Senate President Steve Sweeney | September 27, 2020 | The Star-Ledger |
This is the budget we need, not the budget we want. It addresses the immediate crisis.
In the end, we know budgets are about our shared priorities. The revenue will pay to restore funding for programs that were cut. Among the most important are funding for our hard-pressed hospitals, our state and county colleges, domestic violence programs, sheltered workshops and the school-based youth services programs that provide counseling to troubled teens. Additionally, the legislature ensured that we sustained the Homestead Rebates and Senior Freeze programs that are crucial to keeping seniors in their homes
We authorized borrowing because at historically low-interest rates it would be unwise not to invest in the programs that will get us through this pandemic. And just because the state borrows the money, it doesn’t mean we will spend it. The Legislature insisted upon strict controls by legislative leadership, which laid the foundation to success in the New Jersey Supreme Court when the state was challenged on its authority to borrow. It is clear in the New Jersey Constitution that the framers wanted to provide fiscal flexibility in the event of a crisis, but also that the flexibility was only meant to address the crisis at hand. The current budget serves as the first step in meeting the intent.
Over the next nine months, the responsibility of the Legislature and the governor is to address the long-term fiscal crisis facing our state – a crisis that has resulted in repeated downgrades by the bond rating agencies who rightfully regard the fiscal challenges we face as the second-worst in the nation after Illinois.
Fortunately, as a direct result of this year’s budget talks, the governor has agreed with us on the need for fundamental reforms to balance future budgets, to provide savings for taxpayers and to make government services more efficient.
We already achieved substantial savings for both taxpayers and educators through the health benefit reforms we negotiated with the New Jersey Education Association, as well as with the Pharmacy Benefit Manager program we set up to cut prescription drug costs and avert prescription errors. We need to continue to find common-sense healthcare savings year after year.
There are many reforms we can do next:
- Pension amortization reform – this could save billions of dollars for taxpayers over the next decade
- Implement a hybrid pension system for new employees – this will guarantee a secure retirement without overburdening taxpayers
- Add infrastructure assets to the pension system – this will reduce liabilities and create new non-tax revenue for the pension system
- Create consensus revenue forecasting – this will take politics out of revenue estimates preventing a governor from arbitrarily inflating or deflating revenue projections to benefit his/her agenda
- Cap accumulated sick leave at $7,500 – this could save as much as $50 million annually
- Replace designated holidays with floating leave days – could save tax payers nearly $20 million a year
- Protect healthcare premiums – require public employers to ensure that employees are not gaming the system
- Promote countywide and K-12 regionalization for schools – this would reduce overhead costs by millions of dollars while maintaining local schools
We need tax savings, particularly property tax savings. These ideas are not new but we must realize the harsh realities facing New Jersey residents and make the tough policy choices that we know will result in lower costs and greater efficiency.
We had to recognize that the economic and fiscal impact of the coronavirus pandemic will linger long after a successful vaccine is found and the health crisis itself ends. No one, including me, wants to raise taxes but faced with the realities of COVID-19 it was a choice that had to be made. The virtual economic shutdown in March and April wiped out over 1.5 million jobs, and 600,000 of our fellow New Jerseyans are still out of work six months later. Thousands of small businesses operating on narrow profit margins will never reopen, including many of the restaurants and “mom and pop” retail stores that anchor our downtowns.
Hundreds of thousands of New Jersey families got through the first six months of the pandemic on $1,200 federal stimulus checks and $600 a week federal unemployment supplements. The next coronavirus relief package – if we get one – may help get them through the fall. But the federal checks – to people and to state and local governments – are going to run out in a matter of months, and we are going to have to deal with the aftermath.
The reality of both the current and long-term consequences of the pandemic led us to a state budget with more taxes and more borrowing than we wanted to do.
We need significant reforms to preserve our quality of life and ensure that New Jersey is both affordable and competitive with other states.
Find the article here.