BUSINESS & ECONOMY

Senate president’s group proposes ambitious economic, fiscal reforms

BY Michael Hill, Correspondent |

Senate President Steve Sweeney put together an Economic and Fiscal Policy Review Committee of lawmakers, academics and private sector experts to say New Jersey must change course in many areas including funding for public pensions.

“We’re not screaming fire and it’s false. We will not be able to fund the programs that we care about — we will fund government and nothing else but government,” Sweeney said.

Among the group’s 80-plus recommendations:

  • Shift new state and local government employees and those with less than five years of service to a hybrid system to help address the state’s ballooning billion-dollar pension liability
  • Shift health coverage from platinum to gold
  • Require new retirees to pay the same percent of the premiums as when working
  • Cap huge payouts when workers leave

“This isn’t an in-your-face let’s blame you. We need to find ways to reduce health care costs, which we’ve done with the unions,” Sweeney said.

Another recommendation: merge school districts. Dr. Ray Caprio, a professor at the Bloustein School of Planning and Public Policy spoke about why three years after his study, it hasn’t been done.

“In my mind, a lack of accountability. Nobody’s pressing for that kind of change,” said Caprio.

The group’s government reform panel recommended a big study on mergers and shared services to cut costs. It’s something Bloustein’s Marc Pfeiffer has been advocating for four decades

“And one of the things we’ve observed is there’s no quick fixes for these things,” Pfeiffer said.

The group recommends New Jersey take inventory of its assets, such as the Turnpike, and consider adding them to the pension system. And toll hikes.

“What we’re suggesting is that you may think about considering, in effect, an annual minor, small increase — inflation adjusted — rather than these large spikes to basically manage the revenue stream,” said Frank Chin, managing director of American Public Infrastructure.

The group recommended tax reforms and soon.

“One of the goals would be to get us to be more competitive within the region,” said New Jersey Society of CPAs Executive Director Ralph Thomas.

The state’s Chamber of Commerce says Sweeney’s ambitious plan will cause some pain.

“There’s probably recommendations in there that everyone is going to have to step up and tighten their belt and do more with less,” said Michael Egenton, executive vice president of the New Jersey Chamber of Commerce.

The governor thanked Sweeney’s group and said he welcomes the conversation about how best to jump start the economy. Sweeney says he was not looking for a fight with the governor on pensions and other issues and denied this was about him flexing his legislative muscle.

“This is not us versus them,” Sweeney said.

“I actually think that this council was formed with the intent of showing that the Legislature has its own mind, that the Legislature is interested in doing their own set of research,” said Matt Hale, Seton Hall University political science professor.

NJ Spotlight’s budget and finance writer John Reitmeyer spoke about how politically Sweeney’s group might get the job done.

“What this was was basically making it a little bit more of an academic exercise than a political exercise and then maybe the politics will cover after the academics is done. And we’ll see if that political exercise works,” Reitmeyer said.

“There is no option for inaction,” Sen. Steve Oroho.

Now the legislative leaders and others will go throughout the state trying to sell this plan and try to put it into action so, as they say, they can save New Jersey.