Browsing this Thread:
2 Anonymous Users
|
Re: Not a matter of semantics
|
||||
|---|---|---|---|---|
|
Home away from home
 
|
What's more likely, the state pension not being honored or your taxes going up?
I think they'll be just fine.
Posted on: 2009/12/16 23:17
|
|||
|
||||
|
Re: Not a matter of semantics
|
||||
|---|---|---|---|---|
|
Home away from home
Joined:
2008/10/19 1:18 Last Login : 2020/9/25 20:40 From somewhere else
Group:
Registered Users
Posts:
1609
 |
Quote:
Agreed that the defined benefit system is a huge problem, but it's not the current issue. That is even simpler: whether or not to forgo funding a contractual obligation and by not funding, incur a substantial interest burden that significantly exacerbates the city's very tenuous financial footing. The contract is the contract. Whether or not the terms of the contract should be what they are is another issue.
Posted on: 2009/12/16 22:55
|
|||
|
||||
|
Not a matter of semantics
|
||||
|---|---|---|---|---|
|
Just can't stay away
 
Joined:
2004/3/11 23:46 Last Login : 2011/10/29 16:00 From Hamilton Park
Group:
Registered Users
Posts:
150
|
At the risk of oversimplification, here is the problem reduced to a nutshell:
"State mandated defined benefit plans (with fixed formula payouts largely determined by one's length of service and average pay during one's final years of employment) are financially and demographically unsustainable." These payments are bleeding the taxpayers dry. The system needs to be reformed at the top. Even the Federal Government converted over most of their defined benefit plans to defined contribution plans in the 1980s! Why NJ is stuck in the past is a testament to financial waste and inefficiency. All the best. Geoff
Posted on: 2009/12/16 22:44
|
|||
|
||||
|
Re: a matter of semantics
|
||||
|---|---|---|---|---|
|
Home away from home
|
Quote:
I don't think I said that contributions to pension plans are similar to payments into IRAs b/c they're voluntary. All I meant to say was that they're both vehicles for saving for the future, and a pension is supposed to be safer b/c the benefit is guaranteed (as you note). In the case of an un/underfunded plan, this may not end up being the case and the worker would be better off choosing a job that offers more current benefits instead of potentially illusory future benefits. Quote: Quote: I think you misunderstood what I meant by "modeling" - all I meant was that the mathematical models for calculating the future value of an annuity are well understood and there are many computer programs that quickly and easily do the calculations, even when there are a lot of variables. I think we agree that it's correctly guesstimating the variables like interest rate and, as you point out, the target value based on life span, that is hard. Spreading the payments over more years doesn't really make the model any more complex, it just makes the consequences of mistakes greater. Quote: Quote: I agree - and I didn't mean to suggest that interest rate is the only variable of interest, just that it's an easy one to manipulate for political reasons. You're right that not adjusting for increasing life expectancy has been another major factor in pension plans running out of money. Thanks for such an interesting conversation, @LifeOfRiley! (Makes me feel like I'm back in grad school.)
Posted on: 2009/12/16 22:08
|
|||
|
||||
|
Re: a matter of semantics
|
||||
|---|---|---|---|---|
|
Just can't stay away
|
Quote:
You are fully correct except for making it analogous with an IRA. With an IRA or for that matter a 403b, or 401K, you truly make *voluntary* contributions to a retirement plan that makes no guarantee what the value or payout will be when you retire. With a defined benefit plan, like the public employee's pension, it is predetermined, e.g. a defined benefit, what the payments in and equally important what the payout will be. Quote: And you're right that it's tricky to project the future value of current payments - not because it's difficult to model the effects of compound interest, but because there's a lot of political pressure to make bad assumptions. Political pressure is definitely a big component, but "modeling the effects of compound interest" is most definitely tricky. I did such for many years professional as a pension actuary. For instance, in the most simplest terms, on day one of employment, you know what the pension plan *commitment* is when you retire. Right from the start of your retirement until the time you kick the bucket, on average that's going to be a 60 year commitment/contractual obligation. Financial instrument commitments, like bonds typically last only 30 years. Quote:
That's one factor, but the most costly component, by far, is how life expectancy has increased steadily over the past 1/2 century. Collecting a pension that pays until death after only 20 years of service is exceptionally costly. Life expectancy matters more than investment return. If you want some idea of such, go to an insurance agent and tell them you want to purchase a deferred life annuity that meets the same as a public employee pension or even similar and less costly criteria like no joint survivor ship option, i.e. make payments for 20 years and start collecting in your 40s. I'd be willing to be you a beer, the monthly premium payment will exceed your rent of mortgage payment.
Posted on: 2009/12/16 20:08
|
|||
|
||||
|
Re: a matter of semantics
|
||||
|---|---|---|---|---|
|
Home away from home
|
Quote:
I see what you're saying - since the workers salaries come from public funds then the source of all payments into their pension plan is ultimately the public. The point I was making is that these workers are being told that their 5.5% payments are being put away for their future (as if they were contributing to an IRA but better b/c the govt is guaranteeing the return). With an unfunded (or underfunded) plan, this is not true - their money is being used to pay benefits today (or maybe tomorrow). As the value of the plan erodes, people are no longer willing to trade off today's earnings for future payments. And you're right that it's tricky to project the future value of current payments - not because it's difficult to model the effects of compound interest, but because there's a lot of political pressure to make bad assumptions. In NJ's case, government based expected returns to its pension savings on boom-time interest rates when it would have been much better to make more conservative assumptions. (The reason there's pressure to do this is that it reduces the amount govt. needs to pay in today to get the same amount out in the future.) Falling interest rates have now coupled with diminishing revenue streams going into the system as government defers payment to choke the pension fund. Ultimately, I think it's likely that government will follow private industry and move away from defined benefit plans toward defined contribution plans (shifting the risks of poor returns on investment to the employees). Of course, they'll still ultimately have to deal with the pension promises they've already made and you're right that it will probably take both higher tax revenues and spending cuts to fill the void.
Posted on: 2009/12/16 18:41
|
|||
|
||||
|
a matter of semantics
|
||||
|---|---|---|---|---|
|
Just can't stay away
|
You are correct as well as the originally poster about the younger workers potentially getting screwed when they reitre.
However, since it's not a voluntary payment and they are public workers, fundamentally, they are not paying for it. Rather it is coming out of the tax payer funded budget of the employer to fund a (post retirement) defined benefit. In practical terms, the employer has decided to pay you less today (salary) in lieu of paying you (in retirement). An alternative would have been to either raise taxes or freeze/ cut public employee salaries to continue to properly fund the pension. Obviously that's not a popular decision. If the public fully understood how difficult it is to project the future, decades away coupled with how much it costs to fund an individual worker's pension who works 20 years and then collects on average retirement benefits 40 years there after, one would be quite shocked. It will only get more costly as life expectancy continues to increase. Think about that, really. Contribute and save for 20 years, at today's value of a dollar, with the expectation that you will be able to live comfortably (e.g. account for inflation) for another 40 years on that savings.
Posted on: 2009/12/16 17:59
|
|||
|
||||
|
Re: wrong channel. here's the remote
|
||||
|---|---|---|---|---|
|
Home away from home
|
Quote:
Actually, workers almost always also make contributions (in pre-tax dollars) to their pension plans and, as Senate majority leader Sweeney notes in the Inquirer Trenton Bureau article of 12/15/2009 (posted above), NJ municipal employees have continued to make 100% of their required payments even as the govt. has deferred its.
Posted on: 2009/12/16 17:10
|
|||
|
||||
|
wrong channel. here's the remote
|
||||
|---|---|---|---|---|
|
Just can't stay away
|
Quote:
Their employer is making the contribution to the pension or in this case deferring payment.
Posted on: 2009/12/16 16:53
|
|||
|
||||
|
Re: Council moves to defer $14.8 million in pension payments
|
||||
|---|---|---|---|---|
|
Home away from home
|
I actually feel kind of sorry for the younger JC employees who are paying into the pension system (and who have no choice but to make 100% of their contribution since it's automatically deducted from their pay) since their money is largely being used to pay current retirees and they're unlikely to ever see pension payments themselves. Because at some point, the city is going to have to admit that an unfunded pension plan is no pension plan and drop it entirely.
Of course, when I actually interact with some of the younger JC employees (I'm talking to you, Parking Authority), I feel slightly less sorry for them...
Posted on: 2009/12/16 16:14
|
|||
|
||||
|
Re: Council moves to defer $14.8 million in pension payments
|
||||
|---|---|---|---|---|
|
Home away from home
Joined:
2007/11/28 3:26 Last Login : 2014/10/27 13:13 From The fog.
Group:
Registered Users
Posts:
1013
|
Maybe if they keep putting off the payments they will someday magically disappear.
This is like constantly using credit cards and, instead of paying them off, shifting the balances to a different card each month.
Posted on: 2009/12/16 15:48
|
|||
|
||||
|
Re: Bill would let N.J. towns put off pension payments - Jersey City has specifically sought this re
|
||||
|---|---|---|---|---|
|
Home away from home
|
HEALY PLAN: DEFER MORE PENSION $$
Wednesday, December 16, 2009 By MELISSA HAYES JOURNAL STAFF WRITER Jersey City officials are hoping to again defer state pension payments to help balance the city's budget. State Sen. Sandra B. Cunningham and Assemblywoman Joan Quigley, both of Jersey City, recently introduced legislation that would allow municipalities to defer up to 50 percent of their state pension contributions for a second year in a row. The legislation was introduced at the request of Jersey City Mayor Jerramiah T. Healy, both women said. "This is a difficult bill. It's difficult for me to do it, to be honest," Cunningham said. "I'm doing it at the request of the mayor and because my responsibility is to support Jersey City and Bayonne legislatively in Trenton." She said the legislation is necessary to prevent hefty tax hikes. City taxes have increased 11.25 percent since July 1. "We view the pension deferral as one of several measures to offset any deficit and we view it as an interim measure," Healy said. "We are confident the economy will rebound, generating more revenue and ratables for Jersey City." Ward E Councilman Steve Fulop called paying interest on the deferred payments a bad idea. "Rather than making tough decisions to cut political patronage, this pension scheme will kick the can down the road so that every year going forward we will start paying larger interest on current obligations instead of paying commitments today," Fulop said. Jersey City deferred $14.8 million in pension payments in the last fiscal year and the administration has yet to craft the 2009-2010 budget. Officials have said they're facing a $40 million budget deficit this year. But before the city can count on another deferral, the Senate and Assembly must pass the bills and get the governor's approval. The Cunningham and Quigley bills call for repaying the deferred amount back over 15 years, with interest. The interest rate is estimated at about 8.25 percent, but could change with the market. Gov.-elect Chris Christie last night said he opposes the legislation. He added the issue does not affect his respect for Cunningham, who is a member of his transition team.
Posted on: 2009/12/16 15:19
|
|||
|
||||
|
Re: Bill would let N.J. towns put off pension payments - Jersey City has specifically sought this relief
|
||||
|---|---|---|---|---|
|
Home away from home
|
N.J. Gov.-elect Chris Christie opposes pension deferrals by local government
By Trish G. Graber December 15, 2009 Governor-elect Chris Christie answers reporters' questions following a meeting Monday with the executive board of the New Jersey College Presidents' Council, held at Rutgers University in New Brunswick. TRENTON -- Gov.-elect Chris Christie today said he opposes legislation a member of his transition team sponsored to let local governments put off paying part of their pension contributions this year. If passed, the bill would allow towns, cities and counties to pay half their obligations to the pension system in the spring, after Christie has taken office. Sen. Sandra Cunningham (D-Hudson), who is advising Christie on municipal issues, said the legislation was a response to concerns from a constituent mayor. "This has absolutely nothing to do with Chris Christie at all, this is my role as a legislator," Cunningham said today. Full Star-Ledger coverage of the N.J. Governor-elect Chris Christie transition Full Star-Ledger coverage of the N.J. budget The senator said she introduced the legislation after being asked to do so by Jersey City Mayor Jerramiah T. Healy, who is facing a $40 million budget deficit and will furlough city employees for 12 days before the end of the fiscal year. "I?m responding to the needs of a mayor," she said. "I?m concerned about raising taxes in Jersey City at this time." The legislation (S-3136) essentially would extend by a year a controversial measure ? which Gov. Jon Corzine pitched and signed into law earlier this year ? to allow towns to defer up to a half billion dollars in pension payments. Christie sharply criticized the move by the governor, who posed it as a means for local officials to avoid increases to property taxes during the economic recession. The incoming Republican governor today said he still does not support providing towns the option of deferring pension payments, but he did not elaborate. He added the issue does not affect his "respect" for Cunningham. "It will be shocking for you to know that I don?t agree with everything that everyone around me proposes," Christie said. "I have great respect for Senator Cunningham. I am thrilled that she has been willing to devote as much time and energy as she has been to our transition and continues to. ... This is one that we just happen to disagree on." The proposal was opposed last year by legislators who said it would cost taxpayers more over time. Public unions worried deferring payments would hurt the already underfunded pension system. The bill would free up money this year, and towns and cities would replenish the funds over 15 years beginning in 2013. Assemblywoman Joan Quigley (D-Hudson) who is sponsoring the bill in the lower house, said she understands the concerns but said the legislation is necessary. "It will cost more in the long run, but you do that when you?re in a fiscal crisis," she said. "I don?t see any other short-term alternative." Statehouse reporter Claire Heininger contributed to this report.
Posted on: 2009/12/16 1:25
|
|||
|
||||
|
Bill would let N.J. towns put off pension payments - Jersey City has specifically sought this relief
|
||||
|---|---|---|---|---|
|
Home away from home
|
Bill would let N.J. towns put off pension payments
By Jonathan Tamari Inquirer Trenton Bureau Dec. 15, 2009 For the second consecutive year, New Jersey towns could skip half of their required pension payments under a bill proposed by Sen. Sandra Cunningham, a Hudson County Democrat. The deferred contributions would have to be paid back to the state's beleaguered pension system over 15 years. The plan would provide short-term savings, but increase the fund's long-range deficit and add to future municipal-budget costs. The idea would be to give towns and counties some immediate budget relief, alleviating the pressure on them to cut services or hike taxes as state and local governments cope with depressed revenues and falling levels of aid. Gov. Corzine recently held back $20.6 million in aid to towns as state revenues fell below projections, adding to the strain on municipal finances. "There are some municipalities that would need this," said William Dressel, executive director of the New Jersey League of Municipalities. Dressel said Jersey City, which is in Cunningham's district, had specifically sought the relief, and he thinks other towns also would want the option. The pension deferrals proposed would delay contributions to funds intended to pay retirement benefits promised to municipal workers. Critics say the move could further weaken the state's already wobbly pension system and add pressure to increase property taxes in later years. The state's seven pension funds had a $34.4 billion deficit as of June 30, 2008, the last date evaluated by actuaries. That's more than the annual state budget. The shortfall has undoubtedly grown since then, because towns were allowed to defer half of their required pension payments in the previous budget, and Corzine provided only a small fraction - less than 10 percent - of what the state owed in the current spending plan. "If you continue not to make the payments, [the pension system is] going to go bankrupt," said Senate Majority Leader Stephen Sweeney, a Gloucester County Democrat. The state's substantial pension deficit "only gets larger each year when you don't make the payment, and someone somewhere has to say 'stop,' " he said. A total of 174 towns, roughly one in three, took advantage of the pension deferral last fiscal year, saving $220 million in the short term but adding those costs onto future budgets, according to the Department of Community Affairs. In a recent study on states in fiscal peril, the Pew Center on the States cited New Jersey's pension shortfall as a central piece of the state's financial problems. Sweeney noted that workers, including municipal employees and police, have continued to contribute portions of their paychecks to the pension system while the state government has shortchanged it. As a candidate, Gov.-elect Christopher J. Christie criticized the pension deferral that Corzine proposed in his last budget. Cunningham, a member of Christie's transition team, did not return a phone call seeking comment on her bill. Sen. Barbara Buono (D., Middlesex), chair of the Budget Committee, said that she had already heard from several mayors calling for another round of pension relief, and that the pressure for such a move had increased since Corzine put a hold on state aid. But she said her caucus had not yet discussed the bill to decide if or when it would be heard.
Posted on: 2009/12/15 8:59
|
|||
|
||||
|
Re: still clueless
|
||||
|---|---|---|---|---|
|
Home away from home
|
Yvonne,
Not interested in being on your show, however the facts, excerpted from NJDOE website explaining the new school funding formula, follow: As it relates to "At risk" kids (eligible for free and reduced-priced lunches) and how that is factored into the formula the following FACTS are excerpted from A Formula for Success: All Children, All Communities on NJDOEs website: Section titled Allocation of Aid to Districts, bottom of page 19-20.. FYI..Adequacy Budegt is what the State determines that a district should be spending to educate children. "Adequacy Budget = (Base Cost + AR Cost + LEP Cost + Comb.Cost + Spec Ed Census) x GCA" "Where: AR = At-Risk (includes students that are eligible for free and reduced priced lunches) LEP = Limited English Proficient Comb. = Combination (an LEP student who is also eligible for free or reduced-priced lunch) Spec Ed Census = The special education census-based costs that will be wealth-equalized GCA = Geographic Cost Adjustment (Index in Appendix B) Elem = Elementary MS = Middle School HS = High School Enr = Enrollment" Further: Section titled Determining Adequate Costs on Page 12... "Based on the response from the public, Odden?s review, and guidance from the advisory panel, the Department decided to expand the definition of ?at-risk? to include students that are eligible for reduced-priced lunches (185% of the Federal Poverty Level, FPL). This is a significant enhancement since the definition has historically included only students that are eligible for free lunch (130% FPL). In addition, the Department decided to increase the weight as the district?s proportion of at-risk students increases to reflect the additional academic challenges present in districts with high concentrations of poverty. The at-risk weights implied by the PJP resources seemed counter-intuitive, as they did not increase with at-risk concentration. The weights implied by the PJP process are: 0.45 for the low at-risk concentration; 0.42 for the moderate at-risk concentration; and 0.46 for the high at-risk concentration. The Department?s final proposal accounts for the ?concentration effect? by applying a sliding scale at-risk weight with finite values at 0.47 and 0.57. In other words, in districts with an at-risk concentration less than 20% each at-risk student will receive a weight of 0.47. This weight will gradually increase as the at-risk concentration increases to a maximum weight of 0.57 for districts with an at-risk concentration greater than or equal to 60%." Additionally the documents includes the following section on Page 19 which explains why districts like JC will suffer "payment shock" as it relates to school funding if they were previous Abbott districts, have been spending above adequacy, have had significant improvement in property wealth and income in recent years and have been using outdated measures of local income and property wealth to fund thier schools with the State picking up most of the tab: "The Department?s proposal includes two types of aid: wealth-equalized and categorical. Wealthequalized aid is allocated according to each district?s ability to raise enough local revenue to support their adequacy budget. The equalization formula used in New Jersey considers both a community?s property wealth (measured by equalized property valuation) and aggregate income to determine the local ability to pay. Both measures are considered equally and indexed by the statewide wealth multipliers. The multipliers ensure equalization of the local tax effort, and are similar to applying a local property tax rate equally to all districts. The wealth equalized portion of the funding formula is applied uniformly to all districts, distributing state aid equitably based on each community?s ability to pay relative to that of all others in the state. Categorical aid is allocated regardless of a district?s ability to raise local revenue. Categorical amounts are typically determined by multiplying the cost factor for a particular category by the number of students that qualify for the aid." The entire document can be viewed here: http://www.nj.gov/education/sff/repor ... hildrenAllCommunities.pdf I suggest you read the document. And sincerely hope this is you playing politics on the board. Also for the sake of the public, I hope you are just not informed on this particular subject and hope it does not reflect the way you approach your show as misinformation poses a more severe danger to the public than no information at all.
Posted on: 2009/3/30 13:27
|
|||
|
||||
|
Re: still clueless
|
||||
|---|---|---|---|---|
|
Home away from home
|
This comment is to Life O' Reily or other critics on this subject. I will allow one of you to present your facts on my cable show Speak NJ. I do have some requirements: You must use your real name (ID required, you must be courteous (after all it is tv), and you must present facts. On the show I will present in details the JC budget and the Hudson County Board of Taxation records. If Life O'Reily or another critic is interested then please go to my web site www.speaknj.com for the email address. Speak NJ airs in JC, Bayonne, and eight towns in the Meadowlands area. This is your chance. I guess I am saying "Put up or Shut!"
Yvonne
Posted on: 2009/3/28 19:52
|
|||
|
||||
|
Re: still clueless
|
||||
|---|---|---|---|---|
|
Just can't stay away
|
Sweetie, do yourself a favor and take an accounting or economics class at Hudson Community College. And while you are at it, consider a writing class. Your written communication is deplorable.
Tax abated properties still pay "money" (e.g. not "nothing") to the city. Whether that money specifically pays police salaries or teachers salaries is immaterial to the discussion. In fact this whole discussion is about the city deferring a pension payment. The under funding (and/or over generous) pension benefits has been an issue with the city well before Waterfront property development. (Likewise with the school system which was taken over by the State before such time). It's a fact that the City is getting a boat load more revenue from the Waterfront development, whether it be front property/abatement/PILOT payments or aggressive parking enforcement and ticketing. You are free to argue downtown residents should be paying more in taxes. That is a fair discussion. Keep in mind though such properties are a boom to the city's coffers. More revenue is coming in than is being expended by the city for these properties. For example, since you are so stuck on school funding, despite a huge increase in the downtown population, brought on by ?Waterfront development?, what new schools have been developed and paid for with City Tax revenue? Answer: none. What new parks have been developed by the city? Answer: none? New library? None. New Fire Departments or Police Departments. None. Do you catch my drift? I guess we got what we paid for. That?s correct: nothing. But the sad truth is these properties do contribute revenue to the city. And this is so more than the cost of laying down fresh tarmac in front of these properties. Evidently, City Hall is doing a fine job of drinking and pissing our money away. As a down-towner, living in an abated property, and who has lived here prior to the Waterfront development, does pay tax revenue to the city, your comments are so far off the mark. They are completely factually incorrect . By all means Yvonne, cavil on!
Posted on: 2009/3/28 12:06
|
|||
|
||||
|
Re: still clueless
|
||||
|---|---|---|---|---|
|
Home away from home
|
I think you have a problem reading. Tax abated properties pays nothing to the Board of Ed and recently have paid 5% (New abatements) to the county. If they prepay their tax abatements, then they pay nothing for several years. Also tax abated properties pay nothing to the city until they receive their certificate of occupancy. That could take several years. At least I am putting my name on this, you might be a Healy person working for the city defending the system of tax abatements.
Yvonne
Posted on: 2009/3/28 2:35
|
|||
|
||||
|
still clueless
|
||||
|---|---|---|---|---|
|
Just can't stay away
|
"Waterfront property is tax-abated and pays nothing to the city."- Yvonne
Posted on: 2009/3/28 1:39
|
|||
|
||||
|
Re: Council moves to defer $14.8 million in pension payments
|
||||
|---|---|---|---|---|
|
Home away from home
|
I would like to know what half-truths I am spilling. By the way, if abatements work when why are taxes increasing? I will give you the answer, the ratable base is not increasing. Also we are also paying more to the County and Board of Ed. In 2004, Freeholder Bill O' Dea produced a chart to show how much Jersey City was paying in county taxes compared to the other towns in the county. Abatements do not work.
Yvonne http://www.speaknj.com/2002-2004.pdf
Posted on: 2009/3/28 1:21
|
|||
|
||||
|
Re: Council moves to defer $14.8 million in pension payments
|
||||
|---|---|---|---|---|
|
Home away from home
|
Yvonne is spewing a lot of misinformation that I suggest most people forget.
If you are really interested in knowing the intricate details of JC's property tax code search the site for some of JCLAW's posts. He/She seems to be the only person on this site who understands the system. Some threads: http://jclist.com/modules/newbb/viewt ... 29e446f20a#forumpost58135 http://jclist.com/modules/newbb/viewt ... t_id=78761#forumpost78761 http://jclist.com/modules/newbb/viewt ... id=109199#forumpost109199 I don't expect most of you to research because it is more fun to post inaccurate knee-jerk responses.
Posted on: 2009/3/28 0:54
|
|||
|
||||
|
Re: Council moves to defer $14.8 million in pension payments
|
||||
|---|---|---|---|---|
|
Not too shy to talk
|
Yvonne is either being really unclear or spreading half-truths. The benefit for PILOTS is that they city gets more tax money. Once the residents move in, they pay their property taxes to the city as do all other property owners. I bought a condo that has a 5 year abatement. I wish I didn't have to pay the $7000 a year, but I do.
I'm also glad that Fulop voted against the deferral.
Posted on: 2009/3/28 0:36
|
|||
|
||||
|
Re: Council moves to defer $14.8 million in pension payments
|
||||
|---|---|---|---|---|
|
Just can't stay away
Joined:
2004/3/11 23:46 Last Login : 2011/10/29 16:00 From Hamilton Park
Group:
Registered Users
Posts:
150
|
I'm no fan of deferring Jersey City?s 2008 pension funding, but I've really grown tired of reflexive, ad hominem criticisms on the part of our Ward E councilman. It might make for entertaining sound bites, but it doesn?t point the way forward on how to fix Jersey City's perennial financial and budgetary problems.
So is it the "height of irresponsibility" and an election year gimmick? What?s the alternative? Restore the $15 million pension fund payment to the budget? Would this be the politically correct reformist thing to do? It always appears to be a win-win when you get to blame the powers that be no matter what they do. If they defer and keep taxes steady -- they're "irresponsible". If they don't defer and raise taxes -- they're "irresponsible". If they cut from the police, fire and other essential city service budgets, placing residents at greater risk -- they?re ?irresponsible?. If we?re going to hold the city administration accountable for budgetary outcomes, why should we give the legislative branch of city government a free pass when it comes to their legislative responsibility to critically and thoroughly examine every element of the city?s budget -- line-by-line, and on a holistic basis? Our council people should not get off the hook by pointing the finger in the other direction and saying it's not within their legislative prerogative to propose alternatives or it?s not their role to scrutinize the budget with greater care. Jersey City?s financial and budgetary process has been broken for decades -- it?s a systemic problem we?ve let drag on way too long. Like Bernie Madoff's Ponzi scheme, we always found enough quick cash from new sources to string us along from year-to-year, and we managed to duck the inevitable. This worked as long as the economy and market around us was growing. We?ve had a number of close calls over the years, but it?s taken a financial credit crisis of global proportions to make the cracks plainly visible. The quick fix of choice in the flush years ? accelerating new tax abatements ? didn?t really come to the rescue in the 2008 budget, and it may fall farther short in 2009. I really hope I?m wrong, but with the real estate market still in turmoil, even previously agreed upon PILOT payments are at risk of falling short. It?s unfortunate, but the pension deferral for the 2008 budget year is perhaps an unavoidable best choice among alternatives that appear to range from poor to unacceptable. Call it what you want, election year or not, in the absence of better alternatives, the city probably made the right - but difficult call - to defer and avoid raising taxes. Raising property taxes now would make a bad situation even worse. How callous would it be to raise taxes on those far less fortunate Jersey City residents who teeter on the edge of foreclosure? Today?s article in the Jersey City independent comes to mind, and is an excellent read --> the Jersey City Independent. But we shouldn?t get too complacent. This year?s Hoboken property tax massacre could be the prequel for Jersey?s City?s own 2009 budget nightmare, especially if we continue accepting the status quo ante from our legislators There is plenty of waste to be trimmed without materially affecting the quality, effectiveness and efficiency of essential city services. Candidates who claim to be reformers should be tackling these issues head on, and visibly ? but they?re not. Are they too politically compromised or fearful of the deals they?ve made to risk an honest public discussion of how to fix our city?s budget? If so, then they are not very different than those they have railed against for the past four years. Geoff Elkind
Posted on: 2009/3/27 22:59
|
|||
|
||||
|
Re: Council moves to defer $14.8 million in pension payments
|
||||
|---|---|---|---|---|
|
Just can't stay away
|
It pains me to write this, as you do a really great public service with speaknj.com, but enough is enough already. You are clueless about city revenue/finances.
Why do I care? Because, Yvonne, you are confusing others here with posting such patently false misinformation. Such is evident when you write, "Waterfront property is tax-abated and pays nothing to the city." This is absolutely incorrect. I mean really such comments are so far off the mark. Give it a rest already. Really. Please. Thank you.
Posted on: 2009/3/27 20:33
|
|||
|
||||
|
Re: Council moves to defer $14.8 million in pension payments
|
||||
|---|---|---|---|---|
|
Home away from home
|
Quote:
If the City does another reval those fleeing the City will rival the days of white flight in the 50's and 60's.
Posted on: 2009/3/27 19:40
|
|||
|
||||
|
Re: Council moves to defer $14.8 million in pension payments
|
||||
|---|---|---|---|---|
|
Home away from home
|
I attended the public meetings when Abbot and other public fundings occurred. I am familar with the formula. Let's not forget, the lawsuit on funding was filed by a student in P.S. #16. I followed everything that happened. The reason Corzine appealed the Board of Ed funding is to spread the tax dollars to other communities. That funding is based on poverty guidelines. Hoboken at one time received Abbot funding but the income guideline has changed. On the other issue, the County not the city strikes the budget. The county strikes the budget for all municipalities.
Yvonne
Posted on: 2009/3/27 19:18
|
|||
|
||||
|
Re: Council moves to defer $14.8 million in pension payments
|
||||
|---|---|---|---|---|
|
Home away from home
|
Quote:
Also, what does the above statement mean? Hudson county government determines JC budget? You are probably not writing what you intend to because that is also not accurate.
Posted on: 2009/3/27 16:58
|
|||
|
||||
|
Re: Council moves to defer $14.8 million in pension payments
|
||||
|---|---|---|---|---|
|
Home away from home
|
Quote:
Yvonne, the State does not award Bd of Ed (Schools) money based on the number of "poor residents"...it is the number of "poor" children who are enrolled in public schools which is determined by the number who qualify for free and reduced lunches. "Poor residents" and "poor children" are not the same thing, further both are very vague, hence eligibility for free and reduced lunch. "The new development on the waterfront raises up that number" (the number of poor residents or poor kids in the city)? Are we living in the same city? Cause I have yet to see any development on the waterfront that has increased the number of poor kids or poor residents in Jersey City. "The city is less poor"....could not be more accurate and that is why the State is telling the city that it needs to contribute more to fund its schools. "Waterfront property is abated and pays nothing to the city" is just plain innacurate. Dont know all the inner workings of abatements and their schedules but my understanding is the if you have two properties both paying $10 in taxes and property A is abated and property B a ratable, the city gets to keep more of the $10 from the abated property than it does of the $10 from the ratable. You are correct that ratables (non-abated) properties reflect the wealth of the city and that ALL property including those abated should be used to accurately reflect the city's wealth. That is the same argument that the State is using in the new funding formula. It is looking at JC as a whole and saying the property wealth of your city has changed drastically, you CAN afford to provide more to fund your schools. While other Abbott districts may be able to convince the State that they need more money than the formula provides, JC will have an increasingly difficult time doing so because so many housing units have been added to the city and property values have increased significantly relative to when Abbott funding began.
Posted on: 2009/3/27 16:43
|
|||
|
||||
|
Re: Council moves to defer $14.8 million in pension payments
|
||||
|---|---|---|---|---|
|
Home away from home
|
To Jececker:
You asked me the benefits, I must first talk about the negatives. First, the state awards Board of Ed money based on the number of "poor residents" in a city. The new development on the waterfront raises up that number. The city is less poor. However, Waterfront property is tax-abated and pays nothing to the city. Another negative is poor planning. The city needs this cash every year and ignores vital planning. You may not be aware of this, but JC will not know how much money it will receive from the Journal Square development for 5 years. The abatement depends on their costs and other considerations. During the 1980's residents went to meetings when LeFrak wanted support for their development. The developer promised a "Central Park" development with a great deal of open space. Where is that? As far as the positive, if the city only gave 5 years abatements which is the state norm and used that money to pay off bonding debt, then I wouldn't have a problem. After reading some of the comments I do understand that many people are confused about ratables. Ratables do matter it is the wealth of the city and abatements are not considered ratables. It is the County who strikes our budget not the city. I consider abatements as found money. It is nothing you can rely on for the next budget year. In fact, there are $0.00 in the column for next year on development projects who have already prepaid their abatements. Yvonne
Posted on: 2009/3/27 15:47
|
|||
|
||||
|
Re: Council moves to defer $14.8 million in pension payments
|
||||
|---|---|---|---|---|
|
Home away from home
Joined:
2007/11/28 3:26 Last Login : 2014/10/27 13:13 From The fog.
Group:
Registered Users
Posts:
1013
|
An abatement doesn't mean the condo owner pays less in taxes. They just pay a different sort of tax. The typical downtown high rise owner pays about 1.6% of the purchase price in PILOT (Payment in Lieu of Taxes), which is a property tax of a different name (and not even deductible for state tax purposes.) The abatement, as far as I know, means they have the knowledge that their rate will not change or the property will not be revalued during the abatement period. And this money apparently goes straight to the city, as shakatah mentioned.
I could be wrong about all this and would love clarification. But if someone who owns a Trump condo that they bought for $700k is paying a PILOT of about $11k each year that is supposed to go straight to the city, how can they be accused of not sharing the burden?
Posted on: 2009/3/27 14:31
|
|||
|
||||