Sweeney will again try scaling back worker costs

When State Sen. Stephen Sweeney proposed cutting benefits and pay for public workers five years ago, saying they needed to align with those of the private sector, labor leaders hauled out a supersize inflatable rat and ran ads against him.

The governor at the time, Democrat Jon S. Corzine, sided with the unions, and the Gloucester County Democrat's proposal made as much progress as eastbound traffic on the Atlantic City Expressway on a summer Saturday.

But that was before a recession. Before declining revenue led mayors to decimate police forces and public-works departments. Before a conservative GOP governor, Chris Christie, came to Trenton and pounded away at skyrocketing public benefits.

Sweeney is now prepared to push through a far more controversial proposal concerning what workers pay toward their pension and health costs. It's led union leaders to declare war, Democrats to fight one another, and workers to seek answers.

What is certain is that New Jersey history will be made at an 11 a.m. Senate session on Monday, when hundreds of union workers are expected to jam Trenton to witness what they view as the ultimate betrayal.

The bill will likely eke out enough votes with Senate Republicans joining a minority of Democrats, many from South Jersey. The measure, to go before the Assembly Budget Committee on Monday, is expected to gain final approval in the full Assembly on Thursday.

Dire problems led the state to this point.

New Jersey has about $120 billion in unfunded pension and retiree health-benefit obligations. The state for years skipped billions of dollars in pension contributions. Health-care costs in the state budget have more than doubled in the last decade.

So even Sweeney's critics agree something must be done, but they say the deal struck among the Senate president, Christie, and Assembly Speaker Sheila Oliver goes about it the wrong way.

One of the bill's more controversial provisions would make it harder for South Jersey public employees to receive health care in Philadelphia because out-of-state providers would be considered out of network.

That change would not apply to emergency or primary care, and those who already live out of state would not be affected. Employees could go out of state for in-network specialized care when there is no provider reasonably available to them in New Jersey, according to Sweeney, and individual exceptions would be made in unusual circumstances.

The bill also would establish health-plan committees, consisting of employee and employer representatives. They must offer a plan that includes out-of-state coverage, though at a higher cost.

Several health-care experts questioned the decision.

"The consequence of a protectionist strategy is it limits competition and therefore raises prices," said David Knowlton, president and chief executive officer of the New Jersey Health Care Quality Institute.

Unions and other critics have said the measure was inserted to benefit South Jersey power broker George Norcross, who is chairman of Cooper University Hospital in Camden.

Sweeney has disputed that, saying in a statement: "Our state is home to nationally recognized hospitals . . . and we should be doing everything we can to support them."

Knowlton said Cooper provides high-quality care and doesn't need protection from competitors across the river.

Still, freezing out Philadelphia hospitals would hurt the state when negotiating on costs, he said, and it's forseeable that it would lead to higher prices eventually.

The bill has already led executives at Children's Hospital of Philadelphia to sound alarms in an e-mail to employees last week, urging them to speak out against the measure to New Jersey leaders.

Sweeney was also grilled on the matter of keeping health costs down during a Senate hearing on Thursday.

"The discussion of who pays what share of the costs needs to happen alongside how to keep costs in check. . . . We are shirking responsibility to determine the main cost-drivers," Senate Majority Leader Barbara Buono (D., Middlesex) told him.

But the main objection by a majority of Democrats, especially the more liberal North Jersey members, is that they, like the unions, believe health care should be collectively bargained.

Assemblywoman Bonnie Watson Coleman (D., Mercer), who maintains that Democrats must support the working class, has called the vote a defining moment.

"Who are we standing for?" she asked.

The health portion of the bill would trim $10 million from the state budget in its first year and save local governments $5 million.

The law would be phased out after four years, but Sweeney says that if similar provisions continue, savings would reach $3 billion after 10 years.

Senate Majority Office spokesman Derek Roseman said that was proof of a fair compromise that doesn't wallop workers all at once. Yet unions and some Democrats questioned the rush to pass a bill before state contract negotiations play out - unions had offered concessions - if immediate savings are small.

Increased employee contributions would be phased in over four years, with those earning more than $110,000 on a family plan paying 35 percent of their health premiums. Lower-paid workers would pay a smaller percentage; for example, those earning $65,000 would pay 19 percent. The current contribution is about 8 percent.

Bob Master of the Communication Workers of America was not appeased by the sunset provision. The measure would undercut unions in 2015, he said, because they would have given up ground.

Master said Friday that unions would canvass South Jersey over the weekend to urge voters to contact their legislators. Mailers and radio ads are in the works.

"I don't think there's anything the [Democrats] can do that would heal the rift," he said.

Labor has nowhere to go but the Democratic Party, and labor sources said they were trying to figure out what do to politically.

Sweeney never stops reminding people that he is a union ironworker who helped pass paid family leave and raised the minimum wage.

Though the unions are angry that the Legislature is trying to dictate their benefits, Sweeney is annoyed that they would try to steer lawmakers.

"That's what's got us in this trouble," he said.

Assemblyman Louis Greenwald (D., Camden), who is sponsoring the bill in the lower House, said he had tried to balance the burden of those who pay property taxes with the interests of workers.

"If you don't want to help fix problems, then you shouldn't want to get elected," he said. "My colleagues in South Jersey subscribe to that notion."

The bill also has the vote of Sen. Donald Norcross (D., Camden), president of the Southern New Jersey AFL-CIO Central Labor Council.

He cited mass police and fire layoffs in Camden after the city failed to get union concessions.

"When does collective bargaining trump public safety?" Norcross asked.

Sweeney was drowned out when he brought attention to problems with public benefits five years ago. But those problems, Norcross said, "have not gone away."