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Testimony of Matthew U. Watkins, Township Manager
Township of South Brunswick, Middlesex County
Before the Senate State Government, Wagering, Tourism and Historic Preservation Committee
February 18, 2010

Re: Pension Reform – S-2, S-3, S-4 and SCR-1


Mr. Chairman, members of the committee:
Thank you for allowing me to testify today.  My name is Matthew Watkins and I am the Township Manager for the Township of South Brunswick.  I have been a local government administrator for nearly 30 year and served our State as the Director of Local Government Services. 

I applaud the Senate and Assembly for taking the bold steps to address our pension systems.  This legislation is critical to fixing the unsupportable public pension costs in New Jersey. 

I am hoping to provide you with an additional perspective from those of us in the trenches who are attempting to hold down property taxes.  Mr. Dressel commented on the need for these changes to be immediate and legislative.  Without those conditions, the proposed changes do little to address today’s pending significant property tax increases. 

Specifically, if we are forced to wait for the end of collective bargaining agreements, and then negotiate the changes that you mandate, we will be forced into provide an offset for the savings that these bills might bring us. 

To illustrate my point, when the State Health Benefits Prescription plan was changed by the State to increase the Co-pay on prescriptions, I was forced, by contract, to keep the bargaining units whole; thereby diminishing the savings from your changes.  Had this change been legislated, savings would have been immediate.  I suggest that adoption of our recommendations on S2, 3 and 4 could avert this issue and more importantly provide immediate savings for struggling local governments. 

Please remember that many of the benefits given by the pension system were never negotiated; they were given without consideration to collective bargaining agreements.  Therefore, changing them through collective bargaining agreements should not be required either.

In South Brunswick, the increasing cost for pension payments has made up over 60% of the increases in local taxes over the past 6 years.  While Mayor Gambatese and the Council has worked to cut costs through reductions in staff and programs, while increasing shared services, the large increasing costs of the pension system has mostly been the reason property tax increase in my town.  This year, it, along with increases in the State Health Benefits, will be the cause of tax increases. 

Without your help to curb the costs of these two State controlled benefits, there will be no end to local property tax increases for my community.  If something is not done in this year, I will be forced to reduce staff mostly through layoffs of nearly 40 New Jersey residents.   As a result, taxpayers will see an increase in property taxes while seeing reduction in services. 

I encourage you to not only favorably consider these bills, but to give immediate attention to the sky rocking costs in this year as well as address the future costs as these bills clearly will do.

I respectfully urge you to consider the bills before you, with the changes that are recommended.

On behalf of my Mayor and Council, I thank you for the opportunity to address our issues and hope that you will take immediate action to save tax dollars and jobs by fixing the pension system.  I beg you not to overlook the immediate needs of our taxpayers for relief in 2010.

Thank you and God Bless you for your service to our State.


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