Plans to over­haul NJ’s gov­ern­ment face murky path ahead

The Trentonian (Trenton, NJ) - - NEWS - By Mike Catal­ini

TREN­TON » New Jer­sey’s Se­nate pres­i­dent is push­ing a raft of cost­sav­ing pro­pos­als to res­cue the state from po­ten­tial fis­cal ruin, but the bi­par­ti­san rec­om­men­da­tions face an un­cer­tain fu­ture in the Leg­is­la­ture and with Gov. Phil Mur­phy.

Se­nate Pres­i­dent Stephen Sweeney, a Demo­crat, un­veiled the rec­om­men­da­tions on Thurs­day from the Eco­nomic and Fis­cal Pol­icy Work­group af­ter seven months of con­sid­er­a­tion by the 25-mem­ber panel.

Among the rec­om­men­da­tions is shift­ing state and lo­cal work­ers from a de­fined-ben­e­fit pen­sion plan to a hy­brid 401(k)-style plan for new work­ers and those with fewer than five years of ser­vice. The panel also is call­ing for cut­ting health ben­e­fits for re­tirees from plat­inum plans to gold.

Other changes in­clude merg­ing school dis­tricts into re­gional sys­tems that would go from kinder­garten to 12th grade and al­low­ing for the vol­un­tary es­tab­lish­ment of up to two coun­ty­wide dis­tricts as a pi­lot pro­gram. An­other pro­posal calls for re­view­ing the state’s sales tax ex­emp­tions.

The com­mit­tee also rec­om­mended ex­plor­ing the vi­a­bil­ity of trans­fer­ring ma­jor as­sets, such as the New Jer­sey Turn­pike sys­tem, to the state pen­sion to lower the re­tire­ment sys­tem’s un­funded li­a­bil­ity.

Sweeney pledges a se­ries of meet­ings across the state to push for the changes the panel rec­om­mended and says he ex­pects a po­lit­i­cal bat­tle over the mea­sure.

“Of course we’re go­ing to have a fight,” Sweeney said. “Any change that’s worth any­thing comes with a fight. The easy stuff is done. It’s gone.”

A par­tic­u­larly chal­leng­ing is­sue is pen­sion and health ben­e­fit changes, which con­tin­u­ally be­devil the state and rep­re­sent what the com­mit­tee calls a $152 bil­lion li­a­bil­ity.

Re­pub­li­can and Demo­cratic re­ac­tion to the rec­om­men­da­tions has been mixed. As­sem­bly Speaker Craig Cough­lin, a Demo­crat, says he looks for­ward to re­view­ing the pro­pos­als. Mur­phy, also a Demo­crat, said he wel­comes a con­ver­sa­tion, but he stopped short of em­brac­ing the pro­pos­als.

Tellingly, the state’s big­gest teach­ers’ union, the New Jer­sey Ed­u­ca­tion As­so­ci­a­tion, which has feuded fiercely with Sweeney in re­cent years, bashed the plan.

“The re­port glosses over the state’s fail­ure to meet its obli­ga­tions and get its fis­cal house in or­der,” the union’s lead­ers said in a state­ment.

The union is a ma­jor Mur­phy sup­porter, which strains re­la­tions with Sweeney be­cause he faced a Re­pub­li­can chal­lenger bankrolled by it in last year’s elec­tion.

The bad blood be­tween Sweeney and the union goes back to his sup­port for pen­sion changes un­der Gov. Chris Christie, a Re­pub­li­can.

Se­nate Mi­nor­ity Leader Tom Kean Jr., a Re­pub­li­can, said the pro­pos­als mir­ror what the GOP has put for­ward be­fore and he’s con­fi­dent his cau­cus can work with Sweeney.

But other Repub­li­cans don’t sound so open. Doug Stein­hardt, the state party’s chair­man, sug­gested the calls for low­er­ing costs and cut­ting ben­e­fits to help the state’s strained bud­get weren’t sin­cere.

“While their words today say they want to own the lower tax nar­ra­tive, their ac­tions kill it,” he said.

He pointed to this year’s bud­get, which hiked taxes on an­nual in­comes over $5 mil­lion and rates on busi­nesses mak­ing more than $1 mil­lion.

Busi­ness groups praised the ef­fort to make the state af­ford­able. But they want more time re­view and “digest” the rec­om­men­da­tions, state Cham­ber of Com­merce Pres­i­dent Tom Bracken said.

Whether any of the pro­pos­als makes it to Sweeney’s desk is un­clear. Sweeney promised com­mit­tee hear­ings with some leg­is­la­tion ex­pected to be drafted in the com­ing months.

Up next, Sweeney said, would be the hir­ing of an ac­tu­ary to crunch the pen­sion fig­ures. As of Thurs­day, the po­ten­tial sav­ings, or costs, of any of the pro­pos­als was un­clear.

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