Gov. Phil Murphy makes an almost daily plea for direct state aid — otherwise known as a large cash payment from the federal government. The state also will need to take advantage of bonds that could net up to $9 billion, he said.
The resulting debt — and almost certain credit downgrade that comes with it — isn’t enough to deter Murphy, who said the state can’t survive without either. He’s right. It’s a financial fact that no one can argue with. And the slashing of services and a multitude of layoffs may come regardless of the path forward.
But the economic devastation that has come from COVID-19 does not have to be dealt with the same philosophies that have helped put the state in the perilous financial position it is now.
At least, that’s the view of Regina Egea, the head of Garden State Initiative and a former chief of staff to Gov. Chris Christie.
Egea said business as usual — and, more so, government as usual — should not go on. This is the opportunity to fix some of the inherent flaws the state has, she said.
“This is a moment for New Jersey,” she said. “Especially given the environment we’re in now, where our work lives are so disrupted. It’s an opportunity to think about: How do you create value at different levels of government?”
Egea said it’s all about the bottom line.
“We have to restructure the cost of government in New Jersey,” she said.
Egea is not looking to cut services. In fact, she wants to increase funding for health care. She said she just wants government to do things more efficiently. And to make the hard choices the private sector already is making.
“We ought to be doing very practical things that you’re watching universities and private industry doing, which is freezing pay increases, freezing hiring, figuring out what’s essential versus non-essential spending, and starting to conserve resources,” she said.
The best way to do this, she said, is to look beyond our borders.
She points to Massachusetts for examples on education spending. Most people know Massachusetts and New Jersey are in an annual competition to have the best education system in the country. Few realize Massachusetts gets its results while spending far less.
Egea points to Virginia for its statewide road fixing system that she says is more efficient. And the private-public-partnership model Pennsylvania is using to fix its bridges — faster and at less cost, she said.
“We can spend less and do better,” she said.
She knows her words likely will fade away. It’s hard to argue for fiscal responsibility at a time when expenses are their highest and revenues at their lowest. Any adjustment may just be a rounding error on a ledger that is bound to be covered in red ink for the foreseeable future.
But, if not now, when, she would ask. Borrowing just to maintain a system that isn’t working doesn’t make sense, she said.
“I think we are default deferring and avoiding the problem rather than dealing with it,” she said.