The state Legislature’s top elected official formally rolled out long-awaited draft legislation for over two dozen bills collectively termed the “Path to Progress” proposals – aimed at cutting property taxes and reducing the state’s pension and health care liabilities.
The Thursday afternoon move by Senate President Stephen Sweeney, D-3rd District, just as budget talks pick up, could set up yet another political showdown with the Murphy administration, which has remained frosty on the proposals.
Sweeney said Thursday that he would unveil two constitutional amendments to go before voters – one dealing with his public worker health care proposal and the other with retirement – in an effort to force Murphy’s hand on the measures if he does not approve them.
He also said he was doubtful of putting the question before voters in elections this November so the next window would be the 2020 presidential elections, which will also include a voter question on whether to legalize recreational marijuana.
Senate President Stephen Sweeney, D-3rd District, said at a Thursday afternoon press conference that he would unveil two constitutional amendments to go before voters in an effort to force Gov. Phil Murphy’s hand on the proposals if he does not approve the measures.
One of the proposals, Sweeney said, calls for reducing pension obligations for state workers with less than five years of state service by raising their retirement age to 67 and adopting a hybrid of a pension plan for the first $40,000 of salary and a 401k-style retirement for anything above that amount.
That would save $24.8 billion over the next 30 years for state and local governments combined, and reduce their pension liability by $17.8 billion over that same time frame, Sweeney’s office said.
Another likely ballot question, Sweeney said, would shift public worker health care plans from the equivalent of a platinum level of coverage under the Affordable Care Act to a gold level of coverage – which means more costs that the workers would have to shoulder.
Sweeney has argued that the gold-level plans still cover roughly 80 percent of a members health care costs and would be by no means a skimpier coverage option.
Two proposals would scale back the health care obligations for the more generous teacher’s health plan, called the School Employees Health Benefits Plan. The first calls for dissolving the SEHBP and moving its members into the plan for state workers, called the State Health Benefits Plan.
The second proposal calls for eliminating the SEHBP plan design committee – which sets the rates and coverage levels for the plan – and fusing it into the SHBP’s plan design committee.
“It’s time to fix New Jersey in a way that’s meaningful,” Sweeney said.
All of the draft proposals were first unveiled in August by Sweeney’s 25-member economic and fiscal policy workgroup’s Path to Progress report, which the South Jersey Democrat said would save the state billions of dollars over the next several decades.
“The surest way to deliver on this vision and set New Jersey up for a more solid fiscal future is to work with the budget I put forward, including the millionaire’s tax, and ensure long-term stability in a fair and sustainable way,” Murphy responded in a statement.
In the next year alone, the health care proposal by itself could save hundreds of millions of dollars for the state, Sweeney said, which could negate the need for Murphy’s proposed millionaire’s tax on earners above $1 million.
“We’ve done a lot of talking. We’ve done a lot of town hall meetings,” Sweeney said. “I’ve said to people you can shout and holler all you want. We’re going to fix New Jersey.”
“New Jersey needs a budget that grows and strengthens our middle class, makes our state work for families instead of the special interests, delivers real property tax relief, improves our top-tier public schools, and honestly tackles long-standing issues like crumbling infrastructure and our pensions,” Murphy said.
Sweeney unveiled the bills just as budget talks are about to pick up, and said he plans to get as many of them as possible passed before the June 30 budget deadline.
That would set up another showdown with the governor, who has insisted that cost reductions can be done through collective bargaining, such as the $120 million four-year contract with the Communication Workers of America, and another round of health care savings announced in a September-deal between the administration and the New Jersey Education Association.
Both the NJEA and CWA back Murphy and are bitter rivals of Sweeney, arguing his plans would decimate their collective bargaining power.
“The budget we put forward is built upon $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,” Murphy said.
One measure calls for merging all non K-12 and PreK school districts into regional school districts, while another calls for establishing five county-administered school districts.
Murphy warmed up to the proposal of establishing at least two county-wide school districts.
Several of the measures are already at various stages of progress in the state Legislature.
Senate Bill 3246, which was approved by the Senate in December and last by the Assembly Appropriations Committee in March, would allow the owners of certain businesses to pay some of their state taxes through the businesses they own — a move which proponents say will soften the impact of the federal $10,000 cap on state and local property tax deductions.
Another measure – which Murphy has also warmed up to – is Senate Bill 3042, which authorizes the state to find a third party claims adjuster to real-time scrutinize state employee health care claims and shave off millions of dollars of potentially wasteful expenses.
Assembly Bill 1851, which stalled in the state Legislature last year, would cap how much unused sick leave and vacation time that public workers can cash out – an amount which has reached hundreds of thousands of dollars for some workers.
Sweeney said that many of these measures had sponsors in the lower house. Although there were not any Assembly members at today’s press conference, especially Assembly Speaker Craig Coughlin, D-19th District, Sweeney said that many of the proposals had support in the lower house.
“I recognize the hard work of the Senate Democrats and will review the proposals introduced by the Senate President,” Coughlin said in a statement. “It is important that we continue discussions surrounding economic prosperity and ensuring government, at all levels, runs as efficiently and effectively as possible.”
“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,” Murphy added. “My budget is about putting New Jersey on a new trajectory for the long term, and I am committed to working with the Legislature to do just that.”