Gov. Phil Murphy is expected to call for more spending and taxation as part of his proposed FY2021 budget address this Tuesday.
But in a new interview with Comcast Newsmakers, NJBIA President and CEO Michele Siekerka said that New Jersey’s fiscal challenges will not be solved with more spending, but with comprehensive reforms.
“We’ve already priced ourselves out of the state of New Jersey,” Siekerka told Comcast Newsmakers host Jill Horner. “The answer is not more spending or raising revenue. The answer is reform.”
Specifically, Siekerka spoke of New Jersey’s long-term debt, which has ballooned by 382% over a 10-year period. As the interest on state debt continues to grow, the pressure expands on each state budget to consider tax increases to address priorities such as education, transportation and infrastructure.
And this year seems to be no exception, with Murphy already acknowledging his call for the expansion of the millionaires tax for a third consecutive year.
But what’s driving “our long-term indebtedness,” Siekerka said, is spending on public worker pension and health benefits that divert revenues away from essential state services that then in turn need to be funded through borrowing. That’s why public pensions and benefits need comprehensive reform.
“That’s not to say we should not take care of our public workers and give them what we promised them,” Siekerka explained. “But we’re saying we need to change how we have programs for them for the future, because those programs are not sustainable when you have long-term debt obligation increasing 382%.
“That’s the public worker pension. If I were a pensioner, I’d be concerned of whether that money will be there for in the future.”
Watch the complete interview here.