Hundreds of public workers in matching red t-shirts jammed into a packed auditorium in Union County Wednesday night to tell Senate President Steve Sweeney exactly what he can do with his plan to cut their health and pension benefits.
“I was walking into an ambush, and I knew it,” Sweeney says. “I went into the lion’s den to have a discussion. We didn’t waiver, and people weren’t happy. But we did have an honest dialogue.”
It was the lion’s den because it was the home turf for Sen. Joe Cryan, a leading liberal who had just drafted a dream bill for the public workers, one that would cut their health-care costs by shifting more of the burden to taxpayers. For some public workers, health costs would drop by more than half under Cryan’s bill.
“It was a pretty passionate room,” Cryan says. “There are a lot of people making less in take home than they did in 2010.”
Brace yourself, folks. This is going to be painful, all around.
The last big fiscal reform, in 2011, was tough on public workers. Retirees have received no increases to account for inflation since then, meaning their real pay has dropped by 15 percent, so far. And Cryan is right that some teachers and social workers today take home less than they did in 2011, thanks to increased payments into their health and pension plans.
“People have lost up to 12 percent,” says Hetty Rosenstein of the Communication Workers of America. “It’s a pretty big deal.”
But how much more can taxpayers handle? Public workers still get much better retirement and health benefits than the average taxpayer, and even Sweeney’s plan won’t change that.
New Jersey ranks fifth highest in per capita state and local taxes combined, and we are destined to move up in the rankings without a new round of cuts.
Want proof? Cryan’s bill would explode the 2 percent cap on property tax increases by excluding health care costs from the calculation. It clears a path for big increases in that most dreaded of taxes.
So, if you thought last year’s budget fight was bitter, just wait. Democratic leaders agreed to raise taxes by $1.4 billion last year, but they are warning Murphy that they will not do that again — unless he first breaks off his romance with the public worker unions and supports pension and health cuts.
Warning for Murphy: They aren’t kidding. It’s an election year, they don’t want to lose seats, and they don’t like you much anyway.
“We’ve raised enough taxes,” Sweeney says. “Now it’s time to fix New Jersey. We have to change the way we spend.”
What worries me most is Murphy’s unwavering loyalty to public worker unions, especially the New Jersey Education Association.
Liberal Democrats like Murphy hear the word “union” and they picture coal miners fighting robber barons, or Cesar Chavez fighting for migrant workers toiling on corporate farms. It’s good guys fighting bad guys.
But the NJEA is a racket for its top brass. Its three senior officers earned an average of just under $500,000 each in 2017, according to the latest records available. Spending on the union’s bloated staff jumped 20 percent in the prior three years, setting a new record.
Almost all that money comes from squeezing teachers, who earn an average of $70,000 a year and pay just under $1,000 in union dues.
What would Cesar Chavez say if he went to an NJEA meeting and saw the leadership in their fine clothing, with their fine cars, enjoying a fine meal – courtesy of those classroom teachers?
I wanted to ask them, of course. But the NJEA hasn’t spoken to me since I wrote about Ed Richardson, the executive director, earning $1.2 million in 2015. That hit a nerve, it seems.
Murphy is also sticking with the union demand that changes to their benefits should be made only through collective bargaining, not with legislation. Supposedly, this is a matter of deep principle.
But if the unions really believe that, why do they support Cryan’s bill, which does its own end-run around collective bargaining? Perhaps this principle isn’t so sacred after all, as long as the unions are winning.
As for the coming clash over the budget, I see it resolving in one of two ways:
A grand bargain is possible. If Murphy agrees to cut pension and health benefits along the lines that Sweeney is proposing, then both Sweeney, D-Gloucester, and Assembly Speaker Craig Coughlin, D-Middlesex, have signaled that they might accept some tax hikes, likely focused on the wealthy.
Sweeney’s spending cuts are reasonable, given the fiscal crisis. On pensions, he promises to leave all benefits in place for public workers who are vested, which takes five years. New hires and those not yet vested would be switched into a 401k-style program, used in many other states under Democratic leadership, including Rhode Island and Pennsylvania. On health care, Sweeney says his plan would downgrade benefits from platinum level to gold level, as measured under Obamacare. What is so awful about that?
If the governor refuses to make cuts, which I fear is likely, then we’re in for a wild ride. It could lead to a shutdown. And it could even lead to an override vote, if Republicans joined centrist Democrats to block tax hikes.
So far, Murphy has given the unions all they want. If that doesn’t change soon, he’s going to lose this fight. And he’ll deserve to.
More: Tom Moran columns
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