Pensions make smaller government inevitable
Big things are happening in Trenton. Governor Jon Corzine has brought a business approach to government and politicians seem willing to listen.
But rather than sit back and wait for state/county reforms to trickle down to our level, municipalities like Summit need to catch the spirit and downsize themselves, because the cost of our present workforce is more than we can afford - under any condition.
Altogether, 820 full or part time employees are on the public payroll in Summit (counting city, schools, Housing Authority and Parking Utility). We haven't paid their full freight since 1996, when New Jersey declared a pension-funding holiday because of booming stock market investment returns.
Because of their past liability, Summit had to double its contribution in 2006. And we know it's going to increase another 75% next year, plus 60% the following year before we've caught up actuarially - even if our workforce remains static and benefit payouts don't increase!
In other words, hidden costs -- spring-loaded by past obligations -- make it impossible to remain staffed as present. The size of local government must be reduced either by automating workflow, consolidating back-office functions or outsourcing an entire department to the private sector. Shifting from full- to part-time workers who are entitled less benefits can also help.
Unless we change course, the property tax of Summit's average household will reach $13,400 next year, up another 7% (twice the rate of inflation) --$2,100, or 16% of his bill will go toward employee benefits (health insurance, workers comp, social security, pensions), not counting salaries!
Tough tradeoffs must be made. Fortunately, the good news is there are plenty of variables to play with at our local discretion.
The shutdown earlier this year of state government was instructive. Governor Corzine reminded us how energizing it is to overcome your bias against change. We underestimate people's ability to adapt. Creating a two-tier benefits package, one for existing and a different one for new hires, seems doable today.
Another lesson is the virtue of candor. The difference between "Essential" and "Non-essential" service was openly acknowledged. If we aren't more honest about discretionary activities like parking, taxes will continue to compound faster than inflation, and Summit will lose its middle class.
A final lesson is the value of bipartisanship. Regardless of party affiliation, everyone agrees now that the system in Trenton is broken. Mayor Jordan Glatt's leadership here in Summit can make big changes in public policy more acceptable to our citizens, by signaling a broad concensus.
All that remains is to change mindsets of Common Council, and re-engineer municipal government in a way that suits Summit pocketbooks. Our present delivery is unaffordable.
Tom's Current Agenda
Smaller
Government
Recycling
Public Art
No Freight Trains
Downtown
Economy
Municipal Budget
Taxes
Traffic