Serious progress in Trenton. That’s not a joke. | Moran

Posted Feb 26, 2020

Today, for something completely different, let’s pause to note some positive news in Trenton, the progress in the long fight to address the state’s fiscal crisis.

No, this is not a joke. Over the last decade, New Jersey has invested more than $20 billion into its depleted pension funds. In the decade before that, the state invested only $2.5 billion. That’s undeniable progress.

And the trend towards sanity, which began under Gov. Chris Christie, is accelerating. Gov. Phil Murphy and Senate President Steve Sweeney are rivals who can’t seem to stand each other personally. But they agree on this.

Murphy now proposes another record deposit, for $4.9 billion in a single year. That will swallow up about 12 percent of the state budget, a staggering sum.

Think how much has changed. Gov. Christie Whitman invested less than $1 billion over her nearly two terms. Gov. James McGreevey put aside even less, just $101 million. Gov. Jon Corzine invested just $2.1 billion.

But it turned around after 2011, when Christie and Sweeney collaborated on a bipartisan reform to cut benefits and increase pension payments, gradually, until they reached today’s level.

Sweeney wants to fix this even faster, by seeing Murphy’s deposit and raising it by $1 billion in the coming year, financed by cutting other programs in the proposed budget. That’s just about what the actuaries say we should be setting aside. It would be full funding for the first time since the dinosaurs roamed the Delaware Water Gap.

There’s more. In the past two years, state spending on health care for public workers has dropped by $400 million a year. That’s a big accomplishment in a day when health care costs are soaring, and it’s the result of collaboration between the governor’s office and labor unions.

Sure, it’ll take years more effort to really fix the state. Our unfunded commitment to provide health care to retirees is a scary $90 billion, according to Treasury, and we are stuck with high pension payments for many years to come. We still rank near the very bottom by almost every measure of fiscal health.

Sweeney believes we could save another $1 billion in health costs by giving public workers benefits that would qualify as “gold” rather than “platinum” by Obamacare’s measure. He also wants to reduce pension benefits for new hires, and he has bipartisan support on both fronts. So, this fight is not over, not by a long shot.

But for one day, at least, let’s note the progress. The attitude in Trenton was far more reckless in year’s past.

Consider the numbers: Had all previous governors made full payments as they should have, the pension cost this year would be $700 million, according to the Department of Treasury. So, we are paying a penalty of $4.2 billion next year to make up for Trenton’s past sins.

The lesson has sunk in. No one wants to go back to the days of shorting the pension fund. Even Republicans, whose mission is to cut state spending, make an exception for the pension funds, and support these huge investments.

“I haven’t heard anyone on either side of the aisle say we shouldn’t fix this,” says Assemblyman Jon Bramnick (R-Union), the GOP leader.

Imagine that.

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