Three New Governors Face Three Old Pension Disasters
Connecticut, Illinois and New Jersey are running out of time to fix their employee retirement funds.
Philip Murphy of New Jersey, J.B. Pritzker of Illinois and Ned Lamont of Connecticut.
Photographers: Sangsuk Sylvia Kang/Bloomberg (Murphy); Scott Olson/Getty Images (Pritzker); Patrick Raycraft/Hartford Courant/TNS via Getty Images (Lamont)
As far as the fiscal health of U.S. states is concerned, there’s Connecticut, Illinois and New Jersey, and then there’s the rest of the country. Each state has chronically underfunded pension plans, so much so that they have less than 50 percent of assets needed to meet future liabilities. They’re the only states with unanimous general-obligation bond grades below double-A from the three biggest credit-rating companies. They pay noticeably more to borrow than their neighbors.
They also share recent changes in their governor’s office in the most recent elections. Democrat Philip Murphy succeeded Republican Chris Christie in New Jersey in 2017; Democrat J.B. Pritzker easily knocked out Republican Bruce Rauner in Illinois last fall; and Dannel Malloy passed the baton to Ned Lamont, a fellow Democrat, in Connecticut in November. Needless to say, they’ve stepped into unenviable situations. By one measure, New Jersey has the worst business climate in the nation, which encouraged top taxpayers like David Tepper of Appaloosa Management to move to Florida. Connecticut and Illinois were among the few states to experience a net population decline in the year through July 2018, Census data show.