NJ Voters May Get a Chance to Cut Public Workers’ Benefits
TRENTON — The Path to Progress proposals that have been touted since last summer have at last been introduced in the Legislature, promising sweeping changes to public workers’ benefits, K-12 education and local government services.
They’re mostly familiar but come with one new wrinkle: Senate President Steve Sweeney says he would put the pension and health benefit changes before voters for approval if they aren’t acted on quickly.
Sweeney, D-Gloucester, said he’s willing to advance constitutional amendments switching public workers into less generous health plans and shifting new workers and those with less than five years’ service out of the traditional pension plan.
“We’d like to work with everyone to come to a solution. But if necessary, we will go to the voters and give them the opportunity to have their voices heard,” Sweeney said.
Proposed constitutional amendments get approved by lawmakers and put on the ballot without the participation of the governor. That could be important in this instance because Gov. Phil Murphy has a cooperative relationship with public worker unions who oppose Sweeney’s proposals.
“We’re not giving it up,” Sweeney said. “Listen, 2020 would be a slam dunk; 2019 I’m not sure, but I’m not ruling it out for 2019. I’m looking to get it done now.”
Murphy, in a statement, said his proposed budget includes “$1.1 billion in long-term and sustainable savings we can deliver for our taxpayers the right way, through partnership and collective bargaining rather than confrontation.”
“I will carefully review the bills introduced today to see where we can find common ground, but the bottom line is that savings alone will not help us meet the entirety of our obligations. I remain eager to work with those who share our goals,” Murphy said.
Hetty Rosenstein, the New Jersey area director for the Communications Workers of America, said Sweeney is trying to turn public workers into “a piñata” for taxpayers.
“Question every single sentence, every word, every single number. I think it is designed to create the public versus public sector workers. And that is shameful,” Rosenstein said.
The New Jersey Education Association said it is reviewing the proposed legislation but that it appears “too many of these proposals continue to target already-struggling educators for further cuts and greater economic instability.”
“We refuse to be scapegoated for the state’s failure to meet its fiscal obligations, and we refuse to be driven further and further behind economically to pay for New Jersey’s legacy of fiscal irresponsibility,” the union’s leadership said in a statement.
New workers and those with less than five years of service would be in a hybrid pension plan, with a traditional pension for their first $40,000 in salary and a cash-balance plan above that with a minimum return of 4 percent or 75 percent of the amount the pension system earns on their account. The retirement age would increase to 67.
Sweeney said actuaries project that the switch would save $28 billion over 30 years. Rosenstein said it doesn’t address the main problem causing pension payments to balloon – the unfunded liability that results from years of underpayments into the systems by the state.
State Sen. Steve Oroho, R-Sussex, said change is needed to fix a system with a $115 billion long-term deficit.
“Unless something is done, obviously the hole just keeps getting worse and worse,” Oroho said.
Sweeney said the proposed health-benefits changes – most significantly, creating health plans rated as ‘gold’ rather than ‘platinum’ under the Affordable Care Act – could save taxpayers $2 billion a year. He said local governments would be required to lower property taxes by the amount saved.
“It’s time to fix New Jersey in a way that’s going to be meaningful and long-lasting,” Sweeney said.
Beyond the benefits changes, the package of bills would also county school superintendents to develop regionalization plans to merge all K-4, K-6 and K-8 schools into K-12 regional districts.
Another bill would require the state to assume all the cost of extraordinary special education placements above $55,000 a year. Sweeney said that could cost the state – and save local districts and property taxpayers -- $200 million a year but would have to be phased in gradually.