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On Thursday evening, the New Jersey assembly passed a landmark bi-partisan overhaul of the public employee benefit and pension system. The bill passed the assembly by a 46-32 vote with 14 Democrats voted with Republicans for the bill. Now all that is needed is a signature from Governor Christie who has already touted the success of the bill’s passage. Over the next 30 years the passage of the public benefit reform bill will save taxpayers of New Jersey $120 billion at a minimum as well as adequately fund the health pension system to a greater degree than it is at today. New Jersey Unions across the board have spent millions of dollars to fight this reform from Gov. Christie, arguing that they deserve to have taxpayers pick up the tab for their Cadillac health insurance and remarkable pension plans.
The passage of S-2937 is not only a win for taxpayers but also for public employees who will now see mandated payments of their pension and more choices of health plans at various costs.
Some of the highlights of this bill as detailed by NJ.com are:
Most importantly for state workers this law immediately improves the health of the pensions system, which at its current pace would be below 50 percent funding by 2040. In contrast, the passage of this law will fund the pension system by 80 percent come 2040. Obviously this law tremendously helps the taxpayer who currently pays both salary and benefit plans for nearly 500,000 public employees in New Jersey. More importantly, the mere idea of this legislation has had resounding effects at reducing the size of government in New Jersey. Between January and July of this year alone, nearly 15,000 public workers are expected to retire. In comparison, during the entire 2010, more than 20,000 workers retired. Hopefully this trend will continue to rise and individuals looking for work will think twice before joining the public sector.
New Jersey has one of the largest debts as percentage of GDP in the country, and this bill will not solve that problem. Further cuts are needed for government spending and unsustainable programs that have been implemented by a long list of big government spenders in the state. However passage of S-2937 is a step in the right direction as New Jersey tries to shrink the size of government and rein in spending.