Will Salary Cuts Plug The Budget Hole?

By Art Gallagher

Yesterday afternoon on the LaRossa and Gallagher radio show I asked Assemblyman Declan O’Scanlon how the $790 million dollar hole in Governor Christie’s proposed budget would be filled. Christie’s budget assumed $300 million in savings during the coming fiscal year from healtcare reform. The legislation likely to be passed in the Assembly only yields a savings of $10 million this year. Last month the State Supreme Court ruled that the state must spend $500 million more than Christie budgeted on Abbott district school spending.

O’Scanlon pointed to increased revenue projections and to yet to be determined savings from the new healthcare deal, but acknowledged that he and the other legislators crafting the budget have tough choices to make between now and June 30 when the budget must be passed.

June 30 is the deadline for the state budget to be enacted. June 30th is also the expiration date of the current union contracts for 48,000 state workers. Once the pension and benefits reforms are passed by the Assembly tomorrow, there will be an intense sprint to meet those deadlines in one week.

Mark Magyar, a former deputy policy chief in the Whitman administration and the policy director for the 2009 Daggett for Governor campaign,writing at NJ Spotlight, raises the possibility that Governor Christie could impose a new contract on the state workers.

The 1968 public employee collective bargaining law gives the governor and mayors the power to impose contracts on non-uniformed employees. Christie would be the first governor to use that power.

Magyar says that negotiations with the unions started late and have been on hold while Christie and the legislature worked on the pension and health carereforms. Christie has proposed a 3.5% pay cut.

I’ve been scratching by head trying to figure out why Christie and the Republicans in the legislature have been celebrating the health care reforms that only yield $10 million, rather than $300 million, in savings while the Democrats are waging a civil war over the deal.

O’Scanlon says the health care deal agreed to is not Reform In Name Only, that they will produce real savings over time. That might be true. But it seems like another kick the can down the road.

If Christie exercises his executive power to reduce the cost of government now by imposing union contracts that recover the savings given up the the health care deal we would know that we got real reform. Not delayed reform. That would be turning Trenton upside down.