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The Record - Analysis: Health costs are key to Christie’s pension repairs
MARCH 5, 2015, 10:56 PM LAST UPDATED: THURSDAY, MARCH 5, 2015, 11:01 PM
BY MELISSA HAYES
STATE HOUSE BUREAU |
Teachers, police officers, state employees, county and municipal workers and even retirees would have to agree to changes in their health care coverage to free up money that would then prop up retirement benefits under a plan Governor Christie has endorsed, an analysis of the plan showed.
It’s unclear, however, just how that would work. And there are concerns that residents could be facing bigger property tax bills if the state shifts its responsibility to pay teacher pensions to local school boards as the plan proposes.
“It’s a kaleidoscope of change,” said Bill Dressel, executive director of the New Jersey State League of Municipalities. “There are so many moving parts to this. There’s many union contracts, and those dates would have to be reconciled. I think that there’s going to have to be very comprehensive analysis of all these things that’s going to have to be taken into consideration.”
Christie focused much of his annual budget address last week on the “unprecedented accord” he had reached with the New Jersey Education Association – one of his biggest political foes – to work on additional changes to state pensions and health benefits. But the plan, which calls for freezing existing pensions and introducing retirement plans that are more in line with private-sector benefits, also relies on everyone in the state’s two health-benefits plans to agree to changes that would include having them pay more toward the premiums.
Any savings the state and local governments realize from those shifts, estimated at $1.9 billion, would be put toward the state’s unfunded pension liability under the plan – but the report stresses the benefits “can only be realized if these local savings are realized.”
There are 885,000 employees, retirees and their dependents enrolled in either the State Health Benefits Plan or the School Employees Health Benefits Program, according to a report from a special commission appointed by Christie. The vast majority of municipal and county employees – 180,487 – are not enrolled in state health plans, but 42,297 local workers are. On the education side, 95,678 employees are enrolled in state plans and 57,780 are in other plans.
In its report, the commission notes that the existing state health plans are more generous than the “platinum” level plan offered under President Obama’s Affordable Care Act. It suggests setting the standard for coverage closer to the act’s “gold” level, to avoid paying federal surcharges that will start in 2018 for having so-called Cadillac plans. Workers would be asked to pay an average 25 percent of the premium cost, up from the state’s average employee contribution of 18 percent. The “gold” level plans also come with higher copayments.
In his budget address, Christie set a June deadline for identifying health care savings. If that is not met, he won’t push for a November ballot question that would constitutionally mandate set payments by the state toward the unfunded pension liability, something the unions want. Christie and earlier New Jersey governors have cut that funding; an amendment would end the practice.
Democratic state Sen. Paul Sarlo, who is chairman of the Senate Budget and Appropriations Committee, said he’s concerned about the governor’s aggressive timeline.
“Everybody is focused on the teachers. It’s not just the teachers,” said Sarlo, D-Wood-Ridge. “Every collective bargaining agency that deals with public entities has to make the transition in order for this so-called proposal to work. There’s just way too many moving parts.”
The state, counties and towns negotiate their contracts – including health care coverage – at different times, so it’s unclear how everyone would be shifted at once and within the next year. There is also the added confusion for the many towns and school districts that don’t use the state plans. Those communities wouldn’t realize any cost savings, so it’s unclear how they would get money to cover the pension costs they’d be assuming from the state.
The New Jersey School Boards Association has yet to take a position on the proposal but has concerns about school districts being asked to take on retirement payments and assume the cost of lifetime health benefits, both of which have been covered by the state.
State Senate President Stephen Sweeney, D-Gloucester, said if he were a municipal or county official he’d want to use any savings to make his own pension payments, instead of giving it to Christie to make state pension contributions.
“Why would I turn those savings over to him when it’s not his money?” Sweeney said.
Sarlo, who also is mayor of Wood-Ridge, which participates in the state plans, questioned how local governments that aren’t in the state health plans, and therefore wouldn’t realize savings, could be expected to take on added pension obligations.
“The savings is going to be a benefit to the municipality, if they get one,” he said. “Those who don’t, there’s going to be a cost. There could be winners and losers here.”
The commission said towns should be willing to share some of that savings.
“Given the dire need, the extent to which state funds already pay a significant role in funding local benefits, and the fact that local savings would not exist but for statutory and constitutional reforms intended to address the state-level crisis, the commission believes that it is appropriate to dedicate these local savings to help close the state and local pension funding gaps,” the commission wrote in the report it released last week.
The commission said its plan would be tax-neutral, but communities like Fair Lawn that aren’t in the state health care fund aren’t sure what the proposals mean for them.
“You have to look at it in-depth and see what’s happening,” Fair Lawn Mayor John Cosgrove, a Republican, said of the proposal. “I do know that we have to do something. You can’t continue not to fund the pension plan; people paid money into it. We need to fund it and get it back on track.”
Cosgrove said any plan changes would have to be approved by the municipal workers.
“I listened to the speech and I want to know more as far as how can we come together,” he said. “Government, unions, people – we’re all going to have to come together to solve these problems.”
Sweeney said he’s also concerned the state is again asking employees to pay more, when they are already making significantly higher health care and pension contributions under 2011 reforms, while the state hasn’t lived up to its end of that agreement. Sweeney was a sponsor of that 2011 legislation, which Christie signed into law.
The governor agreed to step up annual payments into the state pension funds in 2010 as part of those negotiations. But in 2014 he slashed the state’s contribution, citing a revenue shortfall. Christie cut the payment in the current budget from $2.5 billion to $681 million for the same reason, but the unions sued and a judge ruled last week that the state is constitutionally obligated to make the payments. Now he’s proposing a $1.3 billion payment for the next fiscal year, when the phased-in increases would require a $3.1 billion payment. Fourteen public employee unions announced Monday they plan to file a lawsuit challenging the proposal for the coming fiscal year.
Sweeney said he’s willing to work with the teachers, whose pensions are funded by the state and are facing the largest unfunded liability. But Sweeney, a union official himself and one of several Democrats said to be considering a run for governor, said he’s unwilling to allow the state to impose changes on the other unions without their consent.
In his speech last month, Christie embraced the proposal as a “national model” and set a June deadline for identifying health care savings with the teachers before he asks lawmakers to put a public question on the ballot that would constitutionally require the state to make pension payments going forward.
Star Ledger - 7 things you should know about N.J.'s proposed teacher standards
By Adam Clark | NJ Advance Media for NJ.com
Email the author | Follow on Twitter
on March 06, 2015 at 7:15 AM, updated March 06, 2015 at 8:11 AM
TRENTON —New Jersey's Department of Education is asking for changes to the standards aspiring teachers must meet before earning their certificate.
The proposal, which would also affect substitute teachers, requires approval from the Board of Education later this year.
The state says the standards will raise the bar for entry into the teaching profession and ensure preparation that supports high-quality instruction. But some in the education community have warned of unintended consequences.
Here are seven things you should know about the state's proposal.
1. More time student teaching: The proposal extends the required time for student teaching from one semester to two, beginning in 2017. The semesters would have to be completed consecutively and the teacher candidate would be required to spend time in a special education setting.
2. A longer wait for lifetime certification: Teachers can currently earn their lifetime certificate in New Jersey after one year on the job, including three observations by a principal. The proposal would extend this provisional period to two years and require teachers to have at least two years of effective performance ratings to obtain a lifetime certificate.
3. More education for substitute teachers: Today, New Jersey substitute teachers need to have earned 60 college credits. Under the proposed changed, future substitutes would need a bachelor's degree.
4. Mentorship for long-term substitutes: Schools are not required to provide mentors for long-term substitutes now, but they would have to within 20 days of a long-term sub starting under the state's proposed regulations.
5. A secure database of qualified substitutes: This does not exist today, but would be created if the regulations pass.
6. Stricter rules for alternative route teachers: Non-teachers looking to transition into a career in education must currently complete one year of training, according to the state. The required elements of that training can be completed using as many different service providers as the candidate wants.
The state proposes making those teacher candidates complete that training program from start to finish with the same provider. New Jersey also wants to extend the training period for alternative route teachers from one year to two.
7. Higher standards for out-of-state teachers: Today, almost any out-of-state teacher who has a teaching certificate receives the equivalent certificate in New Jersey, according to the state.
Under the proposed changes, alternative route candidates from out of state would be required to meet the same requirements as an alternative route teacher candidates in New Jersey. And candidates graduating from traditional educator preparation programs in other states would be issued an initial certificate, but must pass a performance assessment before getting a lifetime certificate.
Teachers who have worked in other states and hold lifetime certificates would need evidence of at least two years of effective performance to obtain the same certificate in New Jersey.
These are just a few of the changes. For more details on the proposal, view the state's presentation to the Board of Education.
Adam Clark may be reached at adam_clark@njadvancemedia.com. Follow him on twitter at @realAdamClark. Find NJ.com on Facebook.
NJ SPOTLIGHT - WINTER STORM STALLS PARCC TESTS – AND DEBATE OVER THEIR FUTURE USE IN NEW JERSEY…Snowed in? Try tackling some sample questions from the 3rd-grade language arts exam
JOHN MOONEY | MARCH 6, 2015
Yesterday’s snowfall put this week’s statewide launch of the new PARCC testing in the deep freeze – only about 2,000 students took the tests yesterday, compared to a quarter-million two days before.
And the late-winter storm also stalled the state Legislature’s action on a key PARCC-related bill -- the Assembly education committee had been scheduled to consider a proposed statewide policy for families choosing to have their children “opt out” of the controversial tests.
That proposal will surely be taken up again, but it already faced long odds in the state Senate. Neither that bill nor another more significant Assembly bill that would delay the use of the test results in school or teacher evaluations have even been posted in the Senate for a hearing.
Senate President Steve Sweeney said this week in an interview with NJ Spotlight that he was waiting on both bills until the Senate education committee meets with state Education Commissioner David Hespe. The meeting is tentatively planned for next Thursday, he said.
“What I’ve been reading is that (the testing) has been a relative non-event compared to all the hype at this point,” Sweeney said. “I want to know what the commissioner says, and we’ll make a decision. Maybe it is the right thing to do, but I want to get that from the commissioner.”
In the meantime, despite the wintry weather, NJ Spotlight continues this week’s daily sampling from PARCC’s practice exams. Yesterday, we ventured into middle school math, but now it’s time to return to language arts, this time with a sample question posted to third-graders, the youngest students taking the tests.
The exercise asks students to read two stories and answer multiple-choice questions from what they read and to write an essay. The following are questions from the first story, as well as the essay question.
Introduction
Today, you will read two stories titled “Johnny Chuck Finds the Best Thing in the World” and “Me First.” (Editor’s note: Only the first story is reprinted below).
As you read, think about the actions of the characters and the events of the stories. Answer the questions to help you write an essay.
Passage
Read the story titled “Johnny Chuck Finds the Best Thing in the World.” Then answer the questions.
“Johnny Chuck Finds the Best Thing in the World,” by Thornton Burgess
1 Old Mother West Wind had stopped to talk with the Slender Fir Tree.
2 “I’ve just come across the Green Meadows,” said Old Mother West Wind, “and there I saw the Best Thing in the World.”
3 Striped Chipmunk was sitting under the Slender Fir Tree and he couldn’t help hearing what Old Mother West Wind said. “The Best Thing in the World—now what can that be?” thought Striped Chipmunk. “Why, it must be heaps and heaps of nuts and acorns! I’ll go and find it.”
4 So Striped Chipmunk started down the Lone Little Path through the wood as fast as he could run. Pretty soon he met Peter Rabbit.
5 “Where are you going in such a hurry, Striped Chipmunk?” asked Peter Rabbit.
6 “Down in the Green Meadows to find the Best Thing in the World,” replied Striped Chipmunk, and ran faster.
7 “The Best Thing in the World,” said Peter Rabbit, “why, that must be a great pile of carrots and cabbage! I think I’ll go and find it.”
8 So Peter Rabbit started down the Lone Little Path through the wood as fast as he could go after Striped Chipmunk.
9 As they passed the great hollow tree Bobby Raccoon put his head out. “Where are you going in such a hurry?” asked Bobby Raccoon.
10 “Down in the Green Meadows to find the Best Thing in the World!” shouted Striped Chipmunk and Peter Rabbit, and both began to run faster.
11 “The Best Thing in the World,” said Bobby Raccoon to himself, “why, that must be a whole field of sweet milky corn! I think I’ll go and find it.”
12 So Bobby Raccoon climbed down out of the great hollow tree and started down the Lone Little Path through the wood as fast as he could go after Striped Chipmunk and Peter Rabbit, for there is nothing that Bobby Raccoon likes to eat so well as sweet milky corn.
13 At the edge of the wood they met Jimmy Skunk.
14 “Where are you going in such a hurry?” asked Jimmy Skunk.
15 “Down in the Green Meadows to find the Best Thing in the World!” shouted Striped Chipmunk and Peter Rabbit and Bobby Raccoon. Then they all tried to run faster.
16 “The Best Thing in the World,” said Jimmy Skunk. “Why, that must be packs and packs of beetles!” And for once in his life Jimmy Skunk began to hurry down the Lone Little Path after Striped Chipmunk and Peter Rabbit and Bobby Raccoon.
17 They were all running so fast that they didn’t see Reddy Fox until he jumped out of the long grass and asked:
18 “Where are you going in such a hurry?”
19 “To find the Best Thing in the World!” shouted Striped Chipmunk and Peter Rabbit and Bobby Raccoon and Jimmy Skunk, and each did his best to run faster.
20 “The Best Thing in the World,” said Reddy Fox to himself. “Why, that must be a whole pen full of tender young chickens, and I must have them.”
21 So away went Reddy Fox as fast as he could run down the Lone Little Path after Striped Chipmunk, Peter Rabbit, Bobby Raccoon and Jimmy Skunk.
22 By and by they all came to the house of Johnny Chuck.
23 “Where are you going in such a hurry?” asked Johnny Chuck.
24 “To find the Best Thing in the World,” shouted Striped Chipmunk and Peter Rabbit and Bobby Raccoon and Jimmy Skunk and Reddy Fox.
25 “The Best Thing in the World,” said Johnny Chuck. “Why I don’t know of anything better than my own little home and the warm sunshine and the beautiful blue sky.”
26 So Johnny Chuck stayed at home and played all day among the flowers with the Merry Little Breezes of Old Mother West Wind and was as happy as could be.
27 But all day long Striped Chipmunk and Peter Rabbit and Bobby Raccoon and Jimmy Skunk and Reddy Fox ran this way and ran that way over the Green Meadows trying to find the Best Thing in the World. The sun was very, very warm and they ran so far and they ran so fast that they were very, very hot and tired, and still they hadn’t found the Best Thing in the World.
28 When the long day was over they started up the Lone Little Path past Johnny Chuck’s house to their own homes. They didn’t hurry now for they were so very, very tired! And they were cross—oh so cross! Striped Chipmunk hadn’t found a single nut. Peter Rabbit hadn’t found so much as the leaf of a cabbage. Bobby Raccoon hadn’t found the tiniest bit of sweet milky corn. Jimmy Skunk hadn’t seen a single beetle. Reddy Fox hadn’t heard so much as the peep of a chicken. And all were as hungry as hungry could be.
29 Half way up the Lone Little Path they met Old Mother West Wind going to her home behind the hill. “Did you find the Best Thing in the World?” asked Old Mother West Wind.
30 “No!” shouted Striped Chipmunk and Peter Rabbit and Bobby Raccoon and Jimmy Skunk and Reddy Fox all together.
31 “Johnny Chuck has it,” said Old Mother West Wind. “It is being happy with the things you have and not wanting things which some one else has. And it is called Con-tent-ment.”
(“Johnny Chuck Finds the Best Thing in the World” from Old Mother West Wind by Thornton Burgess, 1910.)
1. Part A
What does "cross" mean as it is used in paragraph 28 of “Johnny Chuck Finds the Best Thing in the World”?
A. excited
B. lost
C. upset
D. scared
Part B
Which statement best supports the answer to Part A?
A. “. . . ran this way and ran that way . . .”
B. “. . . hadn’t found the Best Thing in the World.”
C. “. . . they started up the Lone Little Path . . . .”
D. “They didn’t hurry now . . . .”
2. Part A
How do the details in the story show the idea of “Con-tent-ment”?
A. through describing what Johnny Chuck does at his home
B. through the question that Johnny Chuck asks in the story
C. through the explanation of the animals’ hunger after their search
D. through the listing of all the animals that join the group
Part B
Which detail from “Johnny Chuck Finds the Best Thing in the World” supports the answer to Part A?
A. “By and by they all came to the house of Johnny Chuck.”
B. “. . . played all day among the flowers with the Merry Little Breezes of Old Mother West Wind . . .”
C. “. . . Striped Chipmunk and Peter Rabbit and Bobby Raccoon and Jimmy Skunk and Reddy Fox ran this way and ran that way over the Green Meadows trying to find the Best Thing in the World.”
D. “Peter Rabbit hadn’t found so much as the leaf of a cabbage.”
3. Old Mother West Wind and the Sandwitch (from the other story, “Me First,” by Helen Lester) both try to teach important lessons to characters in the stories.
Write an essay that explains how Old Mother West Wind’s and the Sandwitch’s words and actions are important to the plots of the stories. Use what you learned about the characters to support your essay.
Here are yesterday’s answers from the 8th-grade sample math question:
- -1
- There are multiple correct responses. For example:
3. A. Maximum score if includes the following two elements:
- Correct amount of each payment, $80.73
- Valid work shown or explanation given
Sample Student Response: The discounted price is 75% of the original price, so I need to multiply the original price by 0.75. Then, I will multiply that amount by 0.08 to determine the sales tax. Adding the two together will give me the total price of the computer. I then divide the total price of the computer by 6 to determine the six monthly payments.
$598.00 x 0.75 = $448.50 $448.50 x 0.08 = $35.88 $448.50 plus $35.88 = $484.38 total cost $484.38 divided by 6 = $80.73 per month
- B. Maximum scores if includes the following four elements:
- Correct total price of the different computer, $602.64
- Valid work or explanation given
- Correct original price of the different computer, $930.00
- Valid work or explanation given
NJ SPOTLIGHT - OPINION: TIME FOR NJEA TO SEIZE THE MICROPHONE ON HEALTH BENEFITS, PENSIONS…The union is wasting its time and making leaders look like wimps by denying the 'joint accord' mentioned by Christie in his budget address
"If something cannot go on forever, it will stop," said pragmatist Herbert Stein, and the New Jersey public employee pension system appears to have hit that wall. Last week the bipartisan Pension and Health Benefits Study Commission declared that “the situation is not only getting worse, but is also fast approaching the point at which it will be beyond remedy.”
So what’s the cure for a pension system that Mark Magyar describes on this website as a “fiscal basket case?”
It’s the “Roadmap to Resolution” that was “jointly drafted” by the fiscal experts that make up New Jersey’s Study Commission and, apparently, leaders of New Jersey Education Association, whose members have the most to lose. This mind-meld ismemorialized in a document signed by commission members Thomas Healey and Raymond Chambers, and NJEA President Wendell Steinhauer and Executive Director Edward Richardson. Gov. Chris Christie made this “unprecedented accord” the keystone of his budget speech last Tuesday.
Now the NJEA is in a bind and the front office is popping out retractions like candy through a Pez dispenser. This makes its leadership look weak. But the NJEA can turn this around by taking a page from its own playbook. Back in 2012 when the state Legislature was debating new tenure laws, the union nimbly preserved an old form of job security (LIFO) by presenting its own tenure reform plan and, eventually, lawmakers adopted the NJEA version almost whole-cloth. Now NJEA has a similar opportunity to propose its own pension and health-benefits reform bill that acknowledges the grim reality described by the commission but maintains some semblance of the benefits its members enjoy.
This venture will, at first, be a lonely enterprise. Gov. Chris Christie is on his quixotic quest for the White House and desperate to resurrect his erstwhile popularity. He’s got no skin in this game. His strategy is to salute the commission’s report in the hope that it will make him look once again tough-minded and consensus-building. NJEA’s disavowals of accord only elevate his crusader narrative.
The other major player on the scene is Senate President Steve Sweeney, who is ogling that vacancy in the governor’s office in 2017. In order to beat back an opponent like Jersey City Mayor Steve Fulop, he’ll need to fully muster union support, especially after his fall from grace during the passage of the 2011 pension reform bill. (Then-NJEA President Barbara Keshishian bridled, “If you are a teacher in New Jersey, the message from Chris Christie and Steve Sweeney is chilling: ‘Don’t expect a raise”; the union even withheld its endorsement from him during that year’s election.)
Now Sweeney’s strategy is to play savior and build support from labor unions who have forgiven him for past misdeeds. After the budget speech when Christie trumpeted that “unprecedented accord” between fiscal experts and NJEA leaders, Sweeney told reporters, “What you heard today was no plan to fix the economy, what you heard is -- I don’t know what you heard. It was nothing,” And, “(Christie) tried to hurt them, what he did was an attempt to hurt their credibility. He really did a number on them today.”
Maybe that’s true. Maybe Christie did do a number on them. But it’s not too late to seize control of the narrative, as well as members’ retirement and healthcare security.
First, though, union leaders have to acknowledge the math. State balance sheets reflect $83 billion in unfunded liabilities, which by 2016 will require $4.3 billion in annual payments in order to secure full funding for retirees, as well as another $3.7 billion per year to cover premiums for health benefits.
“We stand at a crossroads,” the fiscal experts who make up the commission warn. One path points towards a “road of ruin” that portends pension insolvency or 29 percent across-the-board income tax increases. The second path, paved with concessions that make NJ’s 2011 pension reform bill look like candy corn, leads to the preservation of employee-deferred compensation and healthcare. “The need for urgency in adopting a solution cannot be overstressed,” the commission intones. “The already narrow window for a reasonable solution is closing fast.”
(Last week’s court ruling that requires the state to make an additional $1.57 billion payment into the pension fund has no significant impact on the depth of the pension hole.)
So the commission recommends a six-part plan that the NJEA either did or didn’t sign onto. Elements include freezing the current state and local pension plans (members would keep benefits credits earned before the freeze); creating new retirement plans and health-benefits plans that mirror stable private-sector plans; transferring both the old and new plans to a trust managed by NJEA; and requiring school districts to pick up the tab for pension contributions that have always been paid by the state, presumably through savings accrued through more modest healthcare plans. Implementation would require legislative passage of a constitutional amendment by early August in order to skirt the ban on reducing contractual benefits and, then, a public referendum.
So not happening, right? But other ideas, like the widely-touted millionaire’s tax or the legislated state payments that don’t reflect the depth of the pension system’s insolvency, do nothing to address the commission’s unassailable math. There’s no quick fix here, only radical reform.
Hence, the NJEA’s opportunity. Acknowledge the numbers. Make concessions when necessary to protect members’ retirement funds. Engage in debate and educate the public on pension reform, just like back in 2012 during productive discussions about necessary and inevitable changes to tenure law. Propose a substantive, data-driven, reality-based plan to preserve members’ retirement and health benefits. In doing so, union leaders will once again look like warriors, not wimps.
Laura Waters writes about education politics and policy for NJ Spotlight and other publications. She also blogs at NJ Left Behind and has been a school board member in Lawrence Township (Mercer County) for 10 years.
