NJ Business Matters: The Blog of the CIANJ

Senate State Gov't Committee Moves Pension Package Forward

The Senate State Government Committee has just advanced a package of CIANJ-supported public pension reforms. The full Senate is expected to vote on the reforms Monday.

 

The legislation makes significant changes to New Jersey’s underfunded public pension system. Some of the major changes include,

• Requiring current employees and future retirees to contribute at least 1.5% of their salaries toward health benefits
• Placing new hires who work less than 35 hours per week into a defined-contribution system
• Rolling back the 9% pension increase passed by the legislature in 2001
• Capping sick time cashouts at $15,000 upon retirement for all public workers
• Putting to the voters a Constitutional Amendment requiring the state to make its full annual payment to state retirement system

New Jersey’s public pension program is underfunded by an estimated $34 billion, and its unfunded health care liabilities are even greater. CIANJ urges the Senate to pass the package advanced by the Committee and passage by the General Assembly before this year’s budget introduction.

U.S. Takes Another Step Toward Expanding Nuclear Power

Five years after loan guarantees were formally introduced to American energy policy, President Obama finally utilized the tool to expand America's nuclear infrastructure.

From the President's remarksto the IBEW Local 26 in Lanham, MD

Now, I know it has long been assumed that those who champion the environment are opposed to nuclear power. But the fact is, even though we have not broken ground on a new nuclear power plant in nearly thirty years, nuclear energy remains our largest source of fuel that produces no carbon emissions. To meet our growing energy needs and prevent the worst consequences of climate change, we’ll need to increase our supply of nuclear power.  It’s that simple.  This one plant, for example, will cut carbon pollution by 16 million tons each year when compared to a similar coal plant. That’s like taking 3.5 million cars off the road.

New Jersey, like America, cannot meet its carbon reduction goals without a strong nuclear segment.

BPU Votes for Electric Grid Reliability

The New Jersey Board of Public Utilities has approved PSE&G's request to improve transmission lines so that the lines can meet demands expected in 2012. The 45-mile swath across New Jersey, known commonly as the Susquehanna-Roseland line, will result in towers nearly twice as high as existing structures.

CIANJ President John Galandak testified in favor of the improvement last year. From his remarks, as prepared,

New Jersey businesses will need a reliable source of electricity at a reasonable rate in order to sustain themselves and grow profits in the future. Each dollar spent on higher rates or time lost due to a brownout or blackout means fewer resources to hire employees, improve products and service customers. That is why CIANJ members find some of PJM’s findings so disturbing.

As this panel is aware, PJM, an independent group tasked with ensuring grid reliability, warns that without this upgrade, the region risks brownouts and blackouts beginning as early as 2012. While the state legislature and governor have outlined goals for generating energy through renewable resources, the technology to provide a baseload does not yet exist. Furthermore, statute sets the goals for 2020, eight years after PJM warns of power disruptions to the region.

This is a well-planned and much-needed project. Cheers to the BPU for recognizing New Jersey's role in electric generation and transmission, and for helping ensure grid reliability. 

You've Got the Beat

This week's issue of the CIANJ Business Beat has been posted to our homepage. Included in the e-newsletter are:

• CIANJ statements regarding the Governor's budget message, links to presentations and a per-district breakdown of withheld funding.
• News on Craig Becker's nomination to the National Labor Relations Board
• Event info for our Real Property Roundtable, Member Welcome Reception and Women of Influence Program

The full issue is available at this link.

Your Car Isn't the Only Thing Frozen Today

At 10:30 a.m., Governor Christie will deliver his first address to a joint session of the legislature. The gov will discuss New Jersey's deficit, which is estimated to be $1.2 billion for the remainder of this fiscal year. The New Jersey Constitution requires that gap to be filled by the fiscal year's June 30 closing.

CIANJ President John Galandak and members of our Executive Committee and Legislative Committee are making their way to the gallery.

Here are some quick links for previews and viewing:

• NJN will carry the speech and reactions live, and also archive the entire event to their site.
• The Asbury Park Press reports the governor will freeze unspent state funds, and declare a fiscal state of emergency
• The Star-Ledger reminds us that the governor has previously signaled that he will use broad executive powers to solve the emergency

We'll post our reaction soon after the speech concludes.

CIANJ Applauds Exec Order Freezing COAH, Creating Task Force

Yesterday, Governor Chris Christie signed Executive Order 12, which establishes a Housing Opportunity Task Force and immediately freezes action by the Council on Affordable Housing (COAH), pending the Task Force’s 90-day review.

The full text of Executive Order 12 is available at this link.

The governor also announced that former Senator Marcia Karrow would chair the Task Force.

CIANJ President John Galandak issued the following statement in response:

“Today’s action is another step in dismantling a burdensome and unworkable set of rules and replacing them with a system that allows municipalities to meet their constitutional requirement. The command-and-control system has already been applied and it yielded higher fees to the private sector, increased costs to towns and very few units of affordable housing.

We have great confidence that Senator Karrow and the Task Force will be thorough in their review and innovative in their recommendations. We also encourage the Administration to work closely with the legislative leaders who are also studying the situation and drafting overhauls.

All stakeholders, including housing advocates, have determined that the status quo in unacceptable. In three months, we look forward to a reasonable and effective housing policy that is based on market principles and reduces the unnecessary burden on taxpayers.”

Tax Foundation Pres Talks Out-Migration

Last week, we offered our commentary on a Boston College study demonstrating a $70 billion evacuation of wealth from the State of New Jersey between 2004 and 2008.

Hat tip to the Tax Foundation, and their President for taking to Fox News Channel to discuss the report with Neil Cavuto. Among the topics: the mobility of the wealthy, their impact on jobs, and New Jersey as a microcosim (warning sign) for Congressional leaders who might think the nation can tax itself into prosperity.

Public Employee Pension Reform Goes on the Table

Twenty-nine members of the New Jersey Senate co-sponsored parts of a legislative package that was introduced yesterday and would finally make substantive changes to New Jersey's public pension system, making it more solvent.

Taken together, the package would

• Require current state employees to contribute at least 1.5% of their overall salary toward their health benefits, and require future retirees to contribute 1.5% of their pension payments toward health benefits.
• Exclude part-time workers from the pension system and enroll them in a 401(k) style program. A full-time employee would be defined as one who works 35 hours per week
• Repeal the 9% pension boost passed in 2001 (the famous n/55 formula)
• Cap payout for unused sick time at $15,000 for all government workers
• Advance to the voters a Constitutional Amendment requiring state government to meet its annual pension payment obligation.

New Jersey's public employee pension is currently in a $34 billion deficit and its unfunded health care obligations are estimated to be even greater. After extensive work by a special session of the legislature in 2006, which proposed many of these changes, then-Governor Corzine pledged he would fight them. In the interim, the deficit has continued to grow more unsustainable.

Many of these changes have been previously supported by CIANJ, as the Association advocates for taxpayer protection and bringing government practices more in line with the private sector.

We applaud the first step taken by lawmakers to make necessary substantive changes to a state that cannot afford to do without them.

OLS Budget Chief Confirms New Jersey Still Broke

The Budget Officer for the non-partisan Office of Legislative Services told members of the Senate Budget and Appropriations Committee that the state remains in the same fiscal hole it was when he spoke to their counterparts in the Assembly last week. The $1.3 billion deficit for the current fiscal year is constitutionally required to be filled by June 30. The current projected deficit already takes into account the $1 billion in savings identified by Governor Corzine.

The biggest deficit in terms of dollars remain in sales tax and income tax. The sliver of good news is that the sales tax figure may begin an upward trend once December figures are released. Budget Officer David Rosen also revealed that the deficit has been exacerbated by a $170-$180 increase in the demand for services through Medicaid.

This is further evidence that this year's budget requires the long-overdue conversation over the proper role and size of government in New Jersey.

AFL-CIO: Who Needs the Senate To Pass New Law?

Over on Huffington Post, Stewart Acuff, Chief of Staff for the Utility Workers Union, writes that organized labor is preparing to bypass the Senate and get its job-killing card check measure enacted through Obama appointees to the National Labor Relations Board,

[If] we aren’t able to pass the Employee Free Choice Act, we will work with President Obama and Vice President Biden and their appointees to the National Labor Relations Board to change the rules governing forming a union through administrative action to once again allow workers in America access to one of the most basic freedoms in a democracy–the freedom of speech and assembly and association so that workers can build the collective power to challenge the Financial Elite and Get America Back to Work. (emphasis ours. cutesy capitalization near the end of the paragraph, theirs)

The AFL-CIO is now transparent in its recognition and strategy. The Employee Free Choice Act is barely alive in the Senate, and the odds only decrease with the seating of Senator Scott Brown (R-MA). Big labor is now developing a strategy to ram its agenda through the administrative process.

Regardless of an individual Senator's feelings on card check and the misnamed Employee Free Choice Act, shouldn't they all be upset that the AFL-CIO is openly trying to do an end-run around the legislative branch?