Senate President Steve Sweeney described New Jersey’s current fiscal reality as a “death spiral” at a town hall with Assembly Majority Leader Lou Greenwald, warning that New Jersey’s pension system is on track to bankrupt the state by 2023.
“If the pension system goes broke, we would have to come up with $8 billion of new tax dollars to pay the pensions,” Sweeney said.
The grim reality the lawmakers foresee includes state pension costs for teachers and other state workers projected to rise by $3.5 billion over the next four years. Health benefits will go up another $700 million, and without structural reforms, they say the state will face a $4 billion deficit.
“We have to have these conversations that we’re having right here about how to make government more efficient, how you change the burden that falls on your taxpayers on the pension and the health care benefits side and make it more affordable,” Greenwald said.
They presented plans from the Path to Progress report put together by a bipartisan group of policy experts with a goal of righting the state’s fiscal ship. Key recommendations include consolidating smaller school districts into regional districts and standardizing curriculum.
“What we found out was small districts spend 17 percent more than the highest spending districts in the state,” Sweeney said. “And the most alarming thing we found out, it was former Democrat Commissioner of Education Lucille Davy told us, if you have five districts going to a high school, they don’t coordinate curriculum. So when they get to ninth grade, some kids are here, some kids are here. And you know what they do? They bring them all down.”
Another recommendation: renegotiate the benefits packages for public workers, including moving them from a more expensive platinum plan to gold.
“Ninety-seven percent of all health care costs is borne by the taxpayers of the state of New Jersey — 97 percent. There’s not one state close to New Jersey. Not one anywhere near New Jersey in the cost of health care that we’re funding right now,” Sweeney said.
But it will be a hard sell, not just with public workers who are no fans of Sweeney, but with Gov. Phil Murphy, according to the Senate president.
“These issues that we’re talking about, that were highlighted today, he doesn’t want to talk about,” Sweeney said. “It’s not even necessarily against consolidation, pension and health care reforms. So what I’m doing is going to the public. You saw this was our first town hall meeting. We’ll be going throughout the state, not just in my backyard, and inviting people in to have this conversation to say ‘hey listen, there is a fix.'”
As for legislation, Sweeney hopes to have something to present in time for the budget address, which is only a few weeks away, but he seems braced for a long political fight ahead.