Former state officials warn of huge reduction in services to come

A group of business leaders that includes several former state officials is warning that without drastic changes to state and local budgets, state residents will face a dramatic reduction in services in the decade to come.

In a report entitled “Facing our Future”  the group, which includes two former state treasurers, says budget gaps will force the state as well as local and county governments to cut as much as 20 percent of the services currently provided.

“There are still large gaps between revenues and increasing service demands. Indeed, our projected gaps are so large that any future debate is likely to include the loss of entire programs, and may equate to the elimination or transformation of nearly 20 percent of all current services. Although New Jersey law requires balanced budgets, they can be achieved only by eliminating services of the high quality we have long accepted – and expected – throughout our levels of government. Unless we rethink what services we want from our government, and how we want to deliver and pay for them, we will face a starkly different New Jersey,” the report issued by the Council of Grantmakers cautions.

Among the former state officials that make up the group are former Treasurers Sam Crane and Feather O’Connor Houston, former state Attorneys General Robert Del Tufo and John Farmer Jr., former Supreme Court Chief Justice Deborah Poritz, former gubernatorial candidate Chris Daggett and former State Senate Executive Director Kathy Crotty.  The group also includes Rutgers Professor Ingrid Reed.

According to the report, the group conservatively estimates that budget shortfalls will grow over the next five years to $8.1 billion at the state level, $2.8 billion at the municipal level $1.1 billion at the county level and nearly $1 billion among school districts.

The gap does not include the $25.6 billion unfunded liability of the state pension systems, with an additional unfunded liability for post-retirement medical benefits of $59 billion. In addition, there is an unfunded liability for municipal and county pension systems of $10.6 billion, and at least $12 billion underfunded for retirement medical benefits, the report states.

To close the budget gaps, the group has recommended a number of fixes, which include implementing an internet sales tax, consolidation of services, creating a county school administration, shared purchasing, and centralization of emergency response systems.

” All levels of government – state, county, municipal and school district – are tightly interconnected, and decisions at the state level have inevitable consequences at the local level,” the report says. “The cumulative effect across all levels of government of ‘balancing without restructuring and modernizing’ is an acceleration of the hollowing out of services.”

The full report is attached below:

Former state officials warn of huge reduction in services to come