New Jersey is looking at all sorts of ideas to try to fix its budget woes – particularly its pension system. And what they decide could ultimately impact your commute.
The Murphy administation this week took what could be a first step toward developing a plan to leverage major state assets to stabilize the state’s severely underfunded pension system – and it could lead to changes in the toll system that could have you paying more to drive on New Jersey highways.
Indeed, some lawmakers say it could lead New Jersey down the path of adding toll lanes to highways other than the New Jersey Turnpike and Garden State Parkway.
- The New Jersey state treasurer issued a “Request for Qualifications” to hire a state asset financial Advisor to find savings from state assets to help fund the state pensions and benefits.
- The advisor will examine various state assets and, perhaps, put them out to bid. Those assets include: property, buildings, roads or other improvements, transit facilities, rights of way, air rights or other development rights, naming rights and infrastructure such as airports, bridges, water facilities, ports, parks and recreational facilities.
- State officials say they want to minimize the burden to taxpayers by maximizing state assets that might otherwise sit idle – a concept championed by a bipartisan legislative taskforce called the Economic and Fiscal Policy Workgroup.
- The Economic and Fiscal Policy Workgroup issued a report last year that a continuing revenue stream could grow if New Jersey adds HOT – high occupancy toll lanes – to federal interstates.
Republicans criticized the plan to leverage major state assets, saying it could lead to a “fire sale of assets” that could lead to a change in management of New Jersey highways and, ultimately, new tolls and toll increases.
“New Jersey is not for sale. There is a better way,” Senator Joe Pennacchio, R-Morris, said. “We don’t have to resort to gimmicks that failed under (former Gov. Jon) Corzine.
“Someone should remind Governor (Phil) Murphy that his Democratic predecessor’s proposed 800-percent toll hike caused a public outcry unlike anything we had seen in years. It was widely criticized by legislators on both sides of the aisle, and for good reason.”
But Jennifer Sciortino, a spokesperson for the New Jersey Treasury Department, said her office is “simply exploring ideas right now, and any assertions otherwise are baseless.”
“The RFQ we issued is looking for advisors who are willing to think outside the box to find solutions to help minimize the burden to taxpayers by maximizing state assets that might otherwise sit idle – a concept championed by a bipartisan legislative taskforce,” she said.
The Economic and Fiscal Policy Workgroup, the bipartisan legislative taskforce Sciortino was referring to, said in its report that the transfer of major assets such as the New Jersey Turnpike system into the state pension system would “generate new revenue streams” and could reduce the unfunded liability by $15 billion to $18 billion.
“Unlike previous proposals to sell the Turnpike to a private operator authorized to institute massive future toll increases, putting tollroads into the pension system would maintain public ownership and allow tolls to remain at areasonable level,” the report said.
Senate President Steve Sweeney said the Economic and Fiscal Policy Workgroup also recommended:
- Development of an inventory of state assets for potential transfer into the pension system
- Development of legislation to enable the state to transfer assets into the pension system, including a procedure for local governments to dedicate local assets in lieu of pension contributions.
“We look forward to working cooperatively with the Administration to implement the legislation that will be needed to achieve savings, as we did two years ago when we worked with the last Administration to cut the unfunded pension liability by putting the New Jersey Lottery into the pension system,” said Sweeney, D-Gloucester/Salem/Cumberland.
Sweeney noted that the New Jersey Lottery transfer lowered the unfunded liability in the pension systems for teachers and state workers by $13 billion.
“I am gratified to see the governor adopt one of our major recommendations, but this is just one part of a comprehensive solution to our state’s fiscal crisis,” Sweeney said. “We will be facing a $4 billion budget shortfall in less than four years unless we act quickly to adopt the full range of the Economic and Fiscal Policy Workgroup’s recommendations, including development of a hybrid pension system for new public sector hires and those with less than five years of service, and a shift from Platinum-Plus to Gold-level healthcare plans.”
Pennacchio called for “a fiscally-responsible alternative” to Murphy’s plan.
“New Jersey has the highest property taxes, the nastiest business climate, and one of the worst public pension debts in the country. Unless we get spending under control now, this state will continue to free-fall without a parachute towards a full economic collapse,” Pennacchio said. “Instead of having a fire sale of our assets, let’s look at responsible ways to solve our fiscal crisis. Racinos in Yonkers have sent back more than $1.5 billion to New York State. New Jersey should be next.”
As an alternative to selling off state assets, Pennacchio called for bringing racinos to the Garden State. His proposed constitutional amendment, SCR-27, would authorize slot machine gambling at New Jersey horse racetracks.
“Why would the governor even consider selling off state assets, when there are other solutions on the table? A one-time fire sale is not a long-term solution,” Pennacchio added. “Raising taxes and tolls will only force more businesses and commuters out of the state. Bringing racinos to New Jersey is an innovative way to help fund the state pension.