Recommendations released by a bipartisan New Jersey panel last week aimed at attacking the state’s beleaguered finances centered largely on combating soaring pension and benefit costs.
The 25-member New Jersey Economic and Fiscal Policy Workgroup unveiled Thursday a series of
“We assembled a group of prominent and accomplished experts who devoted their hard work in developing a series of serious recommendations that are intended to address the state’s fiscal challenges,” Senate Budget Chair Paul Sarlo, D-Wood Ridge, said in a statement. “The report provides a blueprint of ideas that are intended to be thought provoking.”
The panel, which met for seven months, was co-chaired by Sarlo, Sen. Steven Oroho, R-Sparta Township, Assembly Majority Leader Louis Greenwald, D-Lindenwold, along with a group of economists and tax experts. In addition to seeking overhauls of a struggling pension system, the committee also wants to explore cost savings from merging school districts into regional systems and considering high-occupancy toll lanes.
Regina Egea, president of the Garden State Initiative, said the panel’s recommendations don’t go far enough. Egea, who was chief of staff to former Gov. Chris Christie from 2015 to 2016, said the report’s focus on achieving health benefit savings is a positive, but stressed that the committee failed in addressing a specific path toward implementation or in tackling the state’s pension woes.
“Recommendations that do not include costs to implement and expected savings, along with a timeline of implementation, is not really a plan; but rather another committee report,” Egea said in a statement. “Unless we are willing to tackle the 800 lb. gorilla in the room, which is the unsustainable level of payment of pension benefits, which this report fails to do, things like HOT lanes, consolidation and shared services are distractions that just nibble at the edges of our financial crisis.”
Gov. Phil Murphy included a record $3.2 billion pension payment in his 2019 fiscal year budget, which still only met 60% of the actuarially determined contribution. New Jersey’s pension woes triggered 11 credit rating downgrades under Christie to the lowest of all U.S. states outside Illinois. The Garden State now has general obligation bond ratings of A-minus from S&P Global Ratings, A3 from Moody’s Investors Service and A from Fitch Ratings and Kroll Bond Rating Agency.
“We confront an unsustainable legacy pension and benefit costs that will make it all but impossible to meet our priorities,” Senate President Steve Sweeney, D-Gloucester, said in a statement. “We have to be willing to take the actions needed to maintain fiscal stability and promote economic responsibility.”
