Sweeney to make final push on pension, health plan cuts

The Senate President said he would make one final push to pass two bills during lame duck that would make deep cuts to the public worker pension and health care plans, before putting the two before voters in 2020.

That decision would effectively bypass Gov. Phil Murphy, who has been staunchly opposed to the measures.

Murphy has strong ties to several public unions that would be most impacted by the proposals, such as the New Jersey Education Association, which sunk $2.5 million into the pro-Murphy “dark money” group New Direction NJ.

One proposal would cut public worker health plans from the equivalent of a platinum level of coverage under the Affordable Care Act to a gold level of coverage. The second creates a hybrid retirement system, wherein the first $40,000 of income is subject to pension, and the rest to a 401k-style plan.

Both are part of Senate President Stephen Sweeney’s, D-3rd District, “Path to Progress” proposals, which also look at how the state can save money by renting or selling off certain assets, and merging county, municipal and school services.

“We’re not looking to hurt anybody here. We just want to make sure that the benefits that are promised are actually going to be there when they retire,” Sweeney told reporters Wednesday afternoon at the New Jersey League of Municipalities conference in Atlantic City.

New Jersey owes roughly $151 billion of pension and retiree health benefits, a debt fueled by decades and prior gubernatorial administrations that sweetened benefits for workers without increasing contributions, and deferred annual payments.

Combined, the proposals could save tens of billions of dollars over the coming decades, according to Sweeney and other advocates.

“The problem is, we’re out of time,” Sweeney told attendees at the Wednesday panel. “Unfortunately, we’re the ones that are here to deal with it.”

Sweeney has kept the option on the table since first announcing in May that the proposal be put before voters as a constitutional amendment ballot question in the 2020 presidential election.

For that to happen, lawmakers would have to pass the measure by a supermajority in both houses by the summer, or a simple majority for two consecutive years.

The latter option means that the Legislature would have until Dec. 31 to approve the ballot question the first time.

Assembly Speaker Craig Coughlin, D-19th District, has put forward his own plan – favored by the NJEA and still opposed by Sweeney – which could save the state $300 million in health care costs.

Dozens of other Path to Progress bills have made their way through the state Legislature, all dealing with how local governments and school districts, especially smaller and less populated ones, can combine redundant services.

Those proposals call for towns, cities, county governments and school districts to pool resources for local-level services such as police departments, parks and recreation, sanitation or the health department. Sweeney has also proposed, more controversially, merging many non-K-12 districts into regional school districts.