Steve Malanga on The Public Employee Pension System Crisis
Steve Malanga, Manhattan Institute Senior Fellow, sits down with Steve Adubato to discuss the one of the biggest problems facing New Jersey - a public employee pension system that is $90 billion short of what it is needed for future benefits. Malanga shares his thoughts on how he believes Governor Phil Murphy will handle this issue and the plans already in place to fix the crisis.
"Welcome to State of Affairs. I'm Steve Adubato. We are, in fact, coming to you from the Agnes Varis NJTV Studio in Newark, New Jersey. It is our pleasure to welcome, for the first time in this studio with us, Steve Malanga, Manhattan Institute senior fellow. Good to see you. Hey! How you doing? Let us disclose, we come from the same neighborhood... [laughter] ...in Newark, New Jersey. Yeah. And you were with us back in the day, early 90s if you...? Early 90s. Early 90s. With Caucus New Jersey, our... Mm hmm. ...the series we started with. Your views have not changed that much, but the world has changed around you. So I'm gonna get right to some of the issues that matter most. You're one of the smartest people I've ever met when it comes to tax policy. I say Trump tax policy that changes the corporate tax, the tax on wealthier folks, middle income folks, overall good for the people of the state of New Jersey? Yes, for a couple of things. First of all, I think it's been wildly exaggerated - who's gonna have to pay more in taxes? And I think a lot of Jersey residents are saying that. The fact of the matter is that what the media tended to focus on is the fact that we're gonna lose... we we're gonna lose the state and local deduction. Because New Jersey... we pay the highest property taxes... We pay taxes… ...in the nation. If you only can deduct... Right. ...10 grand? Right. You're paying 50 grand, 40 grand, 30 grand, you can't deduct it. Why isn't that good math? Because what they did is they left out all the good things. First of all, your tax rate went down. Second of all, the standard deduction is being doubled. Thirdly, the alternative minimum tax, which is... Explain what that means. Well that's very... look, basically, it's a tax. It was originally... The PBS version. Right. It was... [laughter] The fast version! It was originally targeted to rich people, but basically it came to include a lot of ordinary people. It's a way... basically what it does is it zeroes out your deductions. Hmm. It begins to reduce your deductions. So you have to pay more in taxes. So people were already, in New Jersey, losing some of those deductions. That's now gone away for most people in New Jersey. Here's the thing, I saw it's... I haven't seen a study in New Jersey, but there was a study in New York that..."