The following editorial by Senator Anthony Bucco (R-25) addressing the fiscal reforms proposed by the bipartisan Economic & Fiscal Policy Workgroup was published in The Daily Record on August 26, 2018:
I’ve spent the past decade as the Senate Republican Budget Officer trying to balance the growing cost of state and local governments with our need to provide affordable services to New Jersey taxpayers.
The Daily Record published an editorial by Sen. Anthony Bucco addressing the fiscal reforms proposed by the bipartisan Economic & Fiscal Policy Workgroup ,of which he is a member. (SenateNJ.com)
I fought against unnecessary new taxes and spending, and worked to restore funding that was reduced by others to safety net programs for children, seniors, and the disabled.
Unfortunately, protecting those programs and the real people they serve is becoming harder each year as state spending on public employee benefits has exploded.
One of our biggest costs is healthcare. Our public employees receive top-of-the-line health coverage that is rapidly increasing in cost.
A shift several years ago to a new premium-sharing model eased the pain temporarily. Today, despite that important reform, both employees and their taxpayer-funded employers are paying more than ever before.
Similarly, our payments for public employee pensions are growing at breakneck speed. After decades of underfunding, we’ve been ramping up the State’s pension contributions to the amount our actuaries say is necessary to address a massive unfunded liability of $115 billion.
Just this year, we’ll pay $3.2 billion into the pension fund, nearly the same amount paid in total by the State from 1995 to 2010. In four years, that annual contribution is on track to double to more than $6.6 billion.
We’re trying to do the right thing by attempting to reach a full pension payment for the first time this century, but there’s no denying that other needs will suffer when the pot of money in the state budget is only so big.
If we do nothing, it’s projected that the combined cost of pensions and benefits will grow to consume 26 percent of the state budget by 2023, leaving little room for many current programs.
While some may suggest raising taxes to generate more revenues, there appears to be bipartisan agreement in the Legislature that taxes aren’t the answer. Our families and their employers already pay income, business, and property taxes that are among the highest in the nation.
We must acknowledge that New Jersey is at a tipping point. The great fiscal reckoning that’s approaching cannot be ignored or wished away. It can be resolved, however, through a demonstration of political fortitude by leaders in Trenton.
Some of us have accepted the challenge of confronting these problems head on. I recently had the opportunity to work with a bipartisan group of legislators and outside experts for that purpose on the New Jersey Economic and Fiscal Policy Workgroup.
Our workgroup was commissioned to develop solutions to the difficult fiscal problems and structural imbalances that have confounded previous policymakers.
From the beginning, I pushed my colleagues on the workgroup to be bold and consider comprehensive reforms that could dramatically change the way we run government in New Jersey.
The recommendations that we issued after months of research, analysis, and debate are certainly bold, as they must be. Most importantly, they offer the opportunity to produce billions in savings each year for New Jersey taxpayers.
We proposed a reasonable reduction of public employee health benefits from platinum to gold-level plans, as defined by the Affordable Care Act. That change would save state and local taxpayers around $1 billion, while increasing the paychecks of public employees through lower premiums and smaller payroll deductions.
To reduce future pension costs, we recommended transitioning to a hybrid retirement plan for most new government and school district employees and those with less than five years of service. We also suggest increasing the retirement age for those workers.
Other reforms that we offered would limit sick-leave payouts to retiring public employees, improve shared services, and reform how we fund special education in New Jersey.
The full report containing all of the workgroup’s proposals can be read at pathtoprogressnj.org.
While our recommendations are far reaching, I also believe that additional reforms that didn’t make it into the final report are worthy of consideration by the Legislature.
One example is a state spending cap that I sponsor with Sen. Tom Kean and Sen. Steven Oroho, which would protect any savings we achieve from being lost to frivolous new spending.
This and other thoughtful proposals deserve discussion as we move forward with the reform process.
Whatever we do, we can’t afford to settle for another round of timid half measures. That won’t get the job done. It’s time for the Legislature to be bold for New Jersey.
Sen. Anthony Bucco, R-Morris/Somerset). He is the Senate Republican Budget Officer and a member of the Economic & Fiscal Policy Workgroup.