Tax reform - Courier - Public benefit plans assailed

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Published in the Courier News, Thursday, August 10, 2006

Lawmakers assail public benefit plans
Legislative reform group questions N.J. pension and benefits director

By JONATHAN TAMARI
Gannett State Bureau


TRENTON -- Lawmakers working to rein in New Jersey's property taxes assailed the costs of public employee pensions and health care Wednesday but offered few concrete proposals for how to make worker benefits less expensive.

Sen. Nicholas Scutari, D-Linden, co-chairman of a panel drawn up to reform benefit costs, said lawmakers cannot ask taxpayers "to bear the burden of financing, in perpetuity, public employee benefits that bear no resemblance whatsoever to what is available in the private sector."

His co-chairwoman, Assemblywoman Nellie Pou, D-Paterson, added, "There's a sense of anger out there in some quarters of the public" over the benefits offered public workers.

Both also said rank-and-file workers are not to blame, and several lawmakers on the Joint Legislative Committee on Public Employee Benefits Reform said public officials also must bear responsibility for bad decisions they made that helped lead to crushing annual expenses, including billions of dollars of borrowing for pension payments in the 1990s and boosting retirement benefits without the means to pay for it.

Changes, said Assemblyman Kevin O'Toole, R-Wayne, will require courage.

"If we are really serious about reform, we have to cast a blind eye, or totally neglect the political consequence," O'Toole said.

The six-person pension and benefits panel includes three members who have drawn salaries and benefits from simultaneous government jobs and a fourth who is a labor union official.

Scutari is a city prosecutor in Linden, Pou is an assistant business administrator in Paterson and Sen. Ronald Rice, D-Newark, was deputy mayor in Newark until last month. Assemblyman Thomas Giblin, D-Clifton, is an official with an engineering union.

The committee began its work Wednesday by hearing testimony from the director of the Division of Pension and Benefits, Frederick Beaver, who covered familiar ground on the rising costs associated with public workers.

Beaver said the state has an $18 billion deficit in pension funding and is more than $20 billion behind in paying for future health benefits.

"We must achieve an equitable balance between the interests of the taxpayers and those of our good public servants," Scutari said.

A recent report by a task force appointed by then-Gov. Richard J. Codey recommended raising the public employee retirement age to 60 and increasing government workers' health care payments as ways to save money.

Corzine has called for examining those changes along with 401(k)-like retirement plans, which may be less expensive than the current options, and a two-tiered system that would give new workers less costly benefits.

Labor unions have said any changes should come through collective bargaining.

"We're willing to engage in creative bargaining to address all the issues," said Bob Master, legislative and political director for Communications Workers of America District 1, which covers the Northeastern states.


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