The Rockefeller Institute of Government at the State University of New York defines a government pension system that’s below 40% funded as in crisis. New Jersey’s pension system is well below that line, and the cost to fix the system, even under optimistic economic and financial-market projections, is already enormous. After a nine-year expansion, if America’s economy turns down in the coming months, the price of fixing New Jersey’s pension system will surge higher still. Yet even when the costs were considerably less, the state’s political leaders balked at fixing the system. We’ve now reached the point where neglecting to construct an adequate and lasting fix pushes the pension system on a path toward failure, a catastrophic scenario for New Jersey’s public employees and taxpayers.
Steven Malanga is the George M. Yeager Fellow at the Manhattan Institute and a senior editor at City Journal
Josh B. McGee is a senior fellow at the Manhattan Institute and vice president of public accountability at the Laura and John Arnold Foundation. In 2015, McGee was appointed to chair the Texas Pension Review Board by Governor Greg Abbott. Follow him on Twitter here.