For true relief to New Jersey residents, there must be major reforms on the property tax formula at the state level. I call your attention back to the N.J. Path to Progress Report that I wrote about several weeks ago. You’ll recall I included a website for the 37-page report and I asked you all to read it and contact your state legislator and request that they act on it this year. Have you done that? View the report at www.PathToProgressNJ.org.
Every time I review this report, I get a pit in my stomach, as it is clear that this is a real emergency. We all know that New Jersey has had the highest property taxes in the nation for years, but this report emphasizes that the time for kicking the can down the road is over. The report clearly states the emergent nature of our situation as it breaks down the issues and potential reforms in five specific categories.
As an example, I will highlight one category here: pension and benefits. I won’t go too deep, as it gets confusing. Very simply, the pension and benefit commitments to existing state employees (working and retired) are on track to fail. There is an “unfunded liability” of $151 billion (with a B!). In layman’s terms, that means the pot of money that funds the pension checks and health benefit costs for retired Police, Fire, Teachers and other state workers is short $151 billion today. There have been steps taken to make up that difference, which call for “extra” payments to these accounts. In fact, a $3.2 billion payment to the pension fund is slated for this year. That’s the “catch-up” portion of the plan.
Obviously, there is also the “regularly scheduled” annual payment to the pension fund. We know that annual cost will increase $4.1 billion over the next four years. That increased cost is higher than the state’s total expected revenue increase over that time. Did you hear that? The state knows we will not have enough money to cover the increased cost of this one category of the budget (pensions/benefits), let alone having money for our schools or deteriorated infrastructure. Emergency!
Without action, the Teacher’s pension fund will be depleted by 2029 and the Public Employees fund zeros out in 2034. The cliff is right in front of us, within sight, not a generation or two away. I again ask you to contact our representatives in the 5th Legislative District and demand action. Our way of life in New Jersey depends upon it.