Eagleton hosts event to discuss economic, fiscal policy
The Eagleton Institute of Politics held a question-and-answer session on economic and fiscal policy with New Jersey Senate President Steve Sweeney (D) and Sen. Steven Oroho (R-N.J.) on Tuesday.
Joining the senators was Marc Pfeiffer, assistant director of the Rutgers Bloustein Local Government Research Center. The event began with a 45-minute conversation with the two policymakers, after which the question-and-answer took place. Topics covered included economic policy, fiscal policy and the general direction of the state's economy.
The state's economic issues are preventing investments in public education, as well as other important projects. To help solve those issues, the senators explained the Path to Progress, a plan to overhaul and fix the state's economy. The plan consists of several recommendations for the state, which, Sweeney said, are desperately needed.
“New Jersey’s public schools are the second-most expensive in the nation because we don’t invest here. We’re either 48th or 49th in investment for our public schools," Sweeney said. "There’s a lot of things I want to invest in. I don’t have the ability to do that, and just raising a tax here or there will not fix it. We’re gonna be in a $4 billion deficit if we don’t address this now."
John Weingart, associate director for the Eagleton Institute of Politics, gave opening remarks for the event, and also spoke prior to the question-and-answer period. He explained that the panel was bipartisan, as was the entire group behind the Path to Progress plan.
“This is a bipartisan panel, the kind of thing that’s supposed to not exist anymore. Whenever you think of their recommendations, it’s not just this one Democrat and one Republican, but the people behind them come from both parties,” Weingart said.
Oroho explained his working relationship with Sweeney, and the importance of working together and taking action to fix the state's economy, rather than making empty promises.
“Sen. Sweeney and I don’t agree on everything, but he has the courage to take on the tough issues,” Oroho said. “We always talk about the total cost of government. When you add all of the government-related stuff together, it’s around $115 billion. There’s a very heavy overhead burden. We can make promises, but promises are easy — payments are difficult.”
Sweeney explained the legislation that partially led to the state’s economic issue. The state’s economic problems are mainly due to pension issues.
“The pensions were over 100% funded, and by law, when your pensions are overfunded, you can make improvements. It wasn’t really overfunded, it was overfunded on paper," he said. "First thing they did was reduce their contributions by 40%. It wasn’t real, but they took 40% of the money out of the pension system. That’s bad.”
Sweeney also explained how the state’s economic situation could be prompting New Jerseyans to leave the state, which could further damage the economy.
“Investing where we need to invest makes our state a better state. Again, I’m not afraid to raise taxes if it fixes the problem, but if it’s not gonna fix the problem, it’s not a solution. I have people come up to me all the time, and tell me that when their kids leave high school, they’re out of here. Everyone’s heard that. We don’t want people to leave, we want people to stay,” Sweeney said.
Oroho further delved into this point, explaining that each year, New Jersey loses more taxable income than it gains.
“From 2004-2016, the latest data available, New Jersey’s actually lost $25 billion of tax revenue, cumulatively. We haven’t had one year where more tax money comes into the state than has left the state. And unfortunately, it’s been accelerating. One of the key things is, we need time and discipline to get out of the hole that we’re in,” Oroho said.
Pfeiffer also spoke about spending relief for local governments, and how the state government could cover the costs of disabled students rather than forcing local governments to foot the bill. Sweeney then added to that point, saying that if more money was freed up from the state’s expensive pension fund, it could be used to help accommodate students who need special education.
“Extraordinary special education would help every single school district in the state. I need $200 million to do it. We agree, we bipartisanly agree. I bet you we could get 40 votes in the Senate and 120 in the Assembly to do it. We don’t have the money. What a shame,” Sweeney said.
Sweeney said the recommendations are objective and can help fix the economy of New Jersey.
“There’s a lot in this report, that was put into by a lot of people with goodwill. Not looking to make friends, but just being honest and having a conversation to start fixing this place," he said. "New Jersey, in my mind, is the greatest state in the country. When you have people leaving because they can’t afford to stay here anymore, the people who are left behind are the ones who can’t afford to leave. That’s gonna make it hard.”