September 24, 2006
New Jersey
A Great Place to Retire
It would be hilarious if it were not such a rip-off of New Jersey's
beleaguered taxpayers.
We're talking about the system that allows select public employees
to win pension rights for three, four and, in one extreme case, 11
jobs they have held over the course of their careers. Some of these
part-timers lawyers, municipal judges, assessors, even plumbers
will receive state pensions of $100,000 a year and more, in addition
to what they have earned in the private sector.
And all this is happening in a state that is seriously short of
money. As it approached the new fiscal year beginning last July 1,
New Jersey faced a $4 billion deficit, bridged only after a one-week
government shutdown and a subsequent increase in the sales tax.
Legislators in special session are now examining ways to permanently
reduce public employee expenses like health benefits and pensions so
that taxes can be stabilized.
Here's how the pension system operates: Professionals who work part-
time for multiple government bodies like town or county
governments and school boards win pension rights from each one.
Retirement benefits are not billed directly to local taxpayers, but
they affect the state budget, which in turn reduces the money
available for state aid to local schools and municipalities.
In many states, part-timers like these are treated as independent
contractors, and do not qualify for pensions. Not so in New Jersey.
According to a list released last month, the 50 top earners averaged
22 years of employment and qualified for pensions ranging from
$40,000 to more than $135,000.
Herbert Klitzner of Secaucus, for instance, made $227,000 as a
lawyer for North Bergen and the Union City school district. A public
employee for 25 years, Mr. Klitzner would qualify for a pension of
about $103,000 a year if he retired now. He told The Times that
pensions are an important inducement for those who work part-time in
public jobs. "You can make more money as a lawyer in private
practice," he said, "but you make it up with the benefits."
Gov. Jon Corzine and some lawmakers have called for major changes in
the state's pension system, including an end to the practice in
which part-time professionals qualify for enrollment in the regular
state pension system. But the change may be a hard sell in Trenton
because some legislators do exactly this sort of work, while others
wonder whether the system really makes all that much difference to
the state budget.
However, the fiscal crisis in New Jersey and the high taxes it
generates can only be corrected if the entire range of extravagant
spending practices is addressed. Another abuse, noted before on this
page, allows certain full-time officials to pile up unused sick and
vacation time, and then be paid for it when they retire. Some have
walked away with checks of $200,000 and more.
Until Mr. Corzine and the Legislature end these abuses, tax reform
will be nothing more than another New Jersey joke.
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