Asm. Ciattarelli Proposes New Pension Plan

NJ Spotlight News | September 1, 2015 | Politics
Ciattarelli says that he has a solution to the state's pension problem.

By Michael Aron
Chief Political Correspondent

Assemblyman Jack Ciattarelli thinks he has a solution to the state’s pension problem.

Instead of the state paying for teachers pensions, local governments would make the payment the way they do for police, firefighters, and local government workers.

“That’s a piece of the plan. We need a comprehensive reform plan that we can honor and afford,” said Ciattarelli.

Under his multifaceted plan, every town — even former Abbott districts — must pay at least 25 percent of its own school costs.

Towns could no longer offer school levy tax abatements to developers.

Teachers would have to give up Medicare Part B if their combined pension and Social Security exceeds $30,000 a year.

Those with less than 10 years in the system would have to switch into 401-K type plans.

And all teachers would lose so-called “Cadillac” health plans as defined and penalized by the Affordable Care Act.

“I’m asking all communities to pay for 25 percent of their school budget at the very least. I’m suggesting all communities cannot abate school property taxes on new development. If local policy makers want to abate new development, abate county and local taxes,” said Ciattarelli.

When asked if he is asking the former Abbott districts to pay more out of local property taxes, Ciattarelli said, “They can. I can give you examples of people that have moved into former Abbott districts that have exorbitantly low property taxes.”

“I think it’s well thought through. It parallels what the commission says in a number of respects,” said Tom Byrne.

Byrne serves on Gov. Chris Christie’s pension and benefits study commission.

“One thing he said that mirrors the commission is he said we have to change the health care benefits. Even the Obama Administration has said these benefits are so rich they’re gonna be taxed to the tune of hundreds of millions of dollars a year if we don’t do something,” said Byrne.

The League of Municipalities told us today it is skeptical that towns can find the savings that would offset additional pension costs.

The NJEA put out a statement saying the plan is “flawed…first, because it targets teachers specifically.”

And Assesmbly Speaker Vincent Prieto told NJTV News, “This plan means direct tax hikes on every town’s residents. Teacher pensions have always been done at the state level.”

Ciattarelli disputes that.

“The Supreme Court’s early June decision is the invitation that it’s time to do it differently,” he said.

He’s convinced there are savings to be had.

“I’ve done the math. This proposal generates at least $3 billion a year. And it does that by looking at a number of different areas,” said Ciattarelli.

Byrne believes the towns could make it work.

“The locals have been the good actors on this. They’re the ones who’ve been making their pension payments over the last 20 years when the state has not,” he said.

“The stars are in alignment. It’s a confluence of factors that produce an opportunity for us at the very least to add another $3 billion on top of the current budgeted pension payment,” Ciattarelli said.

Ciattarelli admits his plan is complicated. If fixing the pension system were easy, he says, it would have been done already.

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