Which layer of government in N.J. needs to be cut? Depends where you live, experts say

By Tom Bergeron and Anjalee Khemlani
Jersey City | Aug 7, 2018 at 7:15 am

A way to curtail some of the high costs of government in New Jersey may not necessarily be shared services — it could be about eliminating layers of government.

And here’s the catch — according to recent panels of key legislators and mayors — which part of government needs to be eliminated can differ from town to town, county to county.

So said panels that included mayors Steve Fulop (Jersey City) and Frank Gilliam (Atlantic City) and legislators Tom Kean Jr. and Steve Oroho (Senate) and Andrew Zwicker (Assembly).

The elected officials were at the business school at New Jersey City University last week during an invitation-only event of key business leaders from companies listed in the NJCU New Jersey 50 Index, a fund based on the 50 top public companies headquartered in the state. (Click here for more on the index.)

Kean (R-Westfield), the Senate minority leader, said this could be viewed as a North-South issue.

“South of the Driscoll Bridge, they’re basically on a county-based system on a lot of different things,” he said. “And the counties grew up first, so, therefore, the towns have lesser responsibilities. But north of (Interstate) 195, you could argue they are a lot more like Massachusetts or Connecticut, which got rid of county government.

“We need regional governments in a lot of different ways. We need town governments in a lot of different ways. And we need to restructure how we look at things. But the answer could be different (in different places) if we’re really going to be innovative in the way we look at the delivery of goods.”

Fulop said county size is a greater determinant than geography.

“If you were to be bold and be aggressive and say, ‘Hey, I’m going to really get rid of a county government in some situations and municipal governments in other situations,’ you would actually see cost being driven down, because they’re overlapping services in the same exact geographic region,” he said.

“It’s not a one-size-fits-all. In a place like Hudson, where you have 12 municipalities, you would probably say that the county government is redundant in that situation. In a place like Bergen — and I’m not going to speak on behalf of Bergen — but I think that common sense would say that, where you have (70) municipalities and a lot of smaller municipalities, some of the municipal governments are redundant and you could eliminate.”

Everyone agreed simply “sharing services” is not as simple — or cost-effective — as it seems.

“It’s difficult when you’re going after funding,” Gilliam said. “It’s one thing when folks say, ‘You should collaborate.’ When you’re asking people to collaborate, you also asking people to share money. And when you’re asking people to share money, that always basically bring some level of tension.

“I do believe that there are things that counties and cities can work on in terms of shared services. But I do understand that this is an 800-pound gorilla in the room saying, ‘Who’s willing to share the money that everyone’s after?’”

Fulop said he learned firsthand that “shared services” can actually increase costs, pointing to an effort he made to consolidate garbage collection with Union City, which neighbors Jersey City.

“(We thought) we’ll have scale, we’ll be able to consolidate routes and we’ll be able to drive down costs,” he said. “In that situation, the bids actually increased because there were less vendors in the state of New Jersey that can actually handle that geographic region.

“We would have been better off in that situation to have actually divided up the city into smaller regions where smaller and more operators could bid on the contracts and actually drive our pricing down in that situation.”

Oroho (R-Sparta) said it doesn’t matter what layer of government is cut unless there is a true effort to cut costs.

“If you have an overhead rate that is too high, it obviously it starts affecting your pricing,” he said. “It starts affecting your profits. It starts affecting whether you have a profit or not.

“We have to bring down that total cost of government and one of the key things we have to deal with it: It’s easy in government to make promises. It’s hard to make payments. That’s been the problem over a long time: Republicans and Democrats. Both parties have 50 percent of responsibility.”

Oroho said businesses provide the answer.

“We have to come to grips with the fact that we need to have change with respect to our benefit plans, our pension plans. I’ve always said: ‘Government is 25 years behind business.’ You paved the road for us. All we have to do is follow the plan.”

Read more of ROI-NJ’s coverage of the event:

ROI-NJ Staff | editorial@roi-nj.com | @ROINJNews