1. Consolidate school districts
The headline proposal here is merging all elementary and middle school districts, such as K-6 and K-8 districts, into K-12 regional districts.
That would cut the total number of districts in New Jersey roughly in half, down from about 600 currently. The panel said its intention is to expand academic offerings in smaller districts and save on administrative costs, not shutter schools or cut teachers.
"The idea of regionalization is not to consolidate schools and close schools all across the state," said Lucille Davy, an attorney and former state commissioner of education. "It is just to have those districts come together."
The panel also recommended that the state pick up the full cost of providing students with special-education services. The state currently reimburses districts for a portion of those expenses, but covering the whole tab would cost the state about $200 million more.
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2. Give less generous benefits to public workers
Citing an unfunded pension and health benefits liability of $115 billion — four times larger than the state budget — the panel recommended shifting new state and local employees from the current pension system to a less generous plan that's yet to be determined but could resemble a 401(k) or hybrid model.
It also said state and local governments should reduce health benefits for employees and retirees from the current Platinum level, which pays 90 percent of health care costs on average, to Gold, which pays 80 percent, and force new retirees to pay the same toward their premiums in retirement that they do while they are working.
The panel also took aim at so-called "boat checks" — the large payouts some state and local employees receive upon retirement for unused sick and vacation time. Payouts would be capped at $7,500, the same cap included in a bill currently pending in the Legislature.
3. Shore up pensions with … the turnpike?
Yes, that's right, the panel recommended moving major state assets like the New Jersey Turnpike into the beleaguered pension system, just as the state did last year with the New Jersey Lottery.
But that's not all. The panel called for the state to evaluate all its assets — reservoirs, treatment plants, land, cell towers, intellectual property, other toll roads — to see what else could be transferred.
Those moves would reduce the state's unfunded pension liability, improving the system's overall financial health on paper, but potentially put drivers and anyone else who uses the affected assets on the hook for supporting the pension system.
4. Ease state and local taxes
As a response to recent federal tax changes that hit some New Jersey residents hard, the panel recommended a couple of tweaks to lessen their tax burden.
Under one proposal, small businesses would be allowed to pay state taxes equivalent to the income taxes of their owners and partners, allowing them to deduct state tax payments on their federal returns.
Under another proposal, the state would allow residents to deduct contributions to New Jersey-based charities from their state income taxes. Currently, those deductions are allowed only for federal tax purposes.
The panel also urged the state to review its sales tax exemptions to make them simpler and "more progressive." That could mean a sales tax newly expanded to cover professional services, for example, or exemptions applied to a broader range of products. The panel did not make specific suggestions.
5. More municipal sharing, fewer municipal courts
Promoting "shared services" has been a buzz-phrase for decades around Trenton, but the panel's report includes a fresh round of earnest recommendations to convince municipalities to team up.
Foremost among them is reviving a pair of defunct commissions to determine the most efficient scale at which various services — from 911 calls to code enforcement — can be delivered and propose legislation accordingly.
The panel also endorsed a recent report by a state Supreme Court committee that, among other ideas to remove the influence of money and politics from the millions of cases local judges handle every year, called for consolidating smaller municipal courts.
Email: pugliese@northjersey.com and nashj@northjersey.com