At long last, New Jersey has enacted its first COVID-19 budget. In order for it to be “balanced,” the state will have to borrow $4.5 billion. Unfortunately, this borrowing will hurt the state’s already woeful fiscal condition by piling on more debt without addressing the underlying problems. Instead, the borrowed billions will be entirely consumed by a record $4.7 billion payment into our broken and unreformed pension system.

State Treasurer Elizabeth Muoio highlighted the negative impact on the state: “Think of what we could have accomplished with the billions and billions of dollars that have gone instead towards making up for years of skipped pension payments.” The bitter truth is that just when we need the money to support families and businesses devastated by COVID-19, billions of borrowed dollars will be used to make up for past pension underfunding.

Even worse, the state is throwing $4.7 billion of good money after bad. According to the Pew Charitable Trusts, New Jersey’s pension system ranks dead last among the states and has only 38 cents set aside for every dollar it owes. Sixty percent of these borrowed billions will go to the Teachers’ Pension and Annuity Fund (TPAF) — one of the single worst public pension funds in the nation. Even before COVID-19 hit, TPAF was only 27% funded. With COVID-19’s impact, the Center for Retirement Research at Boston College projects that TPAF will be insolvent by 2027. Thereafter, TPAF’s $4.5 billion-plus of annual benefit payments would have to be funded from the state budget. If things are bad now, they are going to get much worse: TPAF’s insolvency could drag the state down with it.

New Jersey citizens need to know the facts about how we got into this position. As documented in Sunlight Policy Center’s recent report “Ugly Truths and Hard Facts about New Jersey’s Pension Crisis, Part I,” TPAF is a case study in what happens when special interests exert too much influence over the law-making process.

Certainly, some of the blame rests with politicians of both parties, who put their desire for political office over the interests of the citizens who elected them. Yet the New Jersey Education Association (NJEA) wants to place all of the blame on the politicians and erase its own substantial role from history.

But the facts show that the NJEA was the most powerful special interest in the state during this time and used its political power to create the pension system it wanted. As NJEA President Michael Johnson said in 1998: “Our excellent pension system … [is] the result of hard-fought legislation and politics.”

Yet TPAF was not “excellent.” It was deeply flawed from the very beginning. The NJEA helped ensure that TPAF was the obligation of the state, which allowed TPAF’s true costs to be hidden by creating more and more pension debt. Governors Byrne, Florio and Whitman all tried to change this but the NJEA thwarted their efforts. Most importantly, in 1991, the NJEA buried Florio’s reforms by its unprecedented endorsement of 46 Republicans and only three Democrats, and helped flip the legislature from a Democratic majority to a Republican super-majority. Neither party forgot the lesson.

In the years after its 1991 victory, rather than use its political clout to secure its members’ pensions, the NJEA participated in political deals in 1992, 1997 and 2001 that undermined these pensions by using excess assets to substitute for regular contributions. So for seven out of the eight years from 1998-2005, the state put no new money into TPAF, leaving it highly vulnerable to the inevitable market downturns. The result: from 1997 to 2006, TPAF’s funding level dropped from 104% to 76%.

In 1997, the NJEA strongly supported the disastrous $2.8 billion pension obligation bond (POB) deal, which will ultimately cost over $10 billion. POBs were later banned by the legislature. As part of this deal, NJEA members gained the non-forfeitable right to their pensions so that their benefits could never be reduced. This caused the NJEA to believe that TPAF pensions were bullet-proof: no matter how great the accumulated pension debts, the state would always be on the hook to pay them off.

As a result, the NJEA did not hold politicians accountable for underfunding pensions. All during the time that TPAF’s soundness was being undermined, the NJEA was very active in state politics, with 90% of its endorsed candidates routinely winning elections. The NJEA used its clout to block substantial reform efforts in 2005, 2006 and 2008. Only when it lost the non-forfeitable right to pension funding in 2015 did the NJEA act to punish lawmakers for shortchanging pensions. By then it was too late: TPAF’s funding level was 29%.

New Jersey citizens must know the facts: the NJEA was perfectly willing to abide by TPAF’s underfunding so long as it believed the state was legally bound to pay off the pensions – heedless of the long-term costs to the state and its citizens. That bill is now coming due.

(This op-ed first appeared in Advance Media.)