New Jersey is at a crossroads says The Fund for New Jersey in its latest in a series of reports aimed at helping the next governor frame policy. It identifies issues that if left unattended that it contends could put our prosperity at risk. Fund for New Jersey President Kiki Jamieson joined Rhonda Schaffler.
Schaffler: Kiki, welcome.
Jamieson: Thanks for having me.
Schaffler: Your reports indicate New Jersey is at a crossroads. How did we get here, briefly, but more importantly how do we get out of the situation we’re in?
Jamieson: For too many years, New Jersey has prioritized short term solutions, quick fixes, over the long term investments we need. Look, New Jersey is a great place to live and it could be even better if we started to focus on the things that really matter. I’ll give you an example: We have a perfect location between New York and Philadelphia, but lately it’s hard to get anywhere.
Schaffler: Transportation is certainly one issue to tackle. There is a lot in your reports. Everything from physical policy, climate and environment, criminal justice, education, housing, land use, jobs and the economy. So, there’s a lot of issues. Is there one particular issue you think the candidates have not been focusing enough on?
Jamieson: These issues are all interconnected and it’s difficult to disentangle any of them. But, for us at the fund, the most critical issue is the state fiscal crisis. New Jersey is in the unenviable position of being last on nearly every list of fiscal health. And, if we don’t pay serious and focused attention to that, it will be very of difficult to make the kinds of public investments in environment, transportation, education, housing and the like that we all need for New Jersey to prosper.
Schaffler: So, one issue that you suggest is looking at the pension system, making some changes. It’s very politically difficult as we know. It hasn’t been done in literally decades.
Jamieson: You’re absolutely right. And if it were easy to do, or quick, we would’ve done it already. But, it’s important to start now. Just because the problem wasn’t caused by us, or the new administration and Legislature doesn’t mean that it’s not ours to fix. And, the report offers a common sense balance solution for how to get there. We think we need about $5 billion of additional revenue that comes about through some spending cuts, through some revenue enhancements in order to begin to tackle this problem. If we don’t do it, it’s only going to get worse and putting it off will only make things even more terrible.
Schaffler: That does include cutting some health care though.
Jamieson: It does, unfortunately. One of the recommendations is that we take a look at post-retirement employee health benefits and to bring it down from an Obamacare platinum level to a gold level, which is still we think important and generous coverage. But, everybody is going to pay a little bit if we want to make the situation better.
Schaffler: You mentioned transportation at the onset. We have the Gateway Project. Some of that funding is really out of New Jersey’s control. We have a Transportation Trust Fund. What more do we need?
Jamieson: We need serious leadership on this. We need a recognition that New Jersey’s economic future and prosperity does depend significantly on our ability to get across the Hudson River. And if people can’t get to jobs, people from New York can’t get to jobs in New Jersey, we will be stymieing ourselves and it will be difficult to recover.
Schaffler: Of course, a lot of politicians would like to keep New Jersey residents in New Jersey and make sure there are jobs here, how do we do that? I mean, getting something like Amazon would be a huge win. But, we need more than kind of getting our hopes on one giant win, right?
Jamieson: Absolutely. One thing that we talk about in these reports is that 85 percent of the new jobs in New Jersey come from homegrown businesses. And if we began to focus on providing supports and incentives for growth for those businesses that are already here, we would do far more to improve the economic climate than by pinning our hopes on winning suitors from outside the state.
Schaffler: Incentives though have been under some criticism and some of the tax incentives that have been handed out. Should they be thought of differently?
Jamieson: The reports say it’s very important to monitor and evaluate these things. Tax incentives and breaks have their role, but we need to know what works. New Jersey doesn’t have the luxury to spend money on things that don’t work. Careful evaluation is needed.
Schaffler: Where are we spending money incorrectly, potentially, in your big picture view?
Jamieson: Well, it would be unfair of me to comment on that, but I will say that one thing that surprised us as we were preparing those reports is to learn that $24 billion of tax expenditures accrue every year. And this isn’t part of the regular budget. It’s reported separately and that means $24 billion of revenues that are forgone. Now, quite a lot of that goes to very important causes, like the earned income tax credit. But, we don’t know enough about those tax expenditures that exist and it’s worth taking the time and energy to take a closer look.
Schaffler: Is this series of reports something candidates in both parties can agree with?
Jamieson: I think every candidate should read these reports and find possibilities to link to. These are common sense solutions. We are a nonpartisan, nonprofit organization and we have no partisan ax to grind. But, we do do something a bit different which is that we tell the truth. We use facts to describe the current situation and to look at the future that New Jersey needs and describe some practical ways to get there.
Schaffler: Kiki Jamieson, thanks for coming in and sharing some of those ways with us.
Jamieson: Thanks very much. We hope everyone will read these reports.