Sweeney 'going to war' for NJ tax relief: Bergmann

There's lots to digest in Senate President Steve Sweeney’s task force report on fiscal reform released Thursday. The big question is how much of it is Gov. Phil Murphy, who has shown no inclination to do anything that would alienate public unions, willing to swallow?

The report includes more than 30 specific recommendations, winnowed down from an original list of 200. Many of the proposals have been on the table for at least two decades — pension and health care reform, school consolidation, limits on unused sick days, to name a few.

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What will be different this time around? Sweeney, the lead Democratic cheerleader in the Legislature for fiscal sanity, believes the state’s future looks so bleak without reform that lawmakers will have no choice but to finally act. New Jersey is on the precipice of disaster. Sweeney’s hoping Murphy will come around to recognizing that.

To that end, Sweeney said during an editorial board meeting at the Asbury Park Press Friday that he’s prepared “to go to war to see this done.” He says he will deputize his strongest allies — New Jersey taxpayers — to help take his case to Murphy. “I have people coming up to me all the time begging me to fix this,” he says.

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Sweeney notes that union employees, Murphy's most important political constituency, make up about 20 percent of the state’s residents. Sweeney plans to speak to the other 80 percent: "They need relief too."

Sweeney expressed confidence that Murphy, who naively believes New Jersey can grow its way out of its fiscal crisis, will go along with many of the recommendations in the report. But getting him to budge on public employee benefit and health care reforms — the key to bringing New Jersey’s fiscal house in order — may be a heavy lift.

Sweeney, however, thinks the reforms proposed by the task force should be more palatable to Murphy and the unions than those recommended by a pension and health benefit commission in 2015. In this iteration of reform, the pensions for retirees and fully vested employees (five years) would not be affected by the changes.

There’s a lot to like in this report. If all or most of its recommendations are implemented — something Sweeney said would likely be a multiyear task — it should provide some measure of property tax relief. More importantly, it should prevent the state from committing fiscal suicide.

I was disappointed more wasn’t done to address the state’s heavy dependence on the property tax by proposing a revenue-neutral plan that would distribute more of the load onto the income and sales tax. But the study does include recommendations that have the potential to provide substantial property tax relief.

Here are the five recommendations that have the best chance of saving taxpayers money, along with my betting line on the odds of getting them accomplished:

• Pension reforms: Along with health care costs, it has the most potential for either saving the state from disaster or plunking it down on its doorstep. Because the changes would only affect new employees, it would take longer to bend the cost curve. But in the long run, it must be done. Odds of getting this one past Murphy: 50-50.
• Health care reforms: The proposal calls for shifting public employees and retirees from platinum health-care plans, which typically cover 90 percent of costs, to gold plans, which typically cover 80 percent. The health-care changes would save an estimated $1.2 billion over five years. Odds: 60-40 in favor.
• Consolidating all K-6 and K-8 school districts into K-12 districts: The potential financial benefits of this recommendation, which was proposed by the Corzine administration more than a decade ago, are relatively modest. But the educational benefits are indisputable. Odds: 50-50.
• Capping unused sick leave and vacation days at $7,500, and requiring all future payments to be made at the average pay at the time they were earned. This could be a huge money saver. Will it happen? Odds: 60-40 in favor.
• Leveraging state assets to stabilize pension system: Anything that can be done to reduce unfunded pension liabilities, which eat up an ever-increasing proportion of the state budget, can reduce taxes and enable more spending on vital programs. Many states are far ahead of New Jersey in leveraging assets. We need to get in the game: Odds: 80-20 in favor.

Sweeney concluded his remarks at the editorial board meeting by reiterating his belief that New Jersey is a great state. But, he cautioned, “The only way we can screw it up is by taxing people out of it.”

The document Sweeney and a group of 24 financial experts, mostly from the private sector, have produced has given the state an opportunity to make the state greater still, and to keep the people who live here from leaving it. 

The Legislature and Murphy must seize the moment.  And citizens must do their part by putting pressure on them to do so.

Randy Bergmann: 732-643-4034; rbergmann@app.com; @appopinion.