Posted on 02/23/2011 4:06:51 AM PST by Huck
TRENTON, N.J. (AP) — New Jersey Gov. Chris Christie held fast to his national reputation for fiscal discipline amid the widespread financial crisis that's hit U.S. states, unveiling a $29.4 billion state budget Tuesday that calls for heftier contributions from state workers for pension and health care benefits.
Christie proposes paying $500 million into the state's severely underfunded pension system — the minimum required under a new state law to get the state to quit skipping its payments. But Christie, who's burnished national credentials as a take-no-prisoners fiscal conservative, says he'll make the payment only if the Democratic Legislature agrees to reforms that require government workers to delay retirement and pay more.
Union workers, a powerful Democratic constituency in a legislative election year, oppose the plan.
Christie's carrot-and-stick budget plan also targets public workers' health care. His plan calls for additional property tax credits to poor, disabled and senior households — but only if the Legislature significantly increases public workers' health insurance contribution.
Christie, who has made enemies with the powerful public teachers union since taking office 14 months ago, wants legislation that would push one-third of the cost of health insurance onto state workers by 2014, up significantly from the 1.5 percent of their salary they pay now. Christie would apply the $323 million in savings to property tax relief for low-income, senior and disabled homeowners.
Unions plan to rally at the Statehouse on Friday in support of public workers in Wisconsin, where protests have erupted over collective bargaining rights and public employees' benefits are among the issues raising ire.
In a speech last week at the American Enterprise Institute in Washington, Christie urged elected officials to follow his example in addressing spending and debt, and big-ticket items such as pensions and other benefits.
"It's time to do the big things — the really big things," Christie said.
In New Jersey, Democratic leaders in the Legislature complained that Christie, through his budget, pits one group of middle-class residents against another.
However, the League of Municipalities, an association of municipal mayors, says it's pleased Christie's budget proposal holds the line on spending and aid to towns.
Is there a good reason why he doesn't do that?
UAW Workers and their families
UAW Retirees and their families
Wisconsin public employees
All other Federal, State and Local Employees
What do they get and what do they pay? Do they have, in addition to exceptional health coverage, dental coverage, vision allowances, hearing coverage? What else?
http://www.state.nj.us/treasury/pensions/health-benefits.shtml provides access to the NJ health programs. Employees pay 1.5% of current salary ~ retirees appear to pay the whole enchilada. Worth digging through. Looks to be about half the price of the Wisconsin thing.
I'm not exactly sure why but I would think it has to do with NJ's tough state mandates. Which are law. I work for an insurance carrier, there are a handful of states we do not even try to do business in because state mandates are so high it's cost prohibitive to offer a plan like ours. NJ is top of the list. Along with NY, WA, OR, and MA. Start to see a pattern there?
You want cheaper insurance? Lift the federal and state regulations to allow fair competition. You'll see premiums drop. Fast.
EVERYTHING for federal employees is found at http://www.opm.gov/insure/health/ BTW, one of the reasons you don’t see ACTUAL NUMBERS on most of these threads where the question might come up about the federales is the propagandists prefer to be able to describe it as “plush”, or “fat cat”, or ...... well, take some word that leads you to believe it’s a whale of a lot of money. (Not that there are propagandists inhabiting these threads, but there are).
It's my suspicion that Christie doesn't care ~ he always found his own medical insurance plan difficult to deal with so he's not about to get involved in this one ~ just give him another 1.5% and he's happy.
Federales already pay 28% ~ which is more than 4 times what any of the NJ state people pay personally.
But I'm happy just to have a good job. :)
States are dealt with quite differently from private entities.
I think the tax laws should be made equitable so that EVERYONE's medical expenses are tax exempt.
My son's premiums come out of his after-tax income. Your premiums come out of your after-tax income ~ but you don't have to claim the employer's part as income. The government employees in Jersey pay what is probably the smallest share of premium possible to still be eligible to not have to claim any of the benefits from the premium as income!
This is a tax problem ~ not class warfare unless someone wants to get into that. Fix this tax problem and you'll cut the Obamistas and their running dog lackeys off at the knees. Fail to fix it and the Democrats will continue to growl and bellyache about how unfair everything is ~ even though their the ones benefiting from it!!!
I have. I'm a health insurance broker. I'm familiar with Federal as it applies to my business as well as the 43 states we do business in. Of the 7 we don't, NJ is one of them. It's just business.
IRS rules clearly provide that BENEFITS received are taxable as income unless the employee pays for the premium, so I'm going to assume there are a set of arcane rules that determine the break points where IRS automatically deems the premium to have been paid by the employees.
So maybe you can enlighten us on these matters.
I'd years ago figured out that state employee salary and benefit schedules were so divergent from jobs in the private sector for some taxable reason ~ and with competition being among states for this class of employee, they should all be doing something similar. So here we find the states all doing the same thing, and it's even different from the federal government ~ (which I know all about having dealt with that system for decades).
When it comes to benefits, it's in the Sec. 125 law. Particularly to how it defines what a benefit is. See the section on cafeteria plans. Also see the section of benefits in regards to collective bargaining agreements. But also think about how states and the fed government get revenue.
But basically you're confusing what pre-tax (Sec. 125) and post tax - (everything else) and employer contributions and how that effects your income for tax puposes - With how a state gov't operates as an employer.
Couple of different things there. If the benefit is paid pre-tax all Benefits are taxed on receipt EXCEPT health insurance. You're recieving a service instead of a monetary benefit like life insurance or short term disability. Gov't is getting their taxes off the transactions of the health insurance carrier and providers and all the ins and outs of the medical care businesss. Whatever State Rules apply to those benfits as well-Varies by the state. A rule of thumb here is helpful to readers on Sec. 125 plans. If the Benefit is taken PRE-Tax and the benefit is paid direct to you...you pay taxes on the benefit. If a benefit is paid with after-tax dollars and is paid directly to you, the benefit is not taxed. Again, except for health insurance. Doesn't matter if you buy insurance with pre or post tax dollars, you're not taxed on the actual value of what that service costs. There are a few other IRS laws that apply to medical services in regards to insurance (mainly to your benefit)...but not cash payments to you.
As an employer, you don't get taxed on the portions of the premium you pay for your employees, so you lower your taxable income as an employer. That will be decided by the employer and the carrier to the amounts and employer can and is willing to pay. But enough on Sec. 125.
The crux is a State gov't isn't a normal employer. It pays salaries with tax revenue, I don't believe soveriegn states pay a tax on the taxes they take to the feds. The feds gets their money from the citizens directly themselves. Even the state employees pay taxes, because that is then income. There's a whole philosophical argument to why gov't employees pay taxes at all...but that's a discussion for another night. So state employees still pay their normal taxes on their income.
So basically to a state government, there is no tax reasoning for the amounts it will pay to the employees benefits or in collective bargaining agreements. They aren't bound by the same business rules as well...a business. They pay salaries based on what the unions can suck out of them. It's all about what agreement they've reached. What's paying those premiums for state employees is you. It all depends on what deal the politicians struck. Which as you can see with what we got going on here, were some pretty bad deals. It sounds like you're looking at a state like a business, which it ain't in no way, shape, or form. Other than they both have revenue and expenditures.
The only way those state payments for medical insurance is subject to tax is if they pass the money through the employee's hands first ~ RIGHT?! if they were to just give the employees a raise sufficient to pay for their medical insurance directly, the employees would find a TAX INCREASE at the highest rate on that very same money that had earlier been used, tax free, to pay for their medical insurance.
BTW, I looked for the EXEMPTION for medical insurance, but the IRS site seems to have been "rewritten" ~ did Obamakkkare change some of this?
No, if the employees contribution is increased, it's still in Sec. 125 so the employees taxable income goes down so they actually might pay a little less in their taxes. So theoretically the state will loose whatever percentage (it will be a miniscule amount comparitively) of the taxes they receive back from the wages they just paid them. But the benefit to the state is an actual reduction of 1 to 1 for every dollar they cut for premiums and the employee picks up.
See it all started when state employees made crap salaries so the states enticed applicants with good benefits. The problems only came when their wages started getting better and better and the benefits kept getting better and more expensive at the same time. Now Gov't jobs are the "good" crappy jobs to get compared to the rest of us schlubs who just get to pay for it with our regular crappy jobs.
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