This blog is part of a ten-part series capturing Kacy O’Brien’s experiences as part of the 2015 Lead NJ Class, which follows the monthly two-day seminars the class participates in over the course of one year. For the next ten weeks O’Brien will post a blog on Creative New Jersey’s website every Monday through her graduation in early December 2015. You can read it here and in occasional posts on the Dodge Blog.
I’ll be honest: Though I consider myself to be a curious, intelligent, well-informed person, there are some things in life I think that I’ll never really need to fully understand – some things that I can rely on other people to handle. How New Jersey’s state budgeting system works (or doesn’t work, depending on who you ask) was definitely on my list of those things, in the fleeting and rare moments when it was on my radar at all. I thought this to be an undeniable truth.
Until my first Lead NJ seminar.
Our 2015 Lead NJ Seminar series kicked off in February with a timely focus on our state budget, held in the capital city of Trenton at Thomas Edison State College. Governor Christie’s budget plan was due to be released the following week, and we hadn’t yet heard the results of the Supreme Court’s ruling on whether or not the State had broken their contract with the unions by underfunding the State’s pension plan (an expense-cutting tactic practiced for years by previous Governors, as well, resulting in the current pension crisis). But at this stage, I was still blissfully ignorant of the impacts of those announcements.
Enter Dr. Henry A. Coleman. If I lived closer to New Brunswick I would do everything in my power to audit one of Dr. Coleman’s economics classes at Rutgers’ Bloustein School of Planning and Public Policy. Dr. Coleman, whose accolades are so impressive I recommend that you just read his bio, prepared a special report for our class titled, “New Jersey State Government Finance: Issues and Outlook,” which provided historical background of our states finances, the processes and trends which have influenced budget decisions, and current issues and concerns about the current state of New Jersey’s finances. Dr. Coleman’s expert report also included some options for changes to policy that might start to address some of the concerns outlined.
Dr. Coleman’s explanation of the complexities of our state’s budgeting process, tax codes, and economic policies was so intelligently crafted that I, a complete novice about these issues, walked away with an understanding of some of the deeply scary – but solvable – issues that our state is going to face in the immediate future.
Chief among the issues Dr. Coleman highlighted were:
- New Jersey’s cyclical (think the economic downturn) and structural (think too little revenue and/or too much spending) budget shortfall;
- the state’s decaying infrastructure and the diversion of funds intended for Transportation Trust Fund which will run out of money in 2016; and
- the underfunded state pension system.
Thanks to Dr. Coleman and the questions and comments of my classmates, I understand that there are no easy answers and we will all have to compromise if we want our state to succeed.
But what, as a leader, should I do about it? Lead NJ’s program requires that you do as much as you learn: an appreciation of the issues wasn’t enough. So began our 52-person cohort’s attempt at making recommendations for spending cuts and revenue generation to an expert panel that included Dr. Coleman, the President of New Jersey Policy Perspective Gordon A. MacInnes, and New Jersey State Investment Council member and Byrne Asset Management founder Thomas Byrne.
Utilizing the report prepared by Dr. Coleman, expertise from within our group, and additional input from our panelists, we debated on what recommendations could have immediate impact versus longer term, but ultimately worthwhile, impact. Our recommendations included, among several others, the following:
- NJ should buy into the extended Medicaid program through the Affordable Care Act to cover those not currently covered. The federal government covers 100% of costs for the first three years, then 90% of costs thereafter. The current costs of emergency healthcare provided to those without coverage would still be more expensive than the 10% NJ would have to pay after three years.
- Institute a gas tax to help fund the Transportation Trust Fund (we have billions of dollars of infrastructure repair needed and estimates of 7-20 years before one of the tunnels to New York has to be shut down for repairs).
- Form a commission similar to the Defense Base Closure and Realignment Commission (BRAC) to examine current state programs older than 20-25 years to evaluate if they are continuing to fulfill their original purpose or if they should be recommended for elimination.
- Institute an “Amazon Law” that allows NJ to collect sales tax on internet purchases with legal support for the collection of those taxes.
By debating priorities with my classmates, I came away from this seminar having a greater appreciation for the challenging position our state legislators are in when it comes to budgeting, and how compromise on many levels will be the only way for our state to move forward into a sustainable future.
My challenge as a leader, and perhaps this goes for us all, is to look at my assumptions about what I think is important to understand – to test those assumptions, to dive into complex issues and to do the work necessary to understand the impacts of decisions being made on those issues – before I make a value judgment about how my time and attention should be spent: a whole other kind of “spending” cut that could lose me the profits from increased comprehension of complex issues affecting our state.
(Wordle Image: www.NJSpotlight.com; Table from NJPP’s Pension Report: “How to Dig an Even Bigger Pension Hole” 10.7.14)
Kacy O’Brien is the Program Manager at Creative New Jersey, a statewide initiative dedicated to fostering creativity, innovation, and sustainability by empowering cross-sector partnerships in commerce, education, philanthropy, government, and culture, in order to ensure dynamic communities and a thriving economy.
This blog is part of a ten-part series capturing Kacy’s experiences as part of the 2015 Lead NJ Class, which follows the monthly two-day seminars her class participates in over the course of one year. Topics range from policy to the economy, to education, arts and culture, energy, criminal justice and healthcare, with a focus on New Jersey’s current state and its future. The views and opinions expressed in this blog are those of the author and do not necessarily represent those of Lead NJ, The Geraldine R. Dodge Foundation, Creative New Jersey, their staffs, and/or any/all contributors to this site. For corrections or questions, please email Kacy at: email@example.com.
Kacy gratefully acknowledges Lead NJ and The Geraldine R. Dodge Foundation for their support of her participation in the 2015 Lead NJ program.