Want more efficiency in N.J. government? Merge school districts, share municipal services, group says

TRENTON — New Jersey lawmakers say they will introduce legislation that would merge some school districts, encourage municipalities to share services, and change the state's pension and benefit structure in a bid to stave off billions of dollars in deficits and make governing more efficient in the Garden State.

"New Jersey is at a crossroads," Senate President Stephen Sweeney said. "In fact, we're beyond a crossroads. We're in trouble."

He spoke after the release of a report by a group of legislators, university professors, and fiscal policy and tax specialists. It recommended, among other things, that the state allow county governments to provide local police services to municipalities; require municipal officials, school board members, and local police to meet at least twice a year to discuss shared services; require the merger of municipal courts that have small caseloads; and downgrade some health and retirement benefits for public employees.

The Economic and Fiscal Policy Workgroup was organized by Sweeney, a Gloucester County Democrat, and worked for the last seven months to find ways to make all levels of government more efficient and cost-effective, and to make New Jersey a more affordable place to live and do business. The group was formed partly in response to the 2017 tax law that capped federal income tax deductions for state and local taxes. New Jersey has the highest average property taxes in the nation.

Sweeney acknowledged that some of the recommendations won't materialize. But without reforms, the group says, the state will have to find either savings or revenues of $9.5 billion over the next six years in order to balance the budget.

Sweeney said the state will hire an actuary to help lawmakers determine exactly how much money would be saved by the recommendations.

The group has not yet given Gov. Murphy its final report, but it gave him a list of possible recommendations during its discussions, Sweeney said.

Many of the ideas are not new, but members of the panel blamed a lack of political and legislative will for inaction on the proposals.

State Sen. Paul Sarlo (D., Bergen), who chairs the Budget and Appropriations Committee, said some of the proposals would be difficult to accept or accomplish, but others "are practically common sense."

The group proposed merging all K-4, K-5, K-6, K-8, and K-9 school districts — about half the state's roughly 600 districts — into regional K-12 districts, which they said would improve education and cut administrative costs. Currently, some children learn from different curricula and come to the same high school at different levels.

The mergers would not require closing individual schools, according to Ray Caprio, director of the Bloustein Local Government Research Center at Rutgers University; and Lucille Davy, the state's former education commissioner.

The group also recommended that the state allow two counties to try to establish countywide school districts as pilot programs. Districts with fewer students cost taxpayers more per pupil than larger school districts, according to the report's findings.

The report also recommended merging teachers' health-benefits plans with the state's larger health-benefits plan, downgrading state and local government employees'  health coverage from "platinum" to "gold" plans, and requiring new government retirees to continue to pay the same percentage for their health plan premiums as they did when they were working. The state's pension and retiree health benefit liabilities total $151.1 billion.

The teachers' union immediately assailed the recommendations. In a statement, the New Jersey Education Association said the report "consists largely of rehashed and rejected proposals that target middle-class public employees for deep cuts while glossing over the state's responsibility to live up to its long-neglected obligations."

The group said it plans to work with the governor to address rising health-care costs and funding pensions.