California

Two States, One Cup

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Separated at birth?

To the many similarities between New Jersey and California—the basic shape, the endured disapprobation of an uncomprehending country, the vibrant but little understood beach culture, the cowboy way—you can now add complete stupidity in managing public sector pensions.

The Garden State has been using sleight of hand to avoid funding its largest public-worker pensions since the beginning of this century. The Bond Buyer gets the details from the prospectus for a new state bond issue:

The preliminary official statement distributed ahead of the note sale indicated that the state only made $106.3 million in contributions to its seven pension plans for the fiscal year ending June 30, 2009, much less than the $1.047 billion that was included in the fiscal 2009 appropriations act and just 4.8% of the total actuarially recommended contribution of $2.231 billion.

Fans or haters of Reason's coverage of the Golden State's pension peccadilloes will recognize the pattern seen most recently in the University of California's failure to fund its own swollen pension commitments. But New Jersey also, like California, traces its crisis back to a catastrophically large increase in pension payouts enshrined nearly a decade ago, followed by a long period of denial and unrealistic expectations:

Specifically, the SEC said the disclosure fraud began in November 2001 when the Legislature enacted a law that increased retirement benefits for employees and retirees enrolled in the Teachers' Pension and Annuity Fund and the Public Employees' Retirement System by 9.09%.

However, the state resorted to gimmicks to "fund" the enhanced benefits, rather than increase cost of the benefits to the state or employees. Specifically, it revalued TPAF and PERS' assets to reflect their full market value as of June 30, 1999, at the height of the bull market. As a result, the documents essentially masked a $2.4 billion decline in the market value of the pension assets between 1999 and 2001, the SEC said.

That is, the last time New Jersey actually paid this enormous bill was during the administration of Christine Todd Whitman. As Hoboken's favorite son found out, when the cultures of the bicoastal sister states overlap, the results are usually grim:

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  1. Taaxxxppaaaayyyyyyyeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeers.

  2. Pension fraud. If it wasn’t the state legislaure doin it, people would be going to Club Fed.

    1. Imagine, if you will, a scenario where Chrysler gained 3% market share everytime its union went on strike. Or a grocery store chain further locked in or strengthened its customer base everytime its union got a raise.

      Government seems to be the only institution that not only encourages union growth among its employees, it actually seems to get more powerful with every new tentacle the public sector unions grow.

      The Government is the union, and the union is the government. My taxes increasingly amount to a pension contribution for someone elses retirement.

      1. “My taxes increasingly amount to a pension contribution for someone elses retirement.”

        In NJ, taxes pay you!

        I can’t wait to jump the river and get the hell out of here. Christie could save us, if the people would let him. We don’t tolerate stern father figures around these parts, though. We prefer the handout-daddy who will let us continue to pursue worthless college majors and countless careers, boomeranging back home whenever the money or enthusiasm or both dry up.

    2. Ezekiel 23:32-34

      “This is what the Sovereign LORD says:
      You will drink your sister’s cup,
      a cup large and deep;
      it will bring scorn and derision,
      for it holds so much.

      You will be filled with drunkenness and sorrow,
      the cup of ruin and desolation,
      the cup of your sister Samaria.

      You will drink it and drain it dry;
      you will dash it to pieces
      and tear your breasts.
      I have spoken, declares the Sovereign LORD.”

  3. The similarities don’t only end with the title of the article, at least in California. [no citation]

    The state has shit into a cup and are now force-feeding it to us taxpayers as if we are geese. I can only hope we are able to vomit it back up and force legislators in Sacramento into eating the shit turned into shit-vomit that they made us eat.

    No homo.

    1. Oh Lord, in your infinite wisdom, tell this man that vomit is food!

      1. You obviously haven’t seen the video.

        Might I refer you to the wikipedia page:

        2girls1cup

        1. sorry, bad link. Here ya go (safe for work):
          2 girls 1 cup

        2. Behold the true and magnificent glory of Spaghetti Jesus!

          1. What about that hipster artist in Chicago who cut her jeans and shoved a bunch of spaghettios (sp?)into her vagoo. It was on youtube but it’s gone now.

            I could look for a link is we can get a quorum on here. Otherwise, ED has an article on it.

            Enjoy…

            1. Oh god. I was just reminded of the “tentacle-vag” pic. Thanks Reason.

  4. Wow, that is some article title LOL

    Lou
    http://www.be-anonymous.at.tc

  5. Wow that is some article title there LOL

    be-anonymous.at.tc

    1. Of course, it’s no surprise that spam-bot knows its Internet memes.

      1. Rule 34, of course, dictates that there is anon-bot porn out there somewhere.

  6. Human society is a very much exists unfair society, there are gains for the government to take measures to deal with this phenomenon.

  7. I can only hope we are able to vomit it back up and force legislators in Sacramento into eating the shit turned into shit-vomit that they made us eat.

  8. How to Tub Girl and Goatse fit into the picture?

    1. Not sure about tub girl. Probably something about CalPERS feeding itself.

      As far as Goatse is concerned, I think it is a caption on the “How to” section of our state tax forms for 2010 regarding paying your taxes or claiming your refund. We’ll have to wait and see in January.

    2. And before you ask, Lemon Party is simply an artist’s rendition of a San Francisco city council meeting.

      No homo.

  9. California’s east coast sister state is Florida.

    New Jersey’s West Coast sister state is Alabama.

    Yes I know where Alabama is….citizens of New Jersey do not.

    1. I like how you enlarged N.J. 6x in the graphic so it doesn’t appear so wimpy next to CA. It’s rather like Babs Boxer having to stand on a box while debating Carly Fiorina. Or something.

  10. The reason that Frank’s “LA is My Lady” sucks is the same reason Frank’s “My Kind of Town” sucks: because “New York, New York” is where Frank really means it. He’s just phoning in the city love for all the other songs.

    1. I don’t know about that. On the reprise collection, My Kind of Town was perhaps the best song.

      Still, for a picture of Frank to be in an article whose title is a reference to a scat film is rather insulting.

      1. Frank is the Teflon Chairman of the Board; none of this can sully him. Shit, Kitty Kelley’s bio of him didn’t affect him at all. By the way, I wouldn’t recommend it. If I recall correctly, she said his mother was actually Irish, for fuck’s sake, among other stuff.

        Now, Albert Goldman’s Lennon biography…that is a hoot.

  11. Why aren’t the people responsible for this fraud being perp-walked for the cameras?

    1. Because they won’t be re-elected until November.

  12. Dude. Ew.

    A “percentage of these states that does not resemble Pac-Man” meme-call would have done that job just fine.

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  14. Threadjack:
    How Big Is the G.O.P. Tent?: Ignore the Liberaltarians

    “‘Liberaltarians’ … are social liberals and economic conservatives. … Liberaltarians predominate among the college-educated elite.”

    Discuss.

    1. The thing is, his logic is right on the money. Which is why libertarians are hated by both parties (yet they still want libertarian votes, of course), but also why they will never be viable allies. It sucks, but that’s tough shit.

      1. I’m more amused by the definition of “liberaltarian” and the idea that libertarians or their imaginary socialist counterparts are a dominant ideology among any subset of the population.

        And then there’s the cherry-picking of issues when the last two elections were decided on anti-war and anti-bailout grounds, however much those ended in tears. The US is receptive to certain libertarian ideals and unreceptive to others. That’s why Republicans keep on and on about the Constitution (whose 1st, 4th, 6th, 8th, 14th, etc. Amendments they don’t like too much).

        And then there’s him saying “college-educated elite,” as though a college education makes someone an elite. Or perhaps he’s just trying to distinguish from the high school-educated elite.

        And then there’s him pushing Republicans to use gay marriage as a wedge issue because Americans support discrimination there.

        And then there’s the strange assertion that libertarians support publicly funded abortions. Yes, and I also support mandatory gay marriages for senior citizens.

        I’m aware out-and-out libertarians don’t win elections, but he seems to be a very, very confused person.

  15. New Jersey and California deserve what they’ve brought upon themselves. I just wish they wouldn’t enforce their policies on visitors from places where people know better.

    On a lighter note: Try “opprobrium.” It flows better than disapprobation.

  16. ‘Liberaltarians’ … are social liberals and economic conservatives

    Just remember, when someone professes to be a social liberal and an economic conservative, what this means is that whenever their social liberalism clashes with their economic conservatism, the social liberalism wins.

    Really, saying you’re socially liberal and economically/fiscally conservative is just a long-winded way of saying you are a lefty.

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