NY Times News Alert:

New Jersey lawmakers on Thursday approved a broad rollback in benefits for three-quarters of a million government workers and retirees, the deepest cut in state and local costs in memory, in a major victory for Gov. Chris Christie and a once-unthinkable setback for the powerful public employee unions.

The Assembly passed the bill as Republicans and a few  Democrats defied raucous protests by thousands of people whose chants, vowing electoral revenge, shook the State House. Leaders in the State Senate said their chamber, which had already passed a slightly different version of the bill, would approve the Assembly version on Monday, and Mr. Christie, a Republican, was expected to quickly sign the measure into law.

So what are the details?  Anyone know?  What benefits did they lose?  I will have to assess the loses before I have an opinion.  NJ is one of those states that is in big trouble.

Update from Buckinghampost.com:

A crushing blow was dealt to NJ union and state workers today when the assembly voted 46-32 in favor of Gov. Chris Christie’s benefits overhaul bill. This means that hundreds of thousands of state workers including policemen, firemen, and teachers will be required to pay a larger portion of their retirement and health benefits. In addition unions would lose the ability to bargain for their medical benefits. The task of setting benefits will now be taken over by a panel of union workers and state managers. Unions will not be allowed to resume bargaining for benefits for four years, when the increased contributions have been phased in.

The bill’s proponents, largely Republican, see this as a huge step in closing the state’s $120 billion pension and health care shortfall. They claim that the bill will save an estimated $3 billion in health benefits over 10 years and another $120 billion in pension costs over the next 30 years.

 It is still unclear how much extra the public employees will have to pay.  They seem the most upset over losing the right to collectively bargain their medical benefits.  It also appears that they will be able to resume collective bargaining after 4 years.  In the interim, a panel of state managers and union workers will set the benefits.

This measure seems to a fairer situation than what happened in Wisconsin.  New Jersey has higher teacher salaries than Wisconsin and this move seems more corrective and less punitive than the Wisconsin.  Wisconsin appears to be pure union busting.

Round Table Discussion for more information

 

24 Thoughts to “NJ public workers suffer deep cuts in benefits”

  1. Emma

    “This means that hundreds of thousands of state workers including policemen, firemen, and teachers will be required to pay a larger portion of their retirement and health benefits.”

    Federal pay has already been frozen for two years, and may possibly be extended to five. And their retirement accounts are also becoming the latest ATM for more government spending. And that is a bipartisan effort.

    And weren’t we supposed to be out of Libya by now?

  2. Welcome to my world. re ATM
    GRRRRRRRRRRRRRRRRR

    Not sure I see the difference in freezing pay and requiring workers to pay a larger portion of retirement. It all reduces earning capacity.

  3. Just keep picking on the poor and people who can’t make ends meet!!! And if you read this Heath Care Bill, if doesn’t even effect members with over 20 years of service, the ones making the MOST!!!! Pick on the ones making the least!! Way to go jerkoffs!

    1. Mark, you are an example of someone who comes along and shoots off his mouth without knowing what he is talking about. I have spent the past 5 months defending the public servants of Wisconsin. I have no idea what you are talking about. Want to explain what you mean by the health care bill?

      Troll alert.

  4. Heck, I can’t even tell whose side he’s on. Lesson one: if you are going to do a drive by squirrelling, make sure that you clearly state whose side you support. See Starry’s posts for examples…..

    Lesson two: Dude….make sure that you talk about the thread’s subject or, at least, tie in you screed to the topic.

    Lesson three: Trolls suck.

  5. marinm

    I *think* he’s a far left progressive and is unsatisfied that the rich aren’t being taxed to give a public option and that the ‘poor’ working class are being picked on by the evil govt.

    I have enough progressive friends that I’ve been able to decipher the non-sense.

    At least I *think* that’s what he was saying.

    I think what’s happening in NJ is a sign of the times. Government can’t pay it’s bills because benefits have been too good. Corporate America did this many years ago and now govt has to do the same.

    We’re simply rebooting ‘expectations’ of the employer-employee relationship.

    +1 on him being a troll

    1. There are people who support public unions or professional associations who are not anywhere close to being far left progressives.

      I think its best to think the topic through without feeling the need to hang a label on it just to talk about it. Troll is one thing. That is a behavior. But I have known many people who belonged to both unions and professional associations who would have identified themselves as conservative.

      I think this is just another excuse to name call.

      As for NJ being a sign of the times, I think that is correct. However, you can’t be playing Lord of the Manor and helicoptering over to your kid’s little league game when trying to do anything that remotely resembles union busting. NJ public employees have fared well over the years. My uncle always bragged to my parents about his pensions and benefits. Thats what happens when you are union closed shop vs. open shop professional associations.

      In Virginia, municipalities have squandered the money that was supposed to go to VRS on other things. You know, that is not those employees faults. That is poor governance. That is irresponsible accounting.

      If rmployees now have to chip in for their own retirement, then it has to be. If people have to pay more for their health care, so be it. But don’t blame those employees. Blame those who wanted something for nothing all along the way. In Virginia, that was a cheap out not to give raises. Well, the chickens have now come home to roost.

  6. marinm

    “There are people who support public unions or professional associations who are not anywhere close to being far left progressives.”

    I’m only reiterating the argument points they make. I don’t agree with those points. They just happen to be very far left progressives. I also caveat that with saying they are to the left of progressives so I don’t assume that all progressives share that value. So, I’m not trying to name call unless using a talking point from a far-left progressive is somehow name calling.

    I think that’s the point Mark is trying to make. But, I think he went to public school so he probably has some anger issues and has trouble putting his thoughts to text. 😉

    I think what Christie did was dumb. I won’t even justify it with “well other executives do it”. No, it was dumb. He was rightly torn a new one in the press. I bet his kid even feels like the bottom of his shoe for his dad coming in and leaving that way. I know I would’ve.

    Your uncle bragged to your parent about his pension and benefits? The same one paid for by putting a spear to your parents throats. Classy. I think that’s why people in the middle are siding with Walker and others. Because they’re tired of having people have jobs for life, benefits better than what they have and paying for it with increased taxes that they can little afford. It’s just as classy as flaunting a helo to a high school ball park — I agree.

    No doubt that government screwed up. And yes the little guy (teachers and other civil servants) will eat it in the shorts for something they didn’t do, didn’t have any control over (except voting the same dumbasses in year after year) and had no direct control over. Just like taxpayers have been getting screwed for many years.

    The answer of course is not to trust our dysfunctional government with MORE money or more power. The simple answer would be to take it away.

    I don’t blame the employees directly except to say that by partnering up with a teachers association (or other public union) and concentrating less on job issues and more on compensation issues that they are losing support from the (overtaxed) middle. That middle is shifting to my idea that compensation needs to come down.

  7. Wolverine

    Kind of amazing to see Republicans and Democrats working together these days in a state legislature to seek a solution to a major state problem. Same thing seems to have happened in New York. Dem Governor Cuomo proposed and pushed for the first serious cuts in the state budget in 17 years — cuts in state Medicaid; cuts in funds to local education; cuts in the prison system; layoffs of nearly 10,000 state employees. Big arguments between the politicians and the unions and some serious misgivings among Democratic legislators; but the thing has been passed without increasing taxes. Cuomo’s rationale for the cuts without increased taxes was the same as Republican governors in other Northern states: We are already losing our commercial and industrial tax base to a point of real hurt. We raise taxes, and we will start an even bigger flight and create an even bigger budget problem.

  8. @marin, my uncle bragged to my parents because he was in NJ and my parents were educators in Virginia. He bragged that he had better benefits etc. So no spear at my parents throats.

  9. @marin, you and I are probably never going to agree on this issue. I am always going to believe that public employees should have competitive salaries and benefits.

    Salaries and benefits are what attract good workers. The tax-payers are going to have to support getting qualified workers. Its fairly simple.

    I guess what I don’t understand is why you think that cops, educators, state and local workers should make substandard pay and have poor benefits? Why should they have no retirement?

    Private workers had higher salaries and better paid benefits for years. That 401k is based on a much higher salary than some poor schmo’ working for the state.

    Remember–private has higher pay, public has better benefits, as a rule. That is the draw to being a public employee.

  10. marinm

    @MH, we probably won’t but I do take joy in the discussion regardless. It’s a distraction from my textbooks.

    Your para 2 point is something I agree with as it’s the standard capitalism gets us the best of the best argument. But, you leave off on what a ‘good qualified worker’ is. What’s the metric? Kids that pass? Kids that can read? Ask the NEA about how to rate a teacher as ‘good’ and you’ll get static. They only want one thing; tenure = good teacher = bigger salary. I know on any given Sunday I may be terminated with or without cause. Do you see that in the public space? How about we trade. I’ll give up more benefits if administrators can fire at will. No?…

    To your para 3. At what point have I said I don’t want them to have retirement? I’m a huge advocate for public workers having access to 401 or 403 investment instruments. I think pensions are dead. Government is now figuring out what the private market has known for many years. It just can’t sustain itself long term (especially with people living longer)

    Also to para 3. Substandard (pay) benefits compared to what? Me? To a McDonalds worker? Someone working retail? It’s been posted many times before that official studies (that the OPM ignores) that govt workers make more pay AND benefits than private workers (except the superstar private workers, of course). I don’t want pay at welfare levels but neither do I want it anywhere close to where it is currently. Compensation as a whole needs to be recalculated (think of this as a market correction) to factor in high cost of insurance, educational benefits, etc. That means the employee needs to ante up more if they want to continue to enjoy those benefits.

    Para 4 and 5 have on the whole been proven to be false with multiple postings of studies from news sources showing that government employees on the whole tend to make more and get better benefits than the citizens they represent.

    Just like real estate prices are in a correction so to will be compensation. It’d be nice if we can pay every police man the same salary a major league ball player makes. But, that’s fantasy land. In reality the numbers need to add up and right now employee costs and benefits have us as the taxpayers in the RED.

  11. I just spent a good chunk of time trying to figure out what these changes would mean to public employees from a financial perspective, and I’m not really sure what that will be. I pulled up the bill S-2937 and it was as clear as mud, so I dug around to different places, including the state employee handbooks.

    Here’s what I sorted out, and I’m not absolutely sure about any of this.

    It looks like for pensions teachers and other government workers will be required to contribute an additional 1% of their salaries immediately with an additional 1% contribution phased in over 7 years. Police officers and firefighters will have an addition 1.5% contribution taken immediately. After that 7 years the total contributions for pensions for all state government employees will be 8.5% or 6.5% of salary (I honestly couldn’t figure out which one as there are different contribution rates and different increases for each “group” of worker. All I could figure out was that teachers take a 1% hit immediately with an additional 1% phased in over 7 years and police and firefighters take a 1.5% hit immediately).

    Contributions for medical benefits seem to have the largest change. Right now state employees pay 1.5% of their salary for medical benefits. With this bill that changes to 8% to 30% of premiums paid for medial benefits, depending on salary level. That represents a big change as employees might take a big hit if premiums increase a lot in any one year.

    Because of the variability in salaries for teachers, police officers, firefighters, and government employees as well as the variability in the cost of of medial premiums, determining the general impact of such a change is next to impossible.

    I was able to determine the salary of the lowest paid NJ employee – about $24,000 a year. This person will pay an additional $240 a year immediately and an additional $32 each year thereafter for 7 years for pension benefits.

    Right now this person pays $360 a year for medial benefits (1.5% of $24,000). With the change in medical benefits payments, assuming he has the most expensive medical plan NJ offers, he’ll pay somewhere between $376 a year (8% of premium costs) and $1,400 a year (30% of premium costs). On the low end an additional $16 a year isn’t that big of a deal, but an additional $1,040 a year is huge for someone only making $24,000 a year. I would hope that this person was in the 8% of premiums bracket as opposed to the 30% of premiums bracket, but I assumed the worst case scenario to see the most extreme example possible.

    For the average teacher (salary of $58,000) the worst case scenario would be to be in the 30% premiums bracket with the most expensive medical plan. In that case that person would be paying an additional $541 a year (or $45 a month) for medical benefits plus an additional $580 per year ($48 per month) for pension benefits immediately.

    Long and short of it is that it looks like the average state government worker in NJ will be paying more for medical care and pension benefits, though not significantly more and how much more they pay will depend largely on which medical plan they choose (in some instances they may end up paying less).

  12. Part of the problem is we are dealing with averages across the entire United States.

    Do you think you should be making more than the civil servants you work around because you work for a private company?

    I don’t see the pension as dead. Its only dead if we want it to be dead. Everyone knows not to take a 401k to replace a pension. Why would anyone in their right mind do that?
    Some really decent companies still offer pensions and those companies will attract the best workers. What I am saying is very capitalist….Since the various levels of governments generally can’t offer top pay like a blue chip company can, they offer benefits instead.

    You have never said you want public employees to have less directly but everything you say infers it. It is almost like a class thing…like public employees are lower on the food chain than private industry. I don’t think that is true at all. I don’t even think the 2 situations can even be compared.

    One reason it appears that public employees make higher salaries is because they are usually doing jobs that require degrees and advanced degrees. Very often municipalities contract out lower skills set jobs. Throw a million teachers, doctors, professors, scientists and nurses in the mix and that is just how your stats are going to come out.

    This is why averages don’t work. Let’s take the Wisconsin situation again–if you compare the salaries of those public employees to comparable jobs nationwise, those folks really are not making all that much money in salary. Their benefits fare a little better but not much.

    There are a great many smoke and mirrors involved here and it is to union bust in the case of Wisconsin and Gov. Walker. Why? To disenfranchise democrats.

    I actually think Christie is dealing on a different plain. While we might not like what Christie is doing, he is attempting to save NJ money and a system that is in crisis. He has been involved in some give and take. I am not trying to make him Golden Boy of the Year but he is just a cut above that dude out in Wisconsin who is just transparent.

  13. Kim, thanks for that analysis. Is $58k starting pay for NJ teachers? I feel certain it isn’t average pay. NJ teachers make a decent salary but they have high cost of living.

    All in all, I don’t feel the NJ teachers are being gouged as badly as many are around the country. But I feel certain someone will come along and tell me I am wrong.

    I think all public employees are just going to have to get used to the idea that at some point they are going to have to make contributions towards their own pensions. I did it for about 14 years and I survived. The bad thing now is those with more time in. They have higher salaries and the pension takes a much bigger bite out of their pay than mine did prior to 1983. Its still worth it to preserve a pension.

    And I have to say it again–VRS was in good shape before the crash and before it became an ATM. VRS lost something like 20% during the crash. Compare that to most people’s 401k. It was a well managed system. What is hurting it is politics.

  14. Marin, I forgot to answer your question about NEA. You give NEA way too much credit, at least in Virginia. Furthermore, they only deal with eduation issues. There are lots more public employees in VA that aren’t teachers.

    Do you think better test scores is really the mark of a good teacher? What about that teacher who teachers the kids out of poverty and heavily minority areas where many kids have limited English skills. Do you think those teachers are going to have as good of test scores as the kids say at Benton? There are too many variables.

    What makes a good doctor in a state hospital? One who has fewer deaths? Do we compare the oncologists to the allergists? Each area has its standards as to ‘good.’ You sure know it when the worker isn’t ‘good’ and you don’t need NEA or any other organization to set you straight on it.

    And often ‘good’ means simply that you have lots of applications so that you have lots of choices in hiring. You don’t want to have to beat the bushes for employees.

  15. marinm

    “Do you think better test scores is really the mark of a good teacher? What about that teacher who teachers the kids out of poverty and heavily minority areas where many kids have limited English skills. Do you think those teachers are going to have as good of test scores as the kids say at Benton? There are too many variables.”

    How do teachers mark students? Is it that subjective? I think it’s more of… is little Johnny capable of doing x, y and z. If he’s not and everyone of his peers is in the same boat. Let’s look at the teacher. If it’s only a few students that don’t apply themselves. Flunk ’em and they can wash my car in the future.

    I refuse to buy into the union idea that a teacher can’t have a metric attached to them because it’s just too dynamic. If that’s the case allow administrators to simply fire ‘poor performing’ ones based on their own ‘dynamic observation’.

    Of course we can just stay the course and keep rotten teachers employed at high salaries because we have an irrational need to not hold teachers as accountable as pupils.

  16. Raymond Beverage

    Taking a different angle on this: the Military will be getting a 1.6% raise this year, and when it comes to Tricare for dependents and retirees, there will also be fee changes.

    With that 1.6%, an E-1 just joining will get $1,379 a month plus the three hots and a cot.

    Now, take a married E-4 with 3 years of service, and the pay is $2,157 a month, plus $1,416 for Quarters Allowance in NOVA (goes to pay rent or mortgage), plus a personal meals allowance $325.04 (I say personal as that is what it is for – feed thyself not thy family). So that E-4 with a wife and one or two kids gets $3,573 for pay and house, and then the meals allowance but keep in mind if he is on base, he either eats in the chow hall or buys from somewhere on base like Burger King.

    If he gets special duty pay (i.e. Navy Submariner or other), that is additional, but the average kid is getting the $3500 a month. Of course, his/her medical is free, and the dependents would be via Tricare (and depending on coverage, may have fee). On Tricare for the family, similar to what is occuring in private sector, and fits my maxim that “as Medicare goes, so goes Tricare” especially for retirees.

    Retirement? Social Security & FICA withheld, plus has to make it to 20 years. Commissary and Base Exchange privledges? Oh yes, let’s shop at limited selection places not always offering the best deal.

    Changes of disability? higher than most occupations. Chance of going out to have fun around the world? higher than most occupations. Chance of dying? higher than most occupations.

    Changes of being fined or tossed out on ear by Court Martial for not performing to standard? Hmmm, can’t equate to most occupations since Military Courts stricter standard than civilian.

    All the whining of public and private company employess just make a disabled Vietnam Era Veteran with 23 years and Master Sergeant Stripes just shake his head.

    1. @Raymond,

      I came to this area during the Vietnam War era and I brought home less than $400 a month. My apartment was $140 a month. Colonial Village.
      That military housing allowance looks pretty good to me. Remember that those Wisconsin teachers don’t have a housing allowance. Some of them have a starting pay of less than $3k a month.

      Maybe the grass is always greener on the other side. I will hand you the chance disability or death is higher for military than most professions if in combat but I am not so sure about cops. I have never known anyone in the military who would give up px or commissary privileges in favor of civilian.

      Cops have pretty high standards they have to stick to, especially under Charlie Deane. They don’t get in if they don’t pretty much have a spotless record. They don’t stay in if they don’t adhere real closely to a very high bar.

  17. @Moon-howler
    From what I understand, $58,000 a year is the average NJ teacher’s salary. I’m not sure what starting salary would be as it varies for degrees obtained and grade or subject taught.

    From what I can tell the debate isn’t so much about the increasing cost of benefits as many expected that and the increases don’t appears to be as draconian as I’d feared (though in some instances they very well could be, like the $24000 a year employee with the most expensive medical plan, assuming he’s in the 30% premiums bracket).

    The debate appears to be over loss of collective bargaining rights for medical and pension benefits in favor of a short term civil service type program. Public employee unions have expressed that ending bargaining for benefits means they will no longer be able to negotiate as effectively as they barter pension and medical benefits against salary increases.

    1. @Kim,

      Are we talking about NJ or Wisconsin?

    2. I can’t read. You have clearly said NJ. It surprises me that the salary is that low on average.

  18. Wolverine

    And the beat goes on. Montgomery County, Maryland, as liberal as they come around here, just passed a serious revision of the disability retirement system for county employees, including police — but not teachers, who are considered state employees. The county council bypassed the collective bargaining system, and the unions are mad as Hell about it.

    1. What was the revision? In Virginia, it is VERY difficult to get disability on VRS.

Comments are closed.