by Steve Sweeney, Senator (D-Gloucester), President of the New Jersey Senate
View the entire newsletter for more articles: 2019 – NJAC County Biz – September
As county officials, you don’t need a poll to know that our highest-in-the-nation property taxes are the biggest issue facing New Jersey. You hear it every day. It’s a heavy burden for middle-income families trying to make ends meet, it makes it harder for millennials looking to buy a starter home, and it’s the No. 1 reason that so many senior citizens leave the state to retire.
The 2% cap on county, municipal and school district spending has slowed the rise in property taxes. However, without fundamental structural reforms that will produce lower property taxes, New Jersey residents will struggle with affording to live here.
We can save $1.7 billion a year for property taxpayers – $500 a year for the average residential homeowner – by implementing the Path to Progress pension and benefit reforms developed by the bipartisan Economic and Fiscal Policy Workgroup, a blue-ribbon team of economists, academics, tax policy experts and legislators. It is a plan that properly balances the needs of taxpayers with our obligations to our public employees and retirees.
We must make the long-term changes needed to fix our underfunded pension system while preserving retirement security for both current employees and retirees. We need to spend our healthcare dollars more wisely but maintain the gold standard level care. We need to create K-12 regional and/or countywide school districts that will provide better education at less cost. And we need to expand shared service programs with leadership at the county level.
The legislation we are crafting properly balances the needs of taxpayers with our obligations to our public employees and retirees.
We are recommending the creation of a hybrid pension system for non-uniformed employees that preserves the current defined benefit pension system for all state, county and municipal employees and teachers with more than five years of service.
It would put new hires and non-vested employees with less than five years into a hybrid plan that provides the same pension that other employees receive on their first $40,000 of income and adds a cash balance account that provides a guaranteed 4% return or 75% of pension fund earnings on income above that.
To control healthcare costs, we recommend shifting all employees and retirees from the current Platinum level plans to a Gold plan with an 80% actuarial value comparable to coverage offered by the best private sector companies.
This would not only save over $2 billion for property taxpayers and the state budget, but also reduce payroll premium deductions for public employees by hundreds of millions of dollars.
As a former Gloucester County freeholder-director, I know the critical role that county governments can play in providing the leadership, coordination and built-in economics of scale that make shared services work.
This year’s budget allocates $10 million for shared services, and we have been coordinating with the Governor’s shared services czars to ensure that the money is well spent.
We can all agree that funding should be set aside for a shared services coordinator for each county. Along with the county governments, these coordinators will work with the czars, the state Division of Local Government Services and the leaders of their towns to identify the best shared services opportunities in each county.
We also agree on the need to provide state funding for feasibility studies for the creation of regional K-12 school districts, which will improve the quality of education while promoting cost efficiency.
We would also like to see at least one or two counties with smaller student populations move forward with countywide school district pilots.
These initiatives — along with our plan to have the state take over all Extraordinary Special Education costs from school districts —will provide long-lasting property tax relief.
We cannot wait any longer to fix our long-term fiscal problems and make living in this great state more affordable for all of our citizens.