Statement of Co-Chairs of Commission on Fiscal Stability and Economic Growth Concerning the Bipartisan Budget Agreement

 

May 10, 2018

Robert Patricelli and Jim Smith today offered the following comment on the bipartisan budget agreement approved by the General Assembly

“On behalf of the Commission on Fiscal Stability and Economic Growth, we congratulate the leaders of the General Assembly on again fashioning a bipartisan budget.  We are pleased that several studies of proposals made by the Commission were authorized as part of the bill, indicating serious interest in our work.  These studies are only seeds, which might grow into structural reform in future years – rather than reform itself – but it is a start down the long road of fixing our state’s deep-seated problems. 

“Nevertheless, it must be said that the legislature once again focused on short-term budget fixes rather than on long term structural reform.  Perhaps that is all that can realistically be expected in a short session and in an election year. 

“Now we must all work to make the upcoming election a referendum on competing plans to deal with the “burning platform” of fiscal, growth and competitiveness issues that truly threaten our state.

“We look forward to working with the legislature to implement the studies it has called for, and to be a part of the public dialogue in this critical election year.”

 

·         Following are the major structural reforms that were called for in the Commission’s March report, with notes on whether the budget bill took action on them:

·         Moving to a pro-growth rebalancing of our tax system to permit a major cut in income taxes. (Appoints a new 7-member study panel, including representatives from the Commission and the 2015 Tax Panel, to make recommendations by January 1, 2019);

·         Finding ways to cut at least $1 billion out of state spending. (OPM given $300,000 to hire a consultant to identify $500 million in spending reductions and operating revenue enhancements, to make recommendations by February 1, 2019);

·         Reforming collective bargaining so that state employee pension and health care policies are analyzed and debated out in the open and determined by the legislature, and fixing the flawed binding arbitration process. (No action taken);

·         Reforming our broken legislative process of budget management and assessing the institutional capacity of our legislature to deal with the issues it faces. (No action taken);

·         Reforming the Teachers’ Retirement System. (Creates a new 6-member panel to study Commission proposals to contribute net lottery revenue to improve funded ratio and lower annual required contributions, and to create hybrid defined benefit/contribution plan for new teachers with risk sharing on investment returns, report by January 1, 2019);

·         Adequately funding our transportation infrastructure needs for the long term. (No action on tolls; short term bonding fix);

·         Giving municipalities additional sources of revenue and incentives to engage in regional service delivery.  (No action taken—folded into tax study, above);

·         Focusing targeted resources on workforce and economic development in key sectors. (No action taken).