The following editorial by Senator Steven Oroho on a bipartisan reform plan to address New Jersey’s fiscal challenges was published by the Star-Ledger on August 22, 2018:
Our state’s unaffordable and uncompetitive tax structure is driving many of our families, employers, and jobs to other states. The data is undeniable.
Sen. Steven Oroho discusses a bipartisan reform plan to address New Jersey’s fiscal challenges in this Star-Ledger editorial. (Pixabay)
Many of our biggest fiscal problems which remain largely unaddressed are on the spending side of the ledger. That has become increasingly evident in recent years as we performed our constitutional duty of reviewing and adopting a balanced state budget.
Since joining the Legislature in 2008, I’ve put my experience in financial planning to work by carefully studying how governments in the Garden State collect and spend our taxpayers’ money. I’ve taken what I learned and reached across the aisle to find partners who were willing to join me in addressing these issues in a bipartisan manner. While we’ve made some significant progress on tax reform, there is still much more work to do.
We have struggled with the challenge of the rapidly rising public employee pension and health benefit costs that have begun to consume our budget, making it increasingly difficult to support vital services while continuing our efforts to reduce taxes and make smart investments in our state’s future.
Those rising benefit costs, combined with long-standing inefficiencies and known abuses, have driven all levels of government in New Jersey to a state of perpetual fiscal crisis.
It’s crystal clear that if we do nothing to lower the cost of government significantly, we’ll be forced to accept higher taxes or reductions to important programs that serve as a lifeline for many New Jerseyans.
That’s why I was excited to have the opportunity in recent months to serve as a co-chair of the Economic & Fiscal Policy Workgroup, a new bipartisan effort to make government in New Jersey more efficient and affordable.
The group consisted of legislators and policy experts from both the public and private sectors. Despite representing a diversity of viewpoints and political ideologies, we were united by a shared belief that our state’s problems are significant, but not insurmountable.
We set out to identify achievable solutions to lower taxes, streamline government, and protect our investments in education, infrastructure, and economic growth.
We carefully examined and confirmed the dire fiscal realities that New Jersey faces in upcoming years if reforms are not enacted.
In our next state budget, for example, we determined that benefit costs will grow by an estimated $879 million, while revenues are expected to increase by just $1.1 billion. At the same time, spending on other items like education is expected to increase by $900 million, translating to a $700 million budget deficit next year if we do nothing to address the rising cost of benefits.
That deficit is projected to become even worse over time. By Fiscal Year 2023, benefits costs are expected to increase by $4.2 billion, while spending growth is expected to be $8.8 billion more than new revenues.
After months of analysis and deliberation on the many fiscal challenges that confront the state, municipal governments, and school boards, we released a report that includes both our findings and recommended fixes.
Our proposals, if enacted, would produce billions in savings for taxpayers through public employee benefit reductions, new school funding reforms, and increased efficiencies that can be realized by our local governments and school districts.
For example, we recommended reducing platinum-level health benefits for public employees to still generous gold-level plans, producing more than $1 billion in savings to taxpayers, and we proposed pension system reforms that would reduce a massive unfunded liability while protecting the benefits that current employees and retirees have earned.
Additionally, we listened to school districts and recommended that the state fund the full cost of extraordinary special education, which would free up money in local budgets and provide significant relief to property taxpayers.
We also propose ending six-figure payouts to retiring public employees for unused sick time through strict new limits that would extend to every level of government.
These are just a few of the solutions that the workgroup has proposed. Our bipartisan plan provides a comprehensive roadmap to help policymakers tackle some of the biggest problems that have been avoided for too long.
With well-reasoned solutions on the table, there’s no excuse for continued inaction. New Jersey is still fixable, but we are running out of time.
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