Senate President Stephen Sweeney
Deputy Speaker John Burzichelli
Assemblyman Adam Taliaferro

Burlington County Times – Senate President Stephen Sweeney says a new round of public employee pension and health benefit reforms is critically needed to get the state’s financial house in order.

Senate President Stephen Sweeney says a new round of public employee pension and health benefit reforms is critically needed to get the state’s financial house in order.

He also believes they offer the best chance to actually reduce the state’s notoriously high property taxes.

Sweeney, D-3rd of West Deptford, made that pitch to the Burlington County Times Editorial Board on Tuesday, explaining that he hopes to require whatever savings New Jersey’s counties and local governments receive from new pension and benefit reforms be used to reduce local tax levies and bring down property taxes.

Early estimates are the proposed reforms — which were recommended by a panel Sweeney formed earlier this year of Democratic and Republican lawmakers, economists and tax experts — might save New Jersey’s local governments at least $2 billion to start with and even more over time.

“People hate property taxes. Well, here’s the opportunity to do something about it,” Sweeney told the BCT editorial board.

The meeting was the latest of dozens the Gloucester County Democrat has held with newspaper staffs, chambers of commerce, and county and local lawmakers this fall, to try to quietly build support for the panel recommendations, which ranged from mandating that towns and school districts meet annually to discuss shared services to a certain-to-generate-controversy pension revamp that would move new employees and those with less than five years experience from the current defined benefit systems into a new hybrid system similar to a 401(k).

In the new year, Sweeney and other supporters expect to begin introducing legislation to implement the panel recommendations in hopes of advancing some of them as part of next year’s state budget.

“This wasn’t an exercise to do a study and then put it on a shelf. We’re going to start pushing real hard. Come January we’re going to be very public instead of private like this,” he said.

Sweeney, who has served as the Senate’s leader since 2010, knows exactly how challenging getting many of the recommendations approved will be. In addition to the pension reform, the Economic and Fiscal Policy Review Committee suggested merging elementary and middle-school districts into K-12 systems, as well as switching public employees from so-called platinum to gold health care plans, requiring new retirees to continue paying a share of the cost of their health care and capping unused sick time at $7,500.

The proposed changes are likely to generate pushback from public unions, particularly the pension reforms, which unions have resisted since Sweeney teamed with then-Republican Gov. Chris Christie in 2011 to pass a benefit reforms package that required most of the state’s workers to pay more toward their pensions and health insurance.

The law was hailed as a landmark measure that garnered Christie national attention, but budget pressures forced the Republican to renege on his promise to ramp up to the full state pension payment within five years.

Gov. Phil Murphy could also pose a challenge. Sweeney and the governor already battled this summer over the state budget and taxes, and Murphy has expressed reluctance to make pension changes until the state keeps its promise to public sector workers by making the full actuarial-recommended payment into the retirement systems. That’s not expected to occur until 2023 when $6.62 billion is due, more than double the record high $3.2 billion in payments the state is making this year.

Murphy has also begun pressing his own agenda to try to boost the state’s economy through state investment in venture capital and assistance for startup businesses and directing growth in impoverished or under-served cities and communities. The governor also hasn’t ruled out additional tax increases, following this summer’s hikes on corporations and so-called “supermillionaires” who earn over $5 million.

Sweeney stressed that he hopes to work with both Murphy and public employees unions on the panel’s proposed reforms. “I really want to sit with the unions and work with them, open the books and show them the numbers,” he said Tuesday.

But he was adamant that the state could not afford to wait until 2023 to enact new pension and health benefit reforms and that the state cannot realistically count on economic growth alone to solve its financial problems.

“We need a radical change and we need it quickly.” he said, adding that the public needs to rally and demand the difficult fixes like they did earlier this year on school funding changes. “The only way to fix it is if the public gets together and says ‘I’ve had enough.’”

Sweeney was joined at the meeting by Sen. Dawn Marie Addiego, R-8th of Evesham, and Richard Keevey, the former budget director and comptroller under Govs. Tom Kean and Jim Florio and a policy fellow at Rutgers University Edward J. Bloustein School of Planning and Public Policy. Both served on the review committee.

Addiego, who has been part of a core group of Republicans who have worked with Sweeney on controversial legislation such as the 2016 transportation funding deal, said there’s opportunity for the unions and other stakeholders to negotiate and compromise.

“There were multiple suggestions (for pension and benefit reforms). It’s not all or nothing. There’s plenty of places to compromise,” she said.

Keevey concurred, although he stressed that the state’s pension and health benefit liabilities must be addressed quickly.

Even if the state’s economy continues to grow, pension and health benefits will grow to consume all the additional revenue. Without reforms or additional tax increases, the state will likely face a $3 billion deficit within four years.

Sweeney said he consented to the corporate and multimillionare tax increases this summer as a “stopgap” to give the state time to implement the tough reforms needed to right the government’s finances. He said there’s no appetite for additional increases among lawmakers or residents.

“At the end of the day we’re going to draft legislation and move legislation. It’s not that hard to figure out. Either you’re going to raise taxes or fix the system.”

District Offices

Gloucester County

Kingsway Commons
935 Kings Highway, Suite 400
West Deptford, NJ 08086
Phone: (856) 251-9801
Fax: (856) 251-9752

Salem/Cumberland Counties

The Finlaw Building
199 East Broadway, Suite G
Salem, NJ 08079
Phone: (856) 339-0808 or
             (856) 455-1011
Fax: (856) 339-9626