You’ll want to sit down for this. If you have a few adult beverages around, grab one of those, too. A recent report indicates things are about to get ugly in the Garden State.
A Crossroads NJ report produced by The Fund for New Jersey takes a look at the state’s looming fiscal meltdown and makes recommendations nobody is going to want to hear, let alone enact.
The biggest financial hurdle, to nobody’s surprise, is a monumental gap between what the state sets aside for retired government employee pensions and what it eventually will have to pay. The report says the state’s unfunded pension obligations in 2016 were somewhere between $66.2 billion and $135.7 billion. Ouch.
The report doesn’t just point out the problem, it offers ideas to remedy it. Here are a few of the “highlights”:
Cut health-care costs for retired public workers; adjust the gross income tax to increase yearly revenue by 10 percent; reverse plans to phase out the inheritance tax; increase the state sales tax to 8 percent; tax more service industries; legalize and regulate marijuana; require Internet sellers to collect sales tax; and examine “backdoor spending,” such as incentives for businesses moving or staying here.
If all these things somehow come to pass, we’re going to need that legalized marijuana.
But, if the state continues to kick the can down the road, the pain ahead will be even worse. Eventually, the bills will come due. Think your local school board complains loudly about a lack of state funding now? Just wait. As the report notes, everything from education to the environment to transportation could be affected.
The report asks the next governor and Legislature to take “strong, deliberate action.” That’s sound advice, but is there a candidate out there willing to take on this issue and make the difficult decisions? Anyone? Anyone? Bueller?
