New Jersey's main newspaper, the Star-Ledger, often runs editorials trying to convince us that the huge pension deficits can't be fixed without dismantling the whole system and starting fresh. All options to do this create great sacrifices by hard working servants of the people who were promised a decent pension in exchange for lower daily wages than the private sector is paid for comparable work. That's been the deal.
What makes this relevant beyond New Jersey's boarders is that public employee pension systems and public sector unions are under similar financial assaults in almost every state. It is a pattern so powerful that it has to be part of a bigger plan. It's a plan that eliminates our pension as powerful institutional investor and turn us into chum for the sharks on Wall Street.
"Taxing the rich won't solve pension problems" claims the Star-Ledger in its editorial. Their point is that the "millionaire's tax" vetoed by Gov. Christie wouldn't plug the current pension gap.
This is true, but the larger point is that the "un-taxing" of the rich and the wealthiest companies in New Jersey is the real reason we have a crisis. Stack up all the tax money not collected due to corporate tax breaks and tax cuts given away since the Whitman administration until now and it would tower over the cash it would have taken to pay pension obligations from the beginning.
Money is fungible. Whenever tax revenue is deleted from the budget, someone's ox has to be gored. For decades that ox belonged to State employees. Their pensions is part their wage package and the reason their overall compensation is roughly parallel with the private sector. Not funding it was a deliberate choice.
Another fact hidden in plain view is that revenue deleted from the budget doesn't have a line item to remind us of what's missing. We end up blindly subsidizing profitable corporations instead of properly compensating ordinary folks who work for us.
It's disingenuous for politicians (or the Star-Ledger) to speak of pension reform without also discussing the massive tax breaks that created this crisis. If tax cuts for businesses and people who don't need it were rescinded, there would be plenty of revenue to fund the pensions.
NOTE: If this is happening in your state, or if you are from New Jersey and want to do something about the pension mess, feel free to use this letter as a template for your own letter to the editor or your representatives..