New Jersey faces a fiscal crisis of unsustainable legacy pension and benefit costs that suppress economic growth and competitiveness by crowding out needed investments in infrastructure, higher education, and the economic development that other states are making.
This is a direct result of the failure of governors and legislatures of both parties to make the necessary pension payments. But if this crisis is not resolved, it will be impossible to meet our commitment to fully fund public schools, expand preschool and make New Jersey affordable for families, senior citizens, and businesses.
Furthermore, New Jersey continues to struggle with inefficiencies at all levels of government. Steps have been taken in recent years, such as the two percent property tax cap, increasing employer and employee pension contributions, and creating a new prescription benefit procurement process. Still, many of the necessary reforms have been ignored due to a lack of political will.
That is why the New Jersey Legislature created the Economic and Fiscal Policy Workgroup and charged it with a broad mission – to identify ways to address soaring pension and benefit costs, hold down property taxes, make state and local government and school districts more efficient, assess the equity and efficiency of our state and local tax structure, leverage the value of state assets, and mitigate the negative impact of the federal tax law that targeted high-cost states.