All state assets are on the table – buildings, roads, bridges, parks, transit facilities, air rights, naming rights — the list goes on.
The New Jersey State Treasurer has put out a request for qualifications, or RFQ, for a state asset financial adviser who can review the state’s assets and determine the value of them through potential “sale, lease, transfer, securitization, or other types of transactions.”
It’s all in effort to fund the public worker pension system and other post-employment benefit obligations. The state treasury’s most recent debt report from fiscal year 2017 shows a $115 billion pension hole.
State Treasurer Elizabeth Maher Muoio acknowledged “New Jersey faces many fiscal challenges” in a statement, adding, “we designed this RFQ to explore tangible, creative solutions to help maximize the state’s assets in order to minimize the burden to taxpayers.”
Senate President Steve Sweeney praised Gov. Phil Murphy, saying, “leveraging state assets to lower the unfunded liability in the pension system is one of the major recommendations in the Path to Progress report we issued last August.”
Using assets to plug holes is not a new concept. Former Gov. Chris Christie shifted the lottery to the pension system.
But Assembly Minority Leader Jon Bramnick says a key distinction is the state did not sell the lottery – it allocated revenue from the lottery to go into the pension system.
“This reminds me of, you have a house, and you have debt, and instead of figuring out how to save money, you sell your house. You sell your house only as a last possible resort when you have no other option. We’ve got plenty of options in the state,” Bramnick said. “But the Murphy option is sell assets. Dangerous. And the public is going to reject it.”
Bramnick gave the example of Gov. Jon Corzine looking into privatizing highways. People got nervous about potential toll hikes, and the plan was dropped.
Responses to the RFQ are due by Feb. 22. At that point, he state will pick one or more advisers after interviewing the top firms.