Pensions, Politics, and the New Jersey Education Association

Like many states, New Jersey is in the middle of a severe pension crisis. Nationwide, a recent Pew Charitable Trust study estimates that state-run retirement systems currently have more than $1 trillion in unfunded pension liabilities, but New Jersey’s problems are among the worst. Yet the New Jersey Education Association (NJEA) wanted to freeze New Jersey’s failed pension system by passing a constitutional amendment that would obligate the state to fund its massive liabilities without any reform and regardless of the fiscal consequences to the state.

When NJ Senator Stephen Sweeney dared to defy the NJEA in 2016 by refusing to have a vote on the amendment until he could pass it in a fiscally prudent way, the NJEA threatened to withhold political contributions to Democrats statewide until the amendment was passed. The NJEA has since run anti-Sweeney ads and held public protests where it vowed political revenge. True to Powell’s words, the NJEA is once again using its political muscle for its own special interests and trying to stick New Jersey taxpayers with the bill.

The total amount of the state’s unfunded pension liabilities is $95 billion ($160 billion if health benefits are included); the entire state budget is $35 billion. Passing the amendment without any reform would condemn the state and its citizens to a bleak future.

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