Chris Christie can't afford to pay public teacher pensions... but still hands education megacorp $82m in subsidies
Last week, Gov. Chris Christie announced he will take $2.4 billion owed to New Jersey's public pension system and use it instead to balance the state's current budget.
To hear Christie tell it, he has no choice: the money simply isn't there. But one group for whom that might be hard to swallow is New Jersey's teachers -- particularly, I suppose, math teachers. After all, as public school teachers learn that their pensions won't be funded, education technology and publishing firm Pearson continues to receive a huge taxpayer subsidy from New Jersey.
Enacted in late 2012, the deal sees Christie's state giving Pearson a multi-year subsidy of up to $82 million. in other words, Christie is taking money from public school teachers to ensure that he can continue to support a giant education publisher. That’s particularly galling for teachers because Pearson just so happens to be one of the driving forces behind the push for more standardized testing and other so-called education “reforms” that many public school teachers and teachers’ unions vehemently oppose.
And that's just the first of several twists in the now completely tangled story of New Jersey's public pension system.
Here's another: A mere 4 days before announcing their pension raid, Christie officials approved a $225 million subsidy for JP Morgan, which just so happens to be a big donor to the Christie-run Republican Governors Association.
All these subsidies are part of Christie’s record $1.5 billion in corporate handouts. Add to that the estimated $1.2 billion in Wall Street fees from Christie’s high-fee, high-risk pension investment strategy, and you get a $2.7 billion hole blown through New Jersey’s finances. And whaddya know? That just so happens to be almost exactly the amount Christie is now borrowing from the pension fund to balance the budget.
Still, at least the New Jersey State Investment Council appears to be taking all these recent scandals seriously. Tomorrow the council meets in Trenton and one item on their agenda is a review of their Brokerage Firm Eligibility Policy: That is, the guidelines for choosing who gets to manage the state's public pension cash.
Does this mean the state is finally going to put an end to awarding lucrative pension contracts to firms connected to political donors? Uh... no. A closer look at the agenda shows the council will consider potential $100 million investments in two firms, Warburg Pincus and MHR. FEC records show that in the last two years, employees of those two firms have given the Republican National Committee (which devoted major resources to Christie’s election campaign) more than $134,000.
And so the story continues.
[illustration by Brad Jonas for Pando]