As Connecticut's massacre, Washington, D.C.'s fiscal cliff-hanger and Sandy's aftermath dominate headlines, yet another calamity looms.
New Jersey faces a $200 billion bill for upcoming pension, health benefit and infrastructure costs, according to a blue-ribbon panel whose findings were released on the eve of the Newtown shootings. Unfunded pension obligations alone total $84.8 billion.
The gloom-inducing 88-page report was published by the bi-partisan State Budget Crisis Task Force, co-chaired by former N.Y. Lieutenant Gov.Richard Ravitch and former federal reserve Chairman Paul Volcker. The panel is examining the budget perils of six large states.
Excerpts from the summary offer a bleak assessment of the Garden State's fiscal future, particularly with regard to education:
"Education aid to school districts in fiscal year (FY) 2013 totals $11.7 billion — 37 percent of all state spending. In just the last two years, spending on school aid, including retirement benefits for teachers (emphasis mine), has increased by $1.7 billion or 16 percent.
"In FY 2013 the state is budgeting $1.029 billion for pension contributions. The
annual contribution will have to increase by as much as $ 4.5 billion between 2013 and 2018, to an estimated $ 5.5 billion, depending upon investment returns and other factors. This estimated increase equals nearly 40 percent of the state’s annual spending on education aid (emphasis mine)."
The report also notes that "honoring pension promises will force New Jersey to make extraordinarily difficult choices."
Including, perhaps, whether retired teachers or current students should have priority.