NJ Politics Digest: Could This Be the Way Out of the State’s Fiscal Mess?

Key provisions of the plan seeks to rein in spending on public employee benefits, but residents would pay more too.

N.J. State Senate President Steve Sweeney
N.J. State Senate President Steve Sweeney. Max Pizarro for Observer

Trimming public worker pensions and benefits, merging school districts and using revenue from toll roads to cover pension obligations are among the proposals for getting a handle on the state’s fiscal woes by members of a panel convened by Senate President Steve Sweeney.

The 25-member group released its recommendations on Thursday, and Sweeney vowed to take his plan on the road to convince state residents that it’s needed.

But Sweeney might have a tougher fight in his own backyard, as fellow Democrat Gov. Phil Murphy gave the proposals a cold reception.

“Our problem isn’t simply how much state government spends—it’s how,” the governor, whose first budget increased state spending by more than $2.7 billion, said in a statement. Murphy blamed the state’s financial woes on former Gov. Chris Christie. The governor, who is closely allied with public workers unions, said “asking the middle class to shoulder more and more of the burden is the wrong approach to getting our fiscal house in order.”

Key provisions of the panel’s plan seeks to rein in spending on public employee benefits by moving unions from “platinum” healthcare plans to “gold” ones and requiring retirees to pay some of the health insurance costs.

It would also fundamentally change the state’s underfunded pension system by granting new employees pensions on the first $40,000 of income and then subjecting anything above that to a 401(k) style retirement plan similar to what most private-sector employees now have.

It would also cap the amount of unused sick leave retiring employees can be paid for, in an attempt to stop the practice of some employees leaving with payouts in the hundreds of thousands of dollars. The panel also wants to merge hundreds of K-6 and K-8 school districts into regional K-12 districts and get towns to share services.

Residents would pay more, too, as the panel urged ending the sale tax deductions for clothing, food and services, placing new tolls on some untolled roadways and raising tolls on the New Jersey Turnpike.

Sweeney wasn’t deterred by criticism, saying the state’s finances were in such a critical state that immediate action was needed to ensure the state could meet its obligations.

Assembly Speaker Craig Coughlin referenced the state’s crushing tax burden saying “affordability is a real issue for New Jerseyans” and promising to “take a thoughtful look” at the proposal.

Quote of the Day: “We’re going to have a fight. Any change that’s worth anything comes with a fight. The easy stuff is done. It’s gone.” — Senate President Steve Sweeney, acknowledging that a plan to right the state’s finances will face fierce opposition.

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NJ Politics Digest: Could This Be the Way Out of the State’s Fiscal Mess?