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1 1 (October 2016)

handle is hein.amenin/aeiaanu0001 and id is 1 raw text is: Key Points * NewJersey's state-run retirement system is among the worst in the US, ranking New Jersey last among the states in long-term fiscal solvency. * The New Jersey Education Association's (NJEA) political power led to the state's pension crisis because it influenced pension legislation and kept responsibility for pensions at the state level. * The NJEA now wants to pass a constitutional amendment that would stick NewJersey taxpayers with the $95 billion consequences of the failed pension system. Protecting and enhancing members' pensions and benefits has been Job Number One fbr NJEA since 1896. -NJEA President joyce Powell, 2oo6 The New Jersey Education Association has lived up to President Joyce Powell's words in zoo6. Just ask the New Jersey Senate President-and ex-gubernatorial hopeful-Stephen Sweeney. 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 $i trillion in unfunded pension liabilities, but New Jersey's problems are among the worst. Only Illinois' and Kentucky's public pensions are in worse condition.' Yet the 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 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. How big is the bill? Under new, more realistic accounting standards, the total amount of the state's unfunded pension liabilities is $95 billion ($16o billion if health benefits are included)?2 The entire state budget is $35 billion. This is why the Mercatus Center ranks New Jersey dead last among states in long- term fiscal solvency and why New Jersey has the second-lowest bond rating of any state (above only Illinois).3 Passing the amendment without any reform would condemn the state and its citizens to a bleak future. The NEs aot How did New Jersey get into this situation? The NJEA would have you believe the state is at fault AMERICAN ENTERPRISE INSTITUTE

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