We Must Move Forward on Pension and Budget Reform

Now that the 2016 budget debate is over, we must get back to the most pressing state issue of our time.  The suggestion of some in the public worker sector that those of us who voted against the budget are in favor of our abandoning our commitment to ensuring their pensions is completely false.  For any responsible elected official, and decent human being, it is imperative that we meet our commitments in a way that protects our pubic workers – and the NJ economy at the same time.

The reason we couldn’t make a payment larger than the $1.3 billion one included in the Governor’s budget has nothing to do with a lack of will or integrity.  It’s about devoting as much $ as possible without inflicting massive, economy-killing, tax increases on an economy just now showing signs of real growth.  Without economic growth there will be no chance we will be able to meet our commitments to the system in the many years to come – so ensuring growth is as important to public workers as anyone else.  We don’t simply have a $1.8 billion deficit this year. We have a $6 to $7 billion hole over the next few years. Taxing the life out of our economy this year, with no plan going forward – and leaving us in a $2 billion hole next year as the Democrat’s proposed budget would – is bad policy, for all New Jerseyans.

But it is true as well that we can’t foster growth to the exclusion of our obligation to our dedicated public workers.  And I can’t state that point vehemently enough.  Our teachers and other public workers are decent, devoted, professional people.  Generalizations to the contrary are without merit.

It is also true that the $1.3 billion – while one of the largest contributions ever – doesn’t meet the level we promised in the 2011 reforms.  There is no one that’s happy about that.  But the recovery we have experienced nationally – admittedly particularly here in NJ – hasn’t met the reasonable expectations the parties to the agreement relied on. Before we all jump into attack mode, placing blame and pointing fingers, let’s understand that the growth projections came from unbiased actuaries that relied on data from previous recoveries over 75 years.  There was no nefarious plot.  Governor Christie and Senator Sweeney relied on those projections in good faith. Find a boogieman somewhere else.  And you can’t blame Christie administration policies for the low growth in NJ. He has only argued for more, pro-growth policies.  Nothing this administration has done can legitimately be suggested to have depressed economic growth.

But now, all that came before is irrelevant.  We MUST move on – together – and solve our overarching budget issues – which essentially encompass pension funding.  We can’t afford to miss this opportunity – where our challenges are so acute and the solutions so close at hand at the same time.  We have better and more comprehensive data – about the depth of our challenge and the substance of our options – than we have ever had before.  The Pension Review Commission report and plan are incredible documents.  Their comprehensiveness and detailed solutions are unlike anything produced by NJ government previously.  And public workers should hesitate before condemning the Commission.  These people are a bi-partisan group of the most substantive folks ever assembled for such a task.  Many of them Democrats.  Tom Byrne is a former Democrat State Chairman and an expert on government finance. Tom Healy, who spearheaded the effort, is eminently qualified, and no partisan.

Governor Christie didn’t stack this Commission.  His choices were honorable and dedicated to real assessment and solution.

Those solutions include enshrining a payment schedule in the constitution (which should ally the oft-mentioned trust issue), will not cut accrued pensions and won’t be too painful for our public workers.  Going from “platinum” level health plans to some still north of “gold” shouldn’t be an outrageous proposition.  And nothing is set in stone.  Given our growth projections and other positive signs, the reforms need not be draconian – if we act now.  Anyone whose plan it is to simply wait out the next few years expecting a new, more malleable Governor should think twice.  The challenges will remain – but the hole will be deeper and the remedies more painful.

Our children and grandchildren will talk about this moment in one of two ways – either how their parents came together to rise above politics and seize this opportunity to fix New Jersey, or how we abdicated our responsibility and blew the last chance to save her.  If necessary I am willing to expend the last breath of my political career fighting for the former.

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PAID FOR BY Assemblyman Declan O'Scanlon

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