Hitting the town-hall circuit to pitch the latest big policy initiative is a time-honored tradition in New Jersey, and in recent years governors from both parties have crisscrossed the state to drum up support for everything from property-tax reform to privatizing state highways.
But this year, it’s Senate President Steve Sweeney, the veteran Democratic lawmaker from South Jersey, who’s making the rounds, as Gov. Phil Murphy has so far been reluctant to use the town-hall format as a way to sell his priorities to New Jersey residents.
Sweeney (D-Gloucester) has been whirling around the state to generate support for a series of ambitious fiscal-policy changes that he believes are crucial to fixing New Jersey’s longstanding budget problems, including the troubled public-worker pension system.
“Let’s fix this before it’s too late,” Sweeney said earlier this month during a town hall that drew a big crowd at Rowan University in Glassboro.
No friend to Murphy
To the casual observer, it might appear that Sweeney is coming to the aid of Murphy, a fellow Democrat who so far seems more likely to participate in roundtables and other choreographed press events. But the reality is far from it, as Sweeney’s town-hall message — which is basically that New Jersey is in “dire, dire circumstances” that demand immediate action — is in many ways a direct challenge to Murphy. The first-term governor has been emphasizing a more deliberate and cooperative effort that gives public-employee unions a seat at the table as they try to identify new savings opportunities and economic policies.
It’s well known in Trenton that the two leaders don’t see eye to eye on many issues, and they’ve already clashed on taxes and spending. While Murphy has so far held back any direct criticism of Sweeney’s town-hall tour, his allies in the powerful employee unions are starting to show up to give Sweeney a hard time.
In fact, he faced a largely hostile reception during a town hall held last week at Union County College in Cranford that drew a large number of public workers. At one point a fistfight almost broke out between one of the workers in the audience and two men who appeared to be defending Sweeney as the Senate leader railed against the cost of employee healthcare.
“That’s what we don’t need,” Sweeney said afterward when tempers had cooled. But he quickly added, “I’m not backing away, and I’m sending a message — we need to fix it.”
Getting word out on policy changes
Underlying the message that Sweeney has been preaching at the town halls is a list of recommendations that were issued last August by a nonpartisan group of fiscal-policy experts who were assembled by the Senate president last year.
The group was brought together as a response to new federal tax initiatives enacted by President Donald Trump that have hurt many New Jersey residents, in part by limiting their ability to fully deduct state and local taxes, including property taxes. With a limit set at $10,000 on the SALT write-off, many, including Murphy, have raised concerns that the new federal policy could harm the state economy and cut into the revenue stream for New Jersey’s already strained budget.
In response, the fiscal-policy experts released a report called the “Path to Progress” that reviews dense policy subjects like the uniformity of school curriculums and the design of certain taxes and deductions. Though complicated in nature, all of the recommendations are aimed at cutting the cost of government, from the local level on up to the state.
The report also takes on the state’s pension-funding issue by calling for the creation of a new, less-generous retirement system for public workers who aren’t yet vested in the state’s existing pension plan. Government employees would also be offered new health-insurance coverage that would shift more of the costs onto their plate, according to the report.
It’s those elements of the plan that the policy experts believe can bring big savings to the state and its taxpayers. But they are also the things that are drawing the most controversy and the heaviest pushback from worker unions.
No friends to Sweeney
To be sure, Sweeney is no stranger to fights with public-worker unions. His policy collaborations with former Republican Gov. Chris Christie resulted in a round of changes to public-worker benefits in 2011 that remain a sore spot today. The New Jersey Education Association, the state’s largest teachers union, also unabashedly played a big role in an unsuccessful effort to unseat Sweeney from his seat in the Senate in 2017.
But during the town halls, Sweeney, who is an official of the International Association of Ironworkers, attempts to use his own mix of labor credentials and experience with private-sector pensions to dispute the notion that he is picking on public workers or seeking revenge. As a sign of good faith, he said during last week’s town hall at Union County College, that no legislation has been drawn up in the wake of the fiscal-policy report because he’s still trying to foster a collaborative approach that could involve worker unions.
“We want to have a dialogue,” Sweeney told the largely skeptical crowd.
Part of Sweeney’s town-hall lecture also includes a lengthy, blame-everyone history lesson on how the state ended up with an unfunded pension liability that now totals well over $100 billion by some estimates, or roughly three times the size of the state’s annual budget. Democrats and Republicans are responsible for underfunding the pension system, as are worker unions who at times looked the other way as pension bonds were issued and benefits sweetened by past governors.
“Unfortunately, it was the decisions made in the 1990s that broke the state. It’s that simple,” Sweeney said during the event at Rowan University.
Still, there are other parts of Sweeney’s background and record that make him an unlikely leader of a new fiscal-reform movement, at least in the eyes of public workers. For example, left out of his version of events is how a series of tax cuts and other economic policies that he and fellow Democrats who control the Legislature agreed to enact during Christie’s tenure are impacting the state’s current revenue stream.
Those cuts included a reduction of the state sales tax and the outright elimination of the estate tax. Business taxes were also slashed, and lucrative tax breaks were offered to corporations through the state Economic Development Authority.
The value of the bipartisan tax cuts had risen to $4.5 billion during the 2018 fiscal year, and Christie pitched them as providing significant relief to taxpayers. But the state pension payment that year should have totaled $5 billion. Instead, it was just $2.5 billion, meaning the funding hole was only made deeper. Meanwhile, state Treasurer Elizabeth Maher Muoio is predicting corporate tax incentives will cost the state budget another $1 billion in lost revenue over each of the next four fiscal years, even as the annual pension obligation has pushed beyond $5 billion.
Murphy’s plan to address the issue of pension funding involves gathering the resources needed to get the state up to a full payment in a matter of years, even if it means hiking taxes on wealthy residents and scaling back the scope of corporate incentives, which are up for renewal later this year. Murphy has also been working closely with union leaders to find ways to reduce healthcare spending wherever they can.
“As I’ve said from day one, I believe in the power of collective bargaining and negotiating in good faith with our workforce,” Murphy said over the summer.
NJEA identifies $500M in savings
Steve Baker, a spokesman for the NJEA, pointed to cost-saving initiatives that his union has worked on with the Murphy administration in recent months, with estimates that up to $500 million in savings will be realized through 2020.
“The key here is that when we are at the table, we are leaders in coming up with innovative ways to save money and protect the quality of benefits,” Baker said.
Asked for a response to Sweeney’s town-hall message, Baker said: “We refuse to be scapegoated for the state’s failure to meet its fiscal obligations, and we refuse to be driven further and further behind economically to pay for New Jersey’s legacy of fiscal irresponsibility.”
Hetty Rosenstein, state director of the Communications Workers of America, said more than $1.5 billion in savings have been realized through cooperative efforts to change pharmaceutical benefits policies, which is something Sweeney also called for. Other discussions are underway to address the actual cost of health benefits without just shifting more of the cost onto the backs of workers, she said.
Rosenstein called the narrative Sweeney is using at the town halls “dishonest” and suggested his real goal is to use the events to shift attention away from the Christie-era tax policies that are the true cause of the state’s fiscal problems.
“He has the temerity to put this at the feet of some clerical worker and say her pension and healthcare is too good,” Rosenstein said.
“This is just absurd,” she said. “It is Trumpian.”
Despite that sharp criticism and last week’s bumpy ride in Cranford, Sweeney is pressing on with his more urgent town-hall message. The next public event is scheduled for tomorrow at Rowan College at Burlington County in Mount Laurel, and staffers say others are still being planned.
During an interview after the event in Glassboro, Sweeney said he would be on the road “as long as it takes” and compared the effort to a similar exercise he mounted several years ago to lay the groundwork for changes to the state’s school-aid law. That push also featured public events held throughout the state, and the sought-after revisions were ultimately enacted with Murphy’s cooperation last year.
“My hope is really to keep this in front of everybody, like I did with school funding,” he said. “If you keep it in front of people, then they’re going to start talking about it, and then it’s going to require a fix.”
For his part, Murphy, has held only a few in-person town halls since taking office in early 2018. Most came last spring after the governor put forward his budget plan for fiscal 2019. Murphy hasn’t entirely shied away from the unscripted, question-and-answer format, but he seems to prefer the more controlled environment of radio and television call-in shows.
An opening for Sweeney
Ben Dworkin, director of Rowan University’s Institute for Public Policy and Citizenship, suggested it may be Murphy’s own reluctance to hit the town-hall circuit that has created an opening for Sweeney to try and seize the narrative on fiscal policy.
“It creates a vacuum for an agenda,” Dworkin said. “It creates a vacuum for a voice.”
Like it or not, Dworkin said town halls are a necessary tool for governors who want to generate support for their own initiatives since New Jersey doesn’t have a dominant commercial television station that covers the entire state.
“There are not a lot of options if you want to convince the public about a particular issue, except for town halls,” Dworkin said. “The way you do it is, go out and convince people and build grassroots support.”
Murphy’s office didn’t respond to requests for comment for this story. But the governor did hint in response to a question he fielded following a recent news conference that he may be ready to take another shot at holding town halls.
“I’ll be out there,” Murphy quipped. “Would you like me to invite you?”