Dear Editor:
New Jersey can’t pay its debts. Our credit rating has been downgraded multiple times. We can’t finance good retirements or new projects and programs, and our high interest rates means we’re paying a ton to the banks.
Recently, the New Jersey Supreme Court ruled it could not force the Christie administration to fully fund the pension system, pursuant to a 2011 law jointly passed with the Democratic-controlled legislature.
Since the ruling, some Republicans have sought to capitalize on this as a way to appear “tough” on unions. Some Democrats have seized on the ruling to claim that Republicans do not care about retirees and public workers, and playing other legislative games. The retirements of thousands and thousands of hard working New Jerseyans lay in the balance.
We have not heard enough folks focusing on what we need to do now to come together and make sure we have a secure and well-funded pension system. We, formerly as Republican and Democratic opponents for the same office, NJ Assembly LD 31, have written this letter to set an example of how people from different parties must come together.
Fully funding the pension system costs over $3 billion each year. Recently, the State has been paying about half that.
We propose a substantial, incremental and bipartisan solution on the order of $500 million. Our hope is the legislature will follow our example, debate the following proposal, and build on it to finally solve this problem. If we do not solve it, this will be the source of the next financial crisis. Former Fed Chair Paul Volcker has warned state debt is the next credit bubble. This is the 800lb gorilla in the room we do not want to starve.
So, we must each give a bit. Yes, Republicans may even have to agree to some modest and temporary tax increases. Everyone agrees taxes are too high, yet we need a bipartisan solution. If Republicans offer that, say in the form of a modest increase in the upper-level income tax and payroll tax, Democrats would have to agree to something, too. That could take the form of an employee-side component to the payroll tax increase, an agreement to introduce merit-based pension ACR unit accumulation on a go-forward basis, and a partial, phased-in transition of some of the tail liabilities under these plans to the Unions. Funds would be earmarked solely for the pensions.
Yes, we are each agreeing above to things that we wouldn’t normally support. We must come together like this and solve our hardest problems. We will continue to bring this proposal to our collective networks to make baby steps that will turn into full strides, and New Jersey will once again be running at top speed in no time.
Matthew Kopko and Joe Conte
Current Republican Nominee for NJ Assembly 31 LD, and Runner-Up Democratic Candidate for NJ Assembly 31 LD