Developments this week out of two public pension hot-spots each have good-news and bad-news elements to them.
The good news: policymakers are working to find creative solutions to intractable problems.
The bad news: There’s a one word response to the solutions they’re finding: Really?
In New Jersey, Gov. Chris Christie plans to take the roughly $1 billion per year in lottery revenue from a variety of state social service programs and public education, and use it to pay down the state’s massive pension liability. This would reduce the current contribution from the state’s budget from $2.5 billion to about $1.5 billion.
And what about the massive hole this blasts in the programs the have until now been funded by lottery revenues?
“(State Treasurer Ford) Scudder said that money would now come from the state’s general or property tax relief fund.
“There will be absolutely no negative impact to that funding,” Scudder said.
And if you believe that one, we’ve got a traffic-choked, lane-closed bridge across the Hudson River we’d like to sell you.
In Chicago, where pension woes may be even greater then Jersey’s, Chicago Public Schools owes its Teachers Pension Fund a whopping $715.9 million on June 30. CPS doesn’t have that much loose change lying around. In fact it has a $129 million hole in its budget. So it will reduce that amount by $250 million. A new property tax levy is supposed to make up the difference, “in July or August.”
Either way, taxpayers are footing this enormous bill, which does nothing to plug the ungodly $9.6 billion unfunded liability. Pensions devour 13 percent of the CPS budget.
Given the three-card monty aspect of New Jersey’s lottery scheme, and the finger-in-the-dike quality of Chicago’s leave us breathlessly anticipating what Colorado PERA’s board will come in with in the wake of its highly touted “listening tour” currently underway.
Speaking of which, we’ll be attending the Monday tour stop in Denver. Check back here for a detailed accounting of that event.