The New Jersey pension system is underfunded by tens of billions of dollars. Previous administrations–both Democratic and Republican–with the consent of the Legislature did not fulfill their fiduciary obligation to adequately fund the retirement benefits of state workers and public school teachers. Pension reform is on the way. There is no other choice for the Christie administration and the Legislature; they have to reduce pension benefits for new hires (raise the retirement age to 65, for example), make adjustments in current benefits (increase the retirement age over the next ten years) and make the appropriate contributions to shore up the pension system (reduce spending in parts of the state budget in order to contribute to the pension system).
New Jersey is in this mess because past administrations and legislatures did not fund the state pension system. For their misfeasance, Governor Christie should end the pensions for all state legislators and previous governors. He should send a clear message: If you screw up, there are consequences. Would this be legal? In New Jersey the “rule of law” has been trashed by the Supreme Court for decades. Governor Christie, just do it.
At the county and municipal levels, elected officials should not have pensions. Virtually all these positions are part time, which means they probably have a full-time job or career. They should rely on their primary livelihood for their pensions. The public sector gravy train must stop, and now is the time to roll back the cost of government. Taxpayers need a break.
As far as school funding is concerned, the governor’ should announce unequivocally: the income tax has been a total failure in holding down property taxes. The income tax should be abolished, and local resources should be used to pay for the cost of local schools.
The best “reform” would be to end school property taxes and replace them with tuition, fees, and grants. This would put the cost of education squarely on the shoulders of parents who have children in local government schools. Then we will see more efficient schools. Consuemers demand efficiency, and the best way to make schools both efficent and accountable is for parents to have a greater stake in the cost of education.
Parents who send their children to religious schools, independent schools or home school should not have to pay for the education of other children. And seniors, childless couples and singles would also no longer have to pay for the education of other children. School property taxes for these groups would be zero.
Justice demands that people pay for what they “consume,” and not be forced to pay for services they do not consume. The new funding “formula” can be phased in over five to ten years. But it should begin for the next fiscal year, say with a ten percent tuition charge in all local schools.
What about the Abbott school districts? As Governor Christie said on CNBC this morning, “hard choices” have to be made. Local schools should be the responsibility of local officials, teachers, administrators and parents. The position of school superintendent and allied staff should be abolished and teachers, principals and administrators should be held accountable by parents.
The tax, spend and borrow paradigm is kaput. It is time that New Jersey and the rest of the nation implement sound financial and management practices. That means abolishing ending collectivism at all levels of society and embracing free enterprise once again so prosperity can be shared by everyone.