The fiscal crisis in New Jersey’s governments and schools will continue through 2017 as a result of a $13 billion revenue shortfall, ($8 billion on the state level, $5 billion on the local, county and school levels combined) according to a report, Facing Our Future, released by the Council of New Jersey Grantmakers. (CNJG)
The report says New Jersey will face a gradual cut in government services of 20%. Increased classroom sizes, from 22 to 28, less police officers and the elimination of services all together.
CNJG recommends solutions we have all heard before. Shared services, consolidations, more county government and less municipal government, county administration of schools.
One thing that is not clear from the write-ups. $7 billion of the $8 billion state revenue shortfall will be pension contributions negotiated by Governor Christie and the Democratic legislature in last years “landmark” pension and benefit reform bill.
One solution not recommended in the report….break the government employees unions’ control of our government.
In 2010 the unions said no to give backs. Thus, New Jersey suffered increased class sizes and police layoffs in our cities. Crime continues to rise in Newark and Camden, but our elected officials can’t do anything about that because the unions control how many police officers can be hired given the money available to pay them.
New Jersey pays unemployment benefits to laid off police officers not to patrol the streets of our cities, while the high paid officers who kept their jobs do the best they can. There are less extreme examples of needless service cutbacks throughout the state.
Practically speaking, there is no question that New Jersey’s public employees control the government. Not the people. Not the elected officials.
New Jersey’s fiscal crisis could be solved easily if the law of supply and demand were applied to the labor market for government workers. Until that happens, if it ever happens, we will continue to pay more for less.
It doesn’t matter how we restructure government so long as the employees are in charge.
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.
Republican Governor Chris Christie proposed pension and benefit reforms that would have resulted in a $300 million budget savings in the coming fiscal year and that actuaries said would have corrected the system.
Senate President Stephen Sweeney and Assembly Speaker Sheila Oliver, Democrats, gave Christie a “compromise” that results in a $9 million budget savings in the coming year and that actuaries say doesn’t go far enough.
Christie and the Republicans in the legislature are celebrating. The media is calling the bill a landmark reform.
The Democrats and their union benefactors are having a civil war.
There is a fifth dimension, beyond that which is known to man. It is a dimension as vast as space and as timeless as infinity. It is the middle ground between light and shadow, between science and superstition, and it lies between the pit of man’s fears and the summit of his knowledge. This is the dimension of imagination. It is an area which we callThe Twilight Zone.
Editors note: The following column by Dan Jacobson was originally published in the June 16, 2011 edition of the triCityNews. It was written before the recent agreement of pension and health care reform struck by Governor Christie, Senate President Sweeney and Assembly Speaker Oliver.
By Dan Jacobson
Any day now, you’ll see our Republican Governor and Democratic legislative leaders announce a deal to “reform” our state pension system.
Don’t believe it. This is a problem requiring 20 years of fiscal discipline. These people can’t see beyond the next election in 20 weeks.
Our state government is $121 billion short of what’s needed to pay projected pension and retiree health benefits. How bad is it? This year’s proposed state budget is only $29.4 billion.
In other words, we’re bankrupt.
Remember the rioting in Greece last year? You bet there could be tear gas over Trenton if this isn’t fixed. And I’m not optimistic.
Last week, I announced I’m running for the state Assembly as an Independent. So let me piss off everyone by outlining what needs to be done. And it’s ugly. No way around it.
First, this problem must be ripped away from the politicians. I’d propose a state constitutional amendment – requiring voter approval – to establish an independent Board of Trustees to administer the pension and retirement health benefits system.
Each year, these independent Trustees would recalculate the total projected shortfall the state faces. No fudging the numbers by politicians. And the Board of Trustees would develop and oversee a long-term plan to restore the system – and thus the state’s finances – to solvency.
In addition, the Board would determine the annual contribution to the system – and it would have to be paid by the state. The elected officials have underfunded it for 15 years. With a constitutional amendment, that would end. No more cheating. We’d pay what’s needed to fix the problem.
And the Board of Trustees would be empowered to do what the politicians can’t: Set up a plan of benefit cuts and tax increases to fix the system by spreading the pain as widely as possible. And the wider it’s spread, the less it hurts everyone individually. Everyone has got to take a hit. We’re all in this mess together.
By the way, those benefit cuts would affect current and future retires already in the system. There’s no other way to do it. Elected officials only talk about changing the benefits for new employees. That’s not enough. So I envision everyone equally screaming – taxpayers, retirees, future retirees – when the Trustees propose a plan to fix this mess. Ironically, that way you know it’s fair.
But this is not a dictatorship. The rescue plan from the Board of Trustees would be submitted for voter approval.
If voters reject it, the Pension Trustees would simply take what’s needed every year from the state Treasury to ensure the system’s solvency. In that scenario, the three-ring circus in the State House – the Governor, the Assembly and the Senate – would figure out how to pay that annual bill. Of course, that will be a mess. But the bill would be paid. No more underfunding the system. No more postponing Judgment Day. I’d rather face it on our terms.
There you have it. That’s the basic outlines of my proposal. Here’s some more details:
The Board of Pension Trustees would be non-political like Judges. They’d be appointed by the Governor with the consent of the state Senate. None would have business or financial connection to unions for at least a decade, if not more. They’d have long and staggered terms as Trustees to minimize political interference.
And in putting together a rescue plan, their directive in the constitutional amendment would be quite specific: To implement a mix of both benefit cuts and tax increases – and it would specifically require both – to spread the burden as equitably as possible across all the citizens of this state.
Sure, that would require subjective judgments. There’s no mathematical formula to achieve this. But at least a rescue plan by the Trustees would be made in good faith by non-political appointees – not politicians seeking reelection. And voters would have the final say.
In other words, we’d face this problem like adults. We’d empower an independent group of people to tell us the truth. And propose a solution for us to consider. We’d then make the final call in a statewide vote.
Sure sounds better than tear gas canisters fired at protestors when a bankrupt state can’t pay its bills – and people become more outraged than anything we’ve ever seen in New Jersey.
But maybe all is not lost. Take the sentiment of retired state worker Vincent Lobascio, 85. He’s ready to sacrifice some of his benefits. Let’s hope most other citizens share his views – or we’re done.
“I’m willing to make my contribution, and I’m a retired guy,” the World War II combat veteran told the Asbury Park Press in a story about the pension crisis. “But don’t kill me.”
I’m with Mr. Lobascio. This 49 year-old taxpayer would pay more to solve this mess – just don’t kill me either. We’re all adults. We all know something must be done. Just spread that burden around as widely as possible. In the end, the solution is likely reasonable.
But politicians can’t do that because they’re competing for the support of blocs of voters – whether liberal union members or anti-tax conservatives. It’s all about getting elected. In fact, both those voter blocs I just mentioned will be outraged at this column.
Oh well. So I’ll get to remain a private citizen. Wow, what a tragedy.
So when you see our Republican Governor and Democratic legislative leaders announce some deal to address this problem, remember this: It’s all about the election in five months when the Senate and Assembly are up for grabs. It’s not a permanent deal. It can always be reversed or changed later. And you bet that will happen when the economy starts to do better and no one is paying attention.
Sure, they’ll make some progress with their deal – just enough to con you to think something is getting done. But not on a scale that really solves this problem. There’s not enough political upside and way too much political downside. The state has never faced a challenge this big. Plus, I don’t believe any figures or estimates these clowns throw around. They’re all biased toward getting reelected.
But a constitutional amendment empowering an independent Board of Trustees goes a long way toward eliminating political mischief.
And in my proposal, we’d even get to vote on any rescue plans from the Trustees. If they want to modify a rescue plan later, we’d all vote on that too. If any plan is rejected, the state would still fully fund the retirement system every year and stop the cheating. Imagine how different everything would be if that was done for the past 15 years.
Hey, such a constitutional amendment sounds reasonable to me. That means it doesn’t have a chance in Trenton.
So in the most unlikely event I get elected to the Assembly – only one Independent has done so in 50 years – at least there’d be one person down there speaking the truth about the most dangerous problem this state has ever faced.
(The 11th District where I’m running includes: Asbury Park, Long Branch, Red Bank, Ocean Township, Neptune, Neptune City, Interlaken, Deal, Allenhurst, Loch Arbour, West Long Branch, Eatontown, Shrewsbury Borough, Shrewsbury Township, Tinton Falls, Colts Neck, Freehold Township and Freehold Borough.)
Now that Senate President Stephen Sweeney has agreed with Assembly Speaker Sheila Oliver’s proposal that government employee pension and health benefit reforms be temporary and guts key elements of the reforms that Governor Christie and Sweeney agreed to, it seems as though we are in danger of business as usual prevailing in Trenton.
If Governor Chris Christie goes along with this “compromise,” real sustainable reform of New Jersey’s government is not going to happen. “Reform” will just be a short term fix to get us through the tough economic times made with the rosy assumption that the economy will improve to the point where we can afford to bestow free health care and overly generous pensions to our “public servants.”
What I found most alarming about this Star Ledgerarticle was not that Sweeney and Oliver may have outmaneuvered Christie (InTheLobby speculates that the unions have already agreed to the deal despite their public protests to the contrary and that Christie will go along with it), but the fact that the deal effects the state’s 500,000 public workers.
That’s one public worker for every 17 New Jersey residents.
I’m assuming that includes county and municipal workers, as the U.S. Census reports that NJ has 154,000 state employees and 360,000 local government employees. Will legislation currently being negotiated in Trenton override contracts that counties and municipalities already have in place? If so, that would be terrible for Middletown taxpayers where the the governing body got the police to agree to pay 25% of their health care in order to avoid layoffs. How would the 2% property tax cap work if the State makes deals that override better deals that municipal governments have negotiated.
Hopefully the Star Ledger reporter got his figures wrong.
Regardless of the largess we bestow on state and local government employees, 500,000 employees “serving” 8.7 million people seems like awfully big government. And that doesn’t include federal government employees located in New Jersey.
I various government websites for about an hour trying to find how many federal government employees are located in New Jersey. I found that the federal government, with 2,000,000 employees, not including the post office, is the nation’s largest employer. 85% of federal employees are located outside of the Washington DC metro area. But I couldn’t find a state by state break down of the employees. I wonder why that information is so hard to find.
Let’s assume its only 50,000 between Homeland Security, the military, law enforcement and social security offices.
That would mean that in New Jersey, one in every 16 people is on the government payroll.
It is little wonder that New Jersey is rank next to last in freedom.
Capitol Quickies has a summary of the proposed deal that reportedly has been agreed to by Governor Christie, Senate President Sweeney and Assembly Speaker Sheila Oliver.
There have been multiple news reports of shouting, not cheers, coming from the Democratic Assembly caucus room. Oliver said “we’re not there yet” about her caucus supporting the deal.
In the past Oliver has implied that she will not pass the deal with the support of Republican Assembly members. In effect, even if the majority of the Assembly supports the reform legislation, Oliver won’t allow it to be voted on unless a majority of the Assembly Democrats support it. There are 33 Republican Assembly members, 46 Democrats and one vacancy. If Republican unanimously support the deal and 7 Democrats join them, the legislation would pass. Oliver who said, “My caucus must have the chance to have their concerns considered. The voters who elected them deserve no less,” won’t let that happen.
What do the voters who elected Assembly members who support the reforms deserve?
The presidents of the NJEA and the CWA condemned the deal, saying it would reduce employee compensation and was an assault on collective bargaining.
Middletown—Senator Joe Kyrillos (R-Monmouth/Middlesex) today noted the Monmouth County Freeholders swift disciplinary action against workers involved in last week’s ‘sick-out’ of SCAT bus drivers:
“The Freeholders did the right thing by immediately suspending three individuals who called out sick on Friday, February 25th- only to be caught on camera at a protest in Trenton,” Kyrillos said. “The actions of these employees and others, who organized a disruption of bus service endangered the well-being of SCAT’s developmentally disabled and elderly clients. It is my hope that county officials will summarily be able to ascertain if others were absent without proper excuse and take appropriate action.”
Kyrillos also said the incident exemplifies the urgent need for civil service reform. “The fact that the civil service system may drag out the termination process for these employees is ludicrous,” Kyrillos said. “While some personnel matters are complex, getting caught on film being involved in an organized ‘sick-out’ and lying to your employer should be grounds for immediate termination. The fact that the system protects these employees from being fired on the spot, and may cost taxpayers thousands in legal proceedings, is reason enough to reform civil service laws.”
Middletown- In response to an apparent ‘sick-out’ staged by Monmouth County SCAT bus drivers, Senator Joe Kyrillos (R- Monmouth/Middlesex) called for the immediate firing of the 17 CWA workers involved:
“It is outrageous that 174 disabled and elderly clients who depend on SCAT were stranded by what appears to be a coordinated effort by employees to disrupt service without notice,” said Kyrillos. “The actions of these workers is completely unbecoming of any public servant, and should make every taxpayer in Monmouth County furious. CWA, the union representing these employees, needs to denounce their members for putting the well-being of these vulnerable individuals at risk, and the employees in question should be fired.”
Seventeen SCAT workers, including fourteen bus drivers for the developmentally disabled and senior citizens, took sick leave with no notice on Friday, February 25th- the same day as a coordinated demonstration organized by labor leaders at the State Capitol. Service was disrupted for 174 clients who take SCAT buses to medical appointments or work.
“The rights of workers to demonstrate, protest, and take appropriate leave from work for personal purposes are not disputed,” Kyrillos stated. “However, it is not their right to abuse sick leave and disrupt a system many people have come to rely on. In fact, it is a breach of contract and should be punished to the fullest extent possible. This type of behavior not only hurts the people SCAT serves, it harms the reputation of all public workers.”
If politics were a schoolyard fight, the most notorious bullies would be the leaders of the influential public sector unions. Their weapon of choice: the power to collectively bargain on behalf of their members, with absolutely no consideration for the taxpayers who actually pay the bills. The expedient alliance between the union leadership and politicians of both parties has built and enabled a system that has always been unfair, but today is unsustainable. Taxpayers have been beaten up for too long, with little to no help from the elected leaders whose job it is to protect the money used to finance government functions and services.
At the end of President Obama’s first year in office, the White House released a visitor’s log that identified a prominent union leader as its most frequent visitor. Andrew Stern, the president of the Services Employee Union International (SEIU) represented one of the country’s largest public employee unions. After his organization spent nearly $28 million to elect Barack Obama president in 2008, it was clear he would have a prominent voice inside the White House at a critical time.
Stern’s 22 listed visits came as the President was considering an auto bail-out that paid for the bad deals car companies made with the unions, the stimulus package that included payments to states to fulfill their obligations to public employees and a health care overhaul that ultimately exempted the unions’ “Cadillac health insurance plans” from the same mandates and scrutiny that every other American was subjected to.
In fact, of the over 200 entities that received temporary waivers from provisions in the new healthcare law, 45 were granted to union organizations. It is no wonder that the SEIU spent $44 million in the midterm elections in 2010, exclusively on behalf of congressional Democrats. Including spending by two other labor behemoths, the AFL-CIO and the American Federation of State Counties and Municipal Employees (AFSCME), big labor spent nearly $150 million dollars to preserve the Democrats majority in Congress. The taxpayers and an overwhelming majority of the American people had a different idea. With the results of the 2010 elections came a realization that the American people understood the challenges facing our states and nation better than most of the politicians and special interests that have dominated the political discourse for far too long. Newly elected reform minded governors, such as Scott Walker in Wisconsin and John Kasich in Ohio, also benefited from the example of a fellow reformer elected a full year ahead of them, and who had made a decade’s worth of progress in addressing his own state’s challenges; Chris Christie.
These leaders are doing their part to change the way their states do business and are making the tough choices that can come with a significant political risk. The unions are doing their job fighting them every step of the way, attempting to use the bullying tactics and threats that have worked for them for so many decades. For example, the New Jersey Education Association collected roughly $100 million of dues from about 200,000 members last year. How are they spending this money? In a $300,000 per week radio campaign encouraging higher taxes instead of budget cuts. Luckily, the old rhetoric of unions is lost amid the greater noise coming from the taxpayer revolt. It’s that noise that has to continue and convert into a sustained campaign among the taxpayers to counter the voices of a very vocal, and frankly better organized, minority of union interests who have never been faced with the sort of political opposition we are seeing today. When we find political leaders with the courage to do what is right, we have an obligation to back them up, not just stand on the sideline watching them fight the fight for us. We all learn in school that the only way to discourage a bully is to stand up to him. We’ve all seen that Chris Christie has the will and the backbone to endure $300,000 a week of name-calling and taunts from the teachers unions. If we see the same from like-minded reformers in Wisconsin, Ohio and elsewhere, and “we the people” stand with them, we will see the fundamental change we voted for in November, become a reality. If we stand by and allow these leaders to get overwhelmed by an opposition who believes that union workers should remain a privileged class, exempt from sharing the pain of a nation suffering a genuine crisis, than we would have no one to blame for our high taxes and dysfunctional government that ourselves.
