June 20, 2011
League Supports Progress on Pension and Health Reform
A panel of Mayors testified before the Assembly Budget Committee in support of A-4133, which provides vital reforms to the State Health and Benefits systems. League Executive Director Bill Dressel was joined by Orange Mayor Eldridge Hawkins, Perth Amboy Mayor Wilda Diaz, Linden Mayor Richard Gerbounka, Hope Mayor and Past League President Timothy McDonough and Collingswood Mayor James Mayor in support of A-4133.
Also today, the full Senate approved S-2937, sponsored by Senate President Stephen Sweeney and Senator Joseph Pennacchio. The bills now await a vote by the full Assembly on Thursday.
The actions today by the full Senate and the Assembly Budget Committee in advancing these reforms are key steps to assure for the sustainability of these systems and a key tool for local governments. Local governments and our taxpayers need relief. Approximately 70% of local government costs are tied up in personnel and personnel related expenses. With arbitration reform having been enacted, these are the prime remaining drivers of these costs are pension and health insurance costs. S-2937 and A-4133 are much needed reform.
The League of Municipalities has long advocated for pension and health benefit reforms. While pension and health benefit costs are one of the main cost drivers for municipal budgets, they are generally outside the municipality’s control. These costs serve to drive up local costs which in turn force cuts elsewhere in the budget, often to valued and vital public services.
Since the passage of the 2% hard cap last July, nearly every municipality in the State has undergone a budget process without the overwhelming majority of the management reforms tools that were promised. Many have been forced to severely reduce vital services, including public personnel reductions, and make other difficult and often draconian budget choices. Pension and Health Care reforms are very difficult issues to tackle in a manner that ensures the financial solvency of the pension systems so they will exist in the future without over burdening municipalities and tax payers. The League applauds the bipartisan efforts of those who can craft such legislation which would accomplish this while protecting our current retirees and grandfathering those eligible for retirement by not breaking our commitment to them.
The League commends Speaker Sheila Oliver, Senate President Sweeney and Governor Chris Christie for their leadership championing these bipartisan reforms while achieving an important balance for all the major stakeholders. The League also commends and thanks the others sponsors of S-2937 and A-4133, including Assemblymen Louis Greenwald and Declan O’Scanlon and Senator Joseph Pennacchio.
For more information, please contact Bill Dressel, Jr., Executive Director at 609-695-3481 x122 or 609-915-9072.
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