Center Square NJ: Plan to furlough New Jersey state employees might rely on federal funding

By Sarah Downey

(The Center Square) – As the economic impact of COVID-19 continues to chip away at state finances, New Jersey lawmakers are considering furloughing public employees to help offset the costs of salaries and pensions.

Under the proposed Employee Job-Sharing Furlough Protection Act, employees working fewer hours would be receiving higher pay, Regina M. Egea, president of the Garden State Initiative (GSI), said in an email response to The Center Square.

“New Jersey math is to save $750 million by increasing the cost of public employees by 26%,” Egea said. “A public employee whose salary is $50,000 would normally receive $12,500 for a three-month period. Under Senator [Stephen] Sweeney’s plan, the worker would receive a 26% salary increase to $15,800.”

Egea said that increase would include $5,000 in salary during the furloughed period, funded by NJ taxpayers, while accruing pension and health benefits; $3,000 in state unemployment funds reimbursed by federal stimulus dollars; and $7,800 in supplemental federal unemployment benefits.

In addition to Senate President Sweeney, D-Gloucester, the measure would be co-sponsored by Sens. Nellie Pou, D-Passaic, and Steve Oroho, R-Sussex.

“This proposal assumes 25% of New Jersey’s 400,000 state and local employees are furloughed for the next three months,” Egea noted. “The legislative sponsors estimate a $750 million cost reduction over that three-month period ($150 million benefit at state level; $600 million spread over the state’s 560 municipalities, 650+ school districts and 21 counties).”

The plan would likely be discontinued when the federal stimulus expires in July.

While the plan’s backers told northjersey.com that it would be a boost to the economy, there is disagreement on their estimates.

“The benefit for workers comes from Senator Sweeney’s estimate that workers who make $76,500 or less, will take home more pay from not working compared to working their normal schedules. From an economic perspective, this is only stalling the difficult decisions right in front of us,” Egea said.

“New Jersey’s state and local leaders are obligated to deal with the known revenue declines given our uncertain recovery trajectory. Of this we all agree: an immediate recovery is not going to occur. Laying out now a ’most likely’ view for state and local revenue declines will drive the appropriate conversation of what is truly ‘essential’ going forward,” Egea said. “Health services, public safety, feeding our most vulnerable and getting our schools back open all certainly top that list.”

The measure has not yet been introduced in the state legislature.

“Policies that drive both the size and cost of our public workforce must now match our ‘new normal,’“ Egea said. “Last year, as one example, GSI identified a significant opportunity to reduce costs this year. New Jersey’s public employee benefits cost 50% more than the average of public workers in the U.S. Bringing our public employee health benefit and pension plans in line with U.S. averages would bring tangible and lasting savings to New Jersey taxpayers.”