Seniors could be affected by Trenton’s budget crisis | Moran

Gov. Phil Murphy last week ordered a hiring and pay freeze and asked department heads to prepare for difficult times next year by cutting their budgets by 5 percent.

He can’t say he wasn’t warned. The last alarm came two years ago, when a bipartisan think tank full of experts who have managed previous budgets told him he was heading for a wall. He shrugged and kept his foot on the accelerator.

“This is exactly where we said we would be,” says former Senate President Steve Sweeney, a centrist Democrat who co-founded the think tank at Rowan University and is now running for governor. “It’s not partisan. It’s all about the numbers.”

The numbers are indeed ugly. The state is spending about $2 billion more this year than it takes in. And Murphy’s own Treasury says that without a course correction, things will be about twice as bad next year. In other words, the governor now seems to agree that it’s time to pump the brakes. His final budget will be his most painful.

Where will the victims appear?

I suspect the program most at risk is Speaker Craig Coughlin’s pet project, Stay NJ, an expensive plan to give gigantic loans to seniors that, when combined with other property tax relief, could reach as much as $6,500 a year. It’s a regressive design that allows wealthy seniors earning up to $500,000 a year to break even. It is expensive, costing about $1.3 billion per year once it becomes operational in 2026. And because it doesn’t exist yet, its abolition should not have such high political costs.

But don’t you dare say that to Coughlin. This is what the man is committed to. And he is a respected player, not only because he knows his stuff, but also because he wields enormous power as a spokesman. He can kill any bill he wants by himself. Lawmakers are fully aware that they cannot do squats without his support.

“If the goal of property tax relief for seniors is important, we can achieve it,” Coughlin said. “Just like fully funding schools or paying pensions, if it’s a priority, we’ll find a way to work together to get it done.”

This is undoubtedly music for seniors. And Democrats worried about losing their seats will likely be on board, too. Because Stay NJ may be a reckless policy, but it is great policy. An election year is coming and seniors are voting.

In the 2020 presidential election, 72 percent of seniors voted, compared to 48 percent of voters under 25. When you look at income, the gap is similar, with wealthier voters far more likely to vote. So by targeting relief for seniors and including wealthy seniors, Coughlin is hitting the right spot – almost as if that was his intention.

“It’s a group you want to keep happy as a Democrat,” Monmouth University pollster Patrick Murray told me last year.

Maybe Coughlin can do it. His team points out that with a budget of $57 billion, raising $1.3 billion is a manageable task. Perhaps. But that’s on top of the expected nearly $4 billion deficit the Treasury expects next year.

Republicans say they can pass the cuts without much effort, and as usual they have their eyes on school aid that goes to poor districts. Their arguments are bolstered by rampant waste in Newark, where Superintendent Roger Leon has been responsible for a plunge in test scores and an explosion in spending on travel to warmer climates.

“We don’t need to cut state aid to counties like Newark, we just need to reverse the curve on the big increases,” said Sen. Declan O’Scanlon, a GOP budget specialist. “This government will go down in history as a steward of missed opportunities.”

That seems too rough to me. Republicans point to the increase in overall spending during Murphy’s term. Chris Christie’s final budget was $35 billion, and seven years later the total is $57 billion, an increase of $22 billion. But that’s not nearly as bad as it seems.

For one thing, Christie’s budget was artificially low because he cut pension payments and left tiny surpluses, which is why Wall Street repeatedly downgraded New Jersey’s credit rating under his watch. And most of the increase under Murphy went toward restoring the health of the pension fund, increasing the surplus and fully funding schools.

These are all expenses, yes, but they are not reckless. Most of Murphy’s spending increases were aimed at strengthening the state’s long-term financial health, just as a family spends money to reduce credit card debt and invest in college savings accounts. That’s why Wall Street has raised the government’s credit rating each time in the last four years under Murphy’s watch.

According to the Treasury Department, he has actually reduced the number of public servants.

Yes, the man is lucky. He was in the chair when the tidal wave of pandemic money arrived. He has shown no interest in reducing the cost of running government, as Christie did. And while credit scores have improved, this is true for states across the country thanks to pandemic relief and subsequent buoyant growth. New Jersey still has the second-worst bond rating in the country, behind Illinois.

So here we are again, with another ugly structural deficit. The test for Democrats now is whether they will accept shenanigans to get through the next year or two, or whether they will face the crisis honestly and make painful decisions like adults. In this regard, neither party has inspired much confidence in recent decades.

More: Columns by Tom Moran

Tom Moran can be reached at [email protected] or (973) 986-6951. Follow him on Twitter @tomamoran. Find NJ.com Opinion on Facebook.

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