Up and down our great state, shared sacrifice by New Jerseyans gives ever indication that we are “flattening the curve” by slowing the spread of the coronavirus. If we remain vigilant, we will prevail.
There’s another curve that must be flattened to preserve our future. As the health emergency impacts the economy, our state government is experiencing a dramatic loss of revenue, revealing a “financial curve” that clearly shows the growing gap between resources and needs. In fact, a leading ratings agency has just downgraded our state credit rating and our rating outlook to “negative.” If we don’t plan properly, the end result will be draconian cuts to education, health care and infrastructure and/or massive increases to our already highest-in-the-nation taxes.
Right now, the governor and his administration are consumed, understandably, with saving lives. While they are, a great many very knowledgeable people sheltering in place would be happy to serve the state to help focus on urgent fiscal and economic priorities — people with unparalleled fiscal and economic expertise; people with keen ideas on how to mitigate the short-, medium- and long-term impact of the crisis on our state’s fiscal position and economy.
Let’s tap the talent. Let’s reach out in a nonpolitical way and organize a cadre of these thoughtful people, tasking them to come up with solutions on how best to navigate the state’s perilous fiscal position and, at the appropriate time, the relaunch of our state economy. Call it New Jersey’s Emergency Fiscal & Economic Task Force.
To build the kind of lasting consensus necessary to support proper fiscal management of our state and a dynamic economic recovery, the task force must be transparent and include a broad spectrum of political and economic stakeholders, including representative experts from each of New Jersey’s business sectors.
Regarding our fiscal position, clear priorities and transparency are imperative to making the hard decisions. The governor freezing $920 million in current year state spending is a good start. The task force can brainstorm how best to now set other immediate and much-needed fiscal priorities.
Should we make pension payments?
As an example, not knowing the full effect of the crisis on state tax collections, we must consider whether the state should make pension payments, including the one in June. State school funding is another example. We must determine whether school districts should be advised not to factor in the 2020-2021 increases announced in the governor’s pre-crisis budget message. Regarding our state workforce, we should examine the pay freeze and temporary furloughs Gov. Corzine negotiated with the unions during the Great Recession, deciding whether to use them as a model for the current financial crisis. These are just a few of the many issues that need to be raised and discussed.
When it’s an appropriate time to relaunch our state economy, the task force can create and have ready a detailed and solutions-oriented economic recovery plan that gets New Jersey working again. In so doing, let’s be viewed as a national leader when it comes to planning ahead for what could, arguably, be the most critical six to 12 months in the history of our great state.
What will a thoughtful plan look like? A prudent start is what seven Northeast governors, including New Jersey’s, have done; namely, agreeing that their contiguous borders demand a coordinated relaunch of a multistate economy critical to the nation. What New Jersey also needs, however, is a plan specific to the unique business sectors that are critical to our state economy. The Jersey Shore, casinos, small “Main Street” businesses and urban redevelopment are just a few, but all perfect examples.
The plan also needs to address New Jersey’s own unique challenges and opportunities. To name a few . . . we must be prepared for what will happen to New Jersey’s ports and logistics industry if global supply lines shorten significantly. At the same time, the crisis demands that we, as a nation, position ourselves for the strategic imperative to bring the supply chain back to the United States. For New Jersey, this could be a boon for — to mention a few sectors — pharmacological research, pharmaceutical production and various manufacturing areas, including personal protective equipment (or PPE).
‘Made in New Jersey’
Let’s identify at least three areas where a “made in New Jersey” rallying cry is the mantra of citizens and government leaders at every level.
We must decide how best to address the particular needs of seasonal industries such as tourism and agriculture. We must view with a more critical lens proposed restrictions on business and gig working arrangements. We must determine how New Jersey can capitalize on the potential expansion of telecommuting and telemedicine. We must be best prepared to benefit if there is renewed interest in legacy suburban office parks. We must be prepared to invest wisely in infrastructure, which provides economic stimulus and, specific to transportation, is the lifeblood of any economy.
Of course, what would also be beneficial is the task force giving thought to fixing New Jersey’s worst-in-the-nation property taxes and business climate. Indeed, our past failures to address these two issues places us in an unnecessarily poorer and more difficult position to address the current economic situation. And so, fixing both would greatly improve New Jersey’s chances of experiencing a complete recovery and, subsequently, a more durable and robust state economy.
We must, we can, and we will solve this health crisis. For the sake of our state and our nation, we must plan now to save our economic future, too.