was utterly unfair. My impression from my DC/MD/VA contacts is that most US government employees now are in defined contribution plans (no doubt someone can correct me on this if I'm wrong). Defined benefit plans are grandfathered in for some (and I do mean grandfathered).
I wish I had a clear fix on the moral calculus on this. What is the half-life of an economic promise in an economic environment where change is overwhelms comfortable expectations? I don't know. Is a home buyer who defaulted because the ROI for flipping a home suddenly tanked evil or just following the crowd? Is a government that overpromised in collusion with the employee unions partly or wholly at fault? How does this compare to reparations after WW1 (referencing the "Deluge" reading group)? Certainly if governments across the US start defaulting on their pension obligations it's going to just fuel the whole anti-government Trumpist neo-fascist neo-No Nothing movement.
The second link in 57 is particularly infuriating.
The elimination of the estate tax is just a bunch of trumpery: stupid, but loudly self-congratulatory and Trump-inspired (or at least Trump-aligned) nonsense, presented as a "populist" measure, but which only serves the interests of the one percent.
Also too, very expensive. The $619 million the estate tax brings in every year could go a long way toward paying for pension obligations.
There are bad problems with state/municipal pensions across the country. It's not (just) neoliberal scaremongering. In a bad recession, New Jersey could find itself insolvent, along with Illinois/Chicago, Kentucky, and others.
For some reason, lots of stupid games are allowed for public pensions that are correctly forbidden for private pensions. For example, public pensions calculate payments assuming the pension will enjoy a 7-8% rate of return, which can only be achieved with risky investments. Then they inevitably decline to fully fund the plan even under that generous assumption. Then when things start going bad, they start doing idiotic things like issuing "pension obligation" bonds at 4%, in exchange for cash that is theoretically invested at 8% but is, you know, stuff like Twitter stock that can go down.
Anyway, the whole underfunded pension thing really doesn't work in cities/states with declining populations in an era of microscopic interest rates and slow economic growth.
Sure, public workers deserve what they were promised. If everything goes sideways, they will bitterly blame citizens for not wanting to make them whole. But it's not fair for the citizens, either. A lot of them will have moved in too late to benefit from too-low taxes over the prior decades, while the voters who stuck them with the bill leave for Florida. And as services are defunded and taxes are increased to pay for pensions (that is, for past services), nothing stops more people from leaving sticking ever-fewer folks with the bill.
I guess what annoys me about people making arguments like your brother is that he's really hung up on who to blame (unions or public workers or politicians or the media or rich people or whatever). But this is a really hard and interesting problem to solve, and that's way more important than deciding the most evil party--right? There are so many variants of this problem in so many areas that it obviously goes beyond any union or politician or individual's actions. The rules are bad and the path of least resistance, for everyone involved, is underfunding pensions as long as possible. I'd try to get him turned on to actuarial debates on pension discount rates or something instead of union-bashing.
Probably what eventually needs to happen is for the pensions to be taken under Federal control. The Feds would borrow at low interest to cover short term pension obligations on the condition that states are held to a participate in an aggressive pension re-funding regime designed to eventually also pay back Federal taxpayers. But it would be difficult to have that work and make it not a be a bail-out that rewards states for misbehavior or somehow allows them weasel out by sticking the Federal government with the tab. Also, politically difficult.
63 is true enough in general, but New Jersey really is an example of exceptional mismanagement (again, per the second link in 57). As of the early 90s the pension funds were fully funded and fine, then Christie Todd Whitman decided to cut taxes and fill the budget hole by taking money out of them, and she and subsequent governors went on to borrow insane amounts of money through pension obligation bonds to balance the budget year after year while hardly putting any money back in the funds. Eventually the state supreme court ruled that this was all unconstitutional, but didn't invalidate the existing bonds. Just a huge mess all around. NJ is a wealthy state and could afford to fix this by raising taxes, but instead they're trying to cut a bunch of them.
Bill Barilko disappeared that summer
He was on a fishing trip
The last goal he ever scored
Won the Leafs the cup
They didn't win another till nineteen sixty two
The year he was discovered
I stole this from a hockey card
I keep tucked up under
My fifty-mission cap
This shit really matters in Canada, by the way.
So that is all; and the Leafs, well that just makes me laugh, because I've always been a Habs fan. The Montréal Canadiens, les Habitants, they knew how to skate, they knew how to play some hockey.
When people bring up this "public sector pensions" bullshit, I remind them of "the sanctity of contracts" during the financial crisis, and Richard Grasso's ridiculous payout from the NYSE, a TBTF publicly-regulated monoploy at the time. Of course, the list can go on and on and on....
But interestingly, these numbnuts never seem to remember these incidents. At which point, I conclude they're arguing in bad faith, and the conversation ends.
Frankly, with people too far away ideologically, I ban political conversation, full stop. Though, this year, I've just stopped talking to them until after the election, b/c I don't want to end up screaming at them for destroying my country.
Frankly, with people too far away ideologically, I ban political conversation, full stop.
Seems like a reasonable approach.
I have that agreement with my mother's boyfriend. Helpfully, he's Finnish so it's not like talking too much is ever a problem.
I thought they were enlightened and topless in Finland.
But they revert to darkness in winter I guess.