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♪
>>> THE RESTRUCTURING OF THE
LEGISLATURE HAS PUT NEW CHAIRS
AT THE HEAD OF SEVERAL KEY
COMMITTEES, NONE MORE IMPORTANT
THAN EDUCATION.
HI, EVERYBODY, WELCOME TO
"REPORTERS ROUNDTABLE," I'M
DAVID CRUZ, ALONG WITH A FINE
BAND OF STATE HOUSE JOURNALISTS,
INCLUDING STACIE SHERMAN, DEPUTY
MANAGING EDITOR FOR U.S. BUREAUS
FOR BLOOMBERG, KATHERINE
LANDREGEN, POLITICO, AND THE
BUDGET AND FINANCE WRITER FOR NJ
SPOTLIGHT NEWS.
THEY'LL BE JOINING ME IN A BIT
BUT WE START TODAY WITH THE NEW
CHAIRMAN OF THE SENATE EDUCATION
COMMITTEE, VIN GOPAL OF MONMOUTH
COUNTY.
SENATOR, WELCOME TO "REPORTERS
ROUNDTABLE."
GOOD TO SEE YOU, MAN.
>> GOOD TO SEE YOU, DAVID.
>> SO, THIS IS REALLY BEEN THE
TOUGHEST TWO SCHOOL YEARS IN
MEMORY.
SO MANY CHALLENGES FACED BY KIDS
AND PARENTS AND EDUCATIONAL
STAFF.
WHERE HAS THE PANDEMIC HIT
HARDEST IN YOUR MIND?
>> DEFINITELY LEARNING LOSS,
KIDS NOT BEING IN THE CLASSROOM,
EVEN DURING THAT SHORT TIME
PERIOD WHEN NOBODY WAS IN REALLY
HAD A BIG EFFECT.
A CHILD EVEN NOT HAVING THEIR
GRADUATION OR PROM CAN HAVE
MENTAL HEALTH IMPACTS.
WE'VE SEEN THAT IN EARLY
STUDIES, AND ESPECIALLY SPECIAL
NEEDS FAMILIES, THEY PROBABLY
HAVE THE HARDEST TIME DURING THE
PANDEMIC, AS THAT LEARNING LOSS
IS GOING TO BE HARDER FOR THEIR
KIDS TO RECOVER MORE THAN
ANYBODY ELSE'S.
>> YEAH, WE HEAR A LOT ABOUT THE
LACK OF ACCESS TO REMOTE
LEARNING.
HAS THAT SHRUNK?
>> YEAH, WELL, LOOK, I THINK
IT'S SUPER IMPORTANT TO -- AND
I'M A BIG SUPPORTER OF IN-PERSON
EDUCATION.
AND I THINK WE HAVE TO MAKE THAT
WORK.
I DON'T KNOW IF REMOTE LEARNING
MAKES SENSE, ESPECIALLY AS WE'VE
SEEN THIS LAST VARIANT NOT AS
STRENUOUS AS PAST ONES, GOD
WILLING, AND I THINK WE HAVE TO
CONTINUE TO PUSH FOR IN-PERSON
EDUCATION AS MUCH AS POSSIBLE.
>> SO, IN YOUR MIND, I MEAN, IS
IT SO TERRIBLE THAT WE CAN'T
EVEN, LIKE, SAY THIS WEEKEND,
THERE'S GOING TO BE A BIG
SNOWSTORM, LET'S SAY THAT
HAPPENS IN THE MIDDLE OF THE
WEEK.
ARE WE UNPREPARED ENOUGH TO,
SAY, HAVE A SNOW DAY THAT
HAPPENS TO BE EVERYBODY HOME BUT
STILL IN SCHOOL?
>> YEAH, SO, WE'RE WORKING ON
SOME THINGS RIGHT NOW IN THE
SENATE EDUCATION COMMITTEE
RELATED TO THAT, AND I THINK WE
HAVE TO START BEING CREATIVE NOW
AS IT RELATES TO SNOW DAYS
MOVING FORWARD AFTER THE
PANDEMIC.
I DO ALSO THINK, YOU KNOW, LOOK,
ONE OF EVERYBODY'S POSITIVE
MEMORIES GROWING UP IS THAT SNOW
DAY, AND THAT IS FOR A LOT OF
KIDS, SO I DO THINK IT IS --
THERE'S A GOOD THING FOR A KID
TO HAVE A SNOW DAY AND BUNDLE UP
AND GO OUT INTO THE SNOW.
SO IT'S TRYING TO FIND THAT
BALANCE.
>> WE ARE SEEING FUNDAMENTAL
CHANGES IN HOW SCHOOLS DO
BUSINESS, SOME HAVE CANCELED
MIDTERMS, OTHERS HAVE ADJUSTED
THE WAY THEY'RE EVALUATING KIDS
WITH GRADES.
IT SEEMS UNREASONABLE TO THINK
THAT WE'RE JUST GOING TO GO BACK
TO NORMAL ONCE EMERGENCY
RESTRICTIONS ARE FINALLY LIFTED,
RIGHT?
NORMAL IS NOT AROUND THE CORNER.
>> THIS, UNFORTUNATELY, IS A
VERSION OF THE NEW NORMAL, AND I
THINK WE HAVE TO FIGURE OUT HOW
TO ADAPT AND DO THE BEST WE CAN.
OUR TEACHERS RIGHT NOW, AND
ADMINISTRATORS, ARE DOING AN
INCREDIBLE JOB UNDER VERY
DIFFICULT CIRCUMSTANCES.
I CAN'T IMAGINE, YOU KNOW, YOU
HAVE PARENTS THAT ARE SCREAMING
ABOUT MASKS OR DON'T WEAR MASKS
OR ANY OTHER ISSUE.
THESE EDUCATORS, UNDER VERY
DIFFICULT CIRCUMSTANCES, NOTHING
THAT THEY DID WRONG, NO PAY
INCREASE FOR THEM AS THEY'RE
GOING THROUGH THIS, REALLY HAVE
DONE AN INCREDIBLE JOB AND
CONTINUE TO DO THAT.
>> LOT OF STAFF SHORTAGES STILL
BEING REPORTED AROUND THE STATE.
HOW TERRIBLE IS THAT SITUATION?
>> IT'S VERY DIFFICULT, EVEN
FINDING SUBSTITUTE TEACHERS HAS
BEEN DIFFICULT, SO WE HAVE TO DO
A LOT.
I HAD A CALL YESTERDAY WITH THE
CHAIRWOMAN OF THE ASSEMBLY
EDUCATION COMMITTEE, MY
COUNTERPART, AS WELL AS MY
PREDECESSOR, NOW MAJORITY LEADER
RUIZ, AND THEY HAD DONE SOME
REALLY INNOVATIVE STUFF ON
TEACHER RECRUITMENT.
I PLAN TO HAVE SOMETHING OUT
VERY SHORTLY THAT SPECIFICALLY
LOOKS AT INCREASING TEACHER PAY
AND HOPEFULLY CAN BE A REAL
MODEL HERE AND REALLY WORK ON
RECRUITING A LOT MORE EDUCATORS
TO AN INCREDIBLE PROFESSION.
>> SCHOOL FUNDING IS THAT
800-POUND GORILLA SITTING OUT
THERE.
I GOT ABOUT A MINUTE.
YOU WANT TO FIX THE SCHOOL
FUNDING FOR ME -- FOR US TODAY?
>> SO, WE GOT A COUPLE THINGS
THAT WE HAVE TO DO.
WE HAVE TO START LOOKING AT HOW
OUR SCHOOLS ARE FUNDED, AND IT'S
FUNDED PRIMARILY ON PROPERTY
TAXES, AND I THINK IT MAKES
SENSE TO START LOOKING AT AN
INCOME TAX FORMULA.
WE ALSO HAVE TO LOOK AT
EXTRAORDINARY SPECIAL EDUCATION
FUNDING.
WE ALSO HAVE TO LOOK AT SCHOOL
DISTRICT REGIONALIZATION, AND
WE'RE ALSO GOING TO HAVE TO LOOK
AT FIXING THE INFRASTRUCTURE IN
OUR 600-PLUS SCHOOL DISTRICTS.
WE'VE GOT A LOT OF HVAC,
PLUMBING, ELECTRICAL, ROOFING
ISSUES, THOSE ARE ALL SOME OF
THE BIG CHALLENGES AND THEY ALL
RELATE DIRECTLY TO SCHOOL
FUNDING.
>> HOW WOULD AN INCOME TAX MODEL
BE DIFFERENT FROM THE CURRENT
SYSTEM?
I MEAN, OBVIOUSLY, ONE WOULD USE
INCOME TAX AND THE OTHER USES
REAL ESTATE TAXES, BUT WHAT'S
THE NET DIFFERENCE?
WHO'S AFFECTED BY THAT THE MOST?
>> YEAH, WE'RE IN THE EARLY
PROCESS OF LOOKING AT THIS, AND
IT WOULD REALLY HELP PEOPLE WHO
ARE SENIORS AND THOSE WHO ARE ON
A FIXED INCOME, ESPECIALLY THOSE
WHO NO LONGER HAVE KIDS IN THE
SCHOOL SYSTEM.
IT WOULD HELP THEM TRY TO STAY
IN NEW JERSEY, NOT MOVE TO
FLORIDA OR THE CAROLINAS, AND
KEEP IT AFFORDABLE FOR THEM.
WE'VE GOT FOLKS, DAVID, WHO ARE
PAYING $12,000 OR $13,000 IN
PROPERTY TAXES ON THE SAME HOUSE
THEY'VE OWNED, AND IT'S VERY,
VERY UNAFFORDABLE FOR THEM, SO
LOOKING AT INCOME TAXES, WHICH
WOULD AFFECT THOSE WHO ARE AT
THE HIGHEST INCOME BRACKETS, I
THINK, MIGHT BE A MORE EFFECTIVE
WAY TO LOOK ON HOW WE PAY OUR
SCHOOLS.
>> I'M RUNNING OUT OF TIME, BUT
I DID WANT TO TALK ABOUT THE
SCHOOLS DEVELOPMENT AUTHORITY,
BESET BY SCANDAL, BASICALLY OUT
OF MONEY.
WE JUST SAW VOTERS IN HOBOKEN
REJECT A LOCAL EFFORT TO BUILD A
NEW SCHOOL FOR $240 MILLION.
HOW ARE WE GOING TO BUILD NEW
SCHOOLS IN NEW JERSEY?
HOW ARE WE GOING TO PAY FOR
THAT?
>> YEAH, I THINK WE HAVE TO LOOK
AT THE FEDERAL FUNDS.
THE STATE IS SITTING ON
$3.2 BILLION IN FEDERAL FUNDS
RIGHT NOW AND I HAD A
CONVERSATION WITH THE GOVERNOR'S
CHIEF OF STAFF LAST WEEK ABOUT
LOOKING AT USING SOME OF THESE
FUNDS TO UPDATE OUR 600 SCHOOL
DISTRICTS.
THE EXECUTIVE DIRECTOR OF THE
SDA, MANNY DE SILVA, LIVES IN MY
DISTRICT.
I THINK HE'S A GOOD MAN.
I THINK HE'S DOING A GOOD JOB
AND I THINK WE NEED TO TRY TO
WORK WITH HIM TO SEE HOW WE CAN
EMPOWER SDA.
>> STEVE SWEENEY, THE FORMER
SENATE PRESIDENT, SAID THE SDA
HAD TO GO.
I ASSUME YOU'RE NOT OF THAT
MINDSET.
>> NO.
I'M NOT.
BUT I DO THINK THERE WERE
CHALLENGES THERE, MAYBE A NAME
CHANGE MAY BE WARRANTED, MAYBE A
REBRANDING EFFORT, BUT I DO
THINK THAT THE CURRENT FOLKS
WORKING AT SDA HAVE DONE A
REALLY GOOD JOB, AT LEAST IN MY
DEALINGS WITH THEM THIS PAST
YEAR.
>> HOW DIFFICULT IS IT GOING TO
BE TO SUCCEED AT CREATING SOME
SORT OF SCHOOL CONSOLIDATION,
WHICH A LOT OF PEOPLE SAY IS
GOING TO BE NECESSARY TO BRING
OVERALL COSTS DOWN?
>> YOU KNOW, WE MADE IT
VOLUNTARY AND I THINK IT NEEDS
TO START BECOMING FORCED IN SOME
EFFORTS, ESPECIALLY AS IT
RELATES TO HEALTHCARE SERVICES,
WASTE MANAGEMENT, SNOW REMOVAL,
I.T., COMMUNICATIONS.
WE CAN'T HAVE 600 DIFFERENT
ENTITIES ALL DOING THEIR OWN
THINGS.
I'VE GOT A REPORT HERE IN ONE
SCHOOL DISTRICT I'M SEEING WHERE
THEIR ADMINISTRATIVE COSTS HAVE
GONE UP MORE THAN 20% IN THE
LAST 5 YEARS WHILE THEIR
ENROLLMENT HAS GONE DOWN.
WE'VE GOT SO MANY DIFFERENT
CHALLENGES, BUT I THINK THAT
CONSOLIDATING SERVICES IS THE
WAY TO GO.
>> I SAVED MY TOUGHEST QUESTION
FOR THE END HERE.
THIS SCHOOL DESEGREGATION SUIT,
IT'S HEADED TO COURT IN MARCH, I
THINK.
IF THE REMEDIES INCLUDE
CONSOLIDATED DISTRICTS OR MAYBE
EVEN BUSSING, HOW DOES THAT
HAPPEN?
>> YEAH, WE'RE ALL GOING TO BE
WATCHING THAT CAREFULLY.
IT'S WITHOUT A DOUBT, NEW JERSEY
HAS A BIG CHALLENGE AS IT COMES
TO SEGREGATED SCHOOLS.
WE SEE IT ACROSS OUR 565 TOWNS,
AND I THINK THIS IS AN ISSUE
THAT THE NEW JERSEY LEGISLATURE
NEEDS TO FACE OUTSIDE OF THIS
FEDERAL LAWSUIT THAT'S IN FRONT
OF US.
SO, THIS IS SOMETHING WE HAVE TO
DEAL WITH.
WE ARE THE MOST DIVERSE STATE IN
THE COUNTRY, AND WE SHOULD NOT
HAVE SOME OF THE MOST SEGREGATED
SCHOOLS.
>> ALL RIGHT, VIN GOPAL IS THE
NEW CHAIRMAN OF THE SENATE
EDUCATION COMMITTEE.
SENATOR, GOOD TO SEE YOU, MAN.
THANKS FOR JOINING US.
>> THANK YOU SO MUCH.
GOOD TO SEE YOU, DAVID.
>> ALL RIGHT, LET'S BRING IN OUR
PANEL OF JOURNALISTIC SMARTIES.
STACIE SHERMAN, KATHERINE
LANDERGAN AND JOHN.
JUST HEARING SENATOR GOPAL TALK
ABOUT THE SCHOOL FUNDING FORMULA
AND THE SDA, WE'RE TALKING ABOUT
BILLIONS OF DOLLARS AT STAKE
HERE.
WHAT'D YOU THINK OF GOPAL'S
ANSWERS?
>> I MEAN, I THINK, YOU KNOW, HE
HAS A LOT OF DIFFERENT, FRESH
IDEAS, BUT IT'S STILL EARLY,
RIGHT?
I MEAN, HE JUST TOOK THE JOB
OVER FROM TERESA RUIZ, AND YOU
KNOW, IT'S GOING TO TAKE A
LITTLE WHILE FOR HIM TO FIGURE
OUT AND FLESH OUT HIS AGENDA AND
KIND OF DO IT UNDER THE
DIRECTION OF RUIZ AND I'M
INTERESTED TO SEE HOW THEY'LL
WORK TOGETHER AND HOW THAT
DYNAMIC WILL PLAY OUT.
>> STACIE, I FEEL LIKE THERE
WERE BILLIONS OF DOLLARS FLYING
AROUND THE STATE FROM THE
FEDERAL GOVERNMENT.
NONE OF THAT APPEARED TO BE FOR
SCHOOL BUILDINGS.
IS THE STATE GOING TO HAVE TO GO
BORROW MONEY FOR SCHOOLS NOW?
LET ME REPHRASE THAT.
THE STATE IS GOING TO HAVE TO GO
BORROW MONEY FOR SCHOOLS NOW,
RIGHT?
>> IT'S VERY POSSIBLE.
THEY DON'T HAVE JUST BILLIONS,
YOU KNOW, FOR SCHOOL
CONSTRUCTION AND SCHOOLS ARE IN
DIRE NEED OF REPAIR AND LOCAL
RESIDENTS AREN'T WILLING TO HAVE
THEIR TAXES, THEIR LOCAL TAXES
INCREASE TO PAY FOR IT AS WE
JUST SAW THIS WEEK IN HOBOKEN
WHERE THEY SHOT DOWN A
$241 MILLION BOND PROPOSAL THAT
WOULD HAVE BEEN ENTIRELY FUNDED
BY TAXPAYERS.
SO, THE -- I THINK THE FEDERAL
AND THE STATE GOVERNMENTS ARE
GOING TO HAVE TO STEP IN AND
SPEND MONEY.
>> I MEAN, THAT SCHOOL IN
HOBOKEN, THAT'S JUST DOWN THE
ROAD FROM ME, SOUNDED LIKE WHAT
CORY BOOKER USED TO CALL
CATHEDRALS OF LEARNING WITH, YOU
KNOW, TWO SWIMMING POOLS, LABS
AND ALL OF THAT.
YOU KNOW, $200 MILLION SCHOOLS,
IF EVERYBODY WANTS A
$200 MILLION SCHOOL, HOW ARE WE
GOING TO BE ABLE TO AFFORD THAT,
STACIE?
>> WELL, HOBOKEN IS A UNIQUE
ISSUE.
I MEAN, THEY'RE TRYING TO LURE
AND KEEP THE WEALTHY FAMILIES
THAT ARE SENDING THEIR KIDS TO
CHARTER SCHOOLS AND PRIVATE
SCHOOLS.
THEY WANT THEM GOING TO THE
PUBLIC SCHOOLS.
SO, THERE'S A BALANCE, AND SO
THIS IS WHAT THEY'VE BEEN TRYING
TO DO IS OFFER AMENITIES LIKE
THIS IN ORDER TO GET THE KIDS
BACK INTO THE PUBLIC SCHOOL
SYSTEM AND SHOW THEM THAT THEY
CAN GET EVERYTHING FROM A
PRIVATE SCHOOL AT A PUBLIC
SCHOOL.
SO, YOU SEE BOTH POINTS AS A
BALANCE THAT THEY'RE TRYING TO
STRIKE, AND THIS JUST WAS NOT
PALATABLE FOR VOTERS.
>> THIS REMINDS ME, WATCHING
THIS B ROLL, REMINDS ME OF HOW
PEOPLE WALK FUNNY IN COMPUTER
ANIMATIONS.
SO, I WANT TO SPEND SOME TIME
TALKING ABOUT BUDGETS AND THE
ECONOMY.
JOHN, IT'S BEGINNING TO LOOK A
LOT LIKE BUDGET SEASON.
THE GOVERNOR'S ANNUAL BUDGET
ADDRESS IS COMING IN JUST A FEW
WEEKS.
WHAT ARE SOME OF THE THINGS WE
SHOULD BE PAYING ATTENTION TO?
>> YOU KNOW, THIS YEAR, I THINK
THE CLOSEST -- WE'RE ALL
WATCHING REVENUES BECAUSE AS
REVENUES GO, SO GOES SPENDING
AND SO ONE OF THE BIG THINGS IS
THE BUDGET'S HAD A LOT OF TAIL
WIND OVER THE FIRST HALF OF THE
FISCAL YEAR AND THAT USUALLY
MEANS WE'RE IN GOOD SHAPE FOR
THE SECOND HALF BUT MORE MONEY
GETS COLLECTED IN THE SECOND
HALF SO WE HAVE A LONG WAY TO GO
STILL AND YOU KNOW, I THINK THE
KEY WILL BE WHERE THEY FORESEE,
BECAUSE REMEMBER, THIS FISCAL
YEAR STARTS IN JULY AND GOES ALL
THE WAY TO THE END OF NEXT JUNE.
SO THEY HAVE TO KIND OF PUT OUT
THE CRYSTAL BALL AND SEE WHERE
THE ECONOMY'S GOING TO GO, ALL
THE WAY OUT, MORE THAN 12 MONTHS
FROM NOW EVEN.
AND SO THAT'S A DIFFICULT TASK
COMING OUT OF A PANDEMIC.
IT'S BEEN A REALLY SWIFT
RECOVERY IN SOME WAYS BECAUSE OF
ALL THE FEDERAL INTERVENTION AND
NEW JERSEY STILL HAS LIKE
$3 BILLION IN FEDERAL MONEY TO
SPEND, EVEN AFTER ALREADY
SPENDING ABOUT $3 BILLION, SO
AWASH IN REVENUE RIGHT NOW, BUT
THE TRICK IS FIGURING OUT WHERE
IT'S GOING TO BE AT THE END OF
THE FISCAL YEAR THAT DOESN'T
START UNTIL JULY, AND SO THAT'S
THE TRICKY THING.
THE CURRENT BUDGET IS BALANCED
WITH SURPLUS, BASICALLY, BUDGET
RESERVES WERE USED TO BALANCE
THE CURRENT BUDGET.
YOU CAN'T DO THAT EVERY YEAR OR
YOU RUN OUT OF SURPLUS, AND YOU
NEED A SURPLUS, SO THAT'S SORT
OF THE BIGGEST THING TO LOOK AT
AND THEN, YOU KNOW, WHAT DO THE
GOVERNOR AND LAWMAKERS PROPOSE
AS SOMETHING NEW, IF ANYTHING,
IN RESPONSE TO THIS ELECTION
WHERE EVERYBODY SAID, YOU KNOW,
NEW JERSEY'S NOT AFFORDABLE, AND
SO ANY NEW, SHINY TAX RELIEF
MEASURE THAT GETS ROLLED OUT TO
TRY AND ADDRESS THAT
AFFORDABILITY ISSUE, I MEAN,
LAST YEAR, THEY DID UP TO $500
TAX REBATES, LITERALLY SENT
CHECKS TO PEOPLE, AND THAT
DIDN'T SEEM TO MOVE THE NEEDLE,
SO THAT'S ANOTHER THING I THINK
THAT WILL BE INTERESTING TO SEE.
>> YEAH, AND HOW IT IMPACTS THE
BUDGET, RIGHT?
BECAUSE IF AFFORDABILITY IS NOT
GOING TO COME FROM THE STORE
DOWN THE BLOCK, YOU KNOW,
LOWERING ITS PRICE FOR A BGLOCK
OF MILK.
AFFORDABILITY MEANS MY TAXES,
THE COST OF TRANSPORTATION,
ET CETERA, RIGHT?
>> I THINK IT'S ALL OF THOSE
THINGS, TO BE HONEST, AND I
THINK TAXES, OBVIOUSLY, PLAY A
BIG ROLE, AND MAYBE PEOPLE FEEL
LIKE THEY CAN INFLUENCE THAT
BECAUSE THEY CAN VOTE PEOPLE OUT
OF OFFICE OR, YOU KNOW, AS WE
JUST SAW, THE SENATE PRESIDENT
LOST HIS SEAT IN THIS MOST
RECENT ELECTION.
AND SO, MAYBE ONE OF THE THINGS
THAT'S EASIEST TO DO BUT MORE
THAN TEN YEARS AGO, JOHN CORZINE
CAME UP WITH PROPERTY TAX
REBATES AND HE GOT VOTED OUT OF
OFFICE SO IT'S ALWAYS A TRICKY
THING, AND YOU KNOW, WE'LL HAVE
TO SEE WHAT -- IF THERE IS A
SHINY NEW OBJECT OR IF THERE'S
SOME OTHER WAY THAT PEOPLE CAN
FEEL LIKE EITHER THEY'RE GETTING
A BREAK OR GETTING A GOOD DEAL.
>> RIGHT, AND IT'S ALL GOING TO
RUN THROUGH THE STATE BANK.
KATHERINE, IS THE PROCESS -- THE
BUDGET PROCESS GOING TO BE ANY
DIFFERENT THIS YEAR?
MOST OF THE HEARINGS WERE
VIRTUAL LAST GO ROUND.
WILL WE BE SEEING FUNDING
PITCHES IN-PERSON THIS TIME
AROUND?
>> WE DON'T HAVE THE SCHEDULE
YET, BUT I WOULD IMAGINE THAT
YES, IT WILL BE MORE IN-PERSON.
I THINK THE ONE THING TO REALLY
WATCH IN TERMS OF THIS BUDGET
PROCESS IS I RECENTLY SPOKE WITH
THE NEW SENATE PRESIDENT,
SENATOR SCUTARI AND HE HAS
INDICATED THAT HE WOULD LIKE TO
TRY TO NOT HAVE A RUSH AT THE
END OF THINGS, AND SO IF HE'S
ABLE TO ACCOMPLISH THAT,LIKE AT
THE END OF BUDGET SEASON, THERE
ISN'T THIS MAD DASH TO NEGOTIATE
AND PASS BILLS, THAT WOULD BE A
MASSIVE SHIFT IN WHAT WE'VE SEEN
IN TRENTON.
>> DO WE KNOW WHERE ALL THE
MONEY'S GONE?
I MEAN, THERE'S $3.2 BILLION
LYING AROUND.
HAS A LOT OF IT BEEN SPENT, OR
IS IT JUST WAITING FOR
GUIDELINES FOR USE?
>> IN TERMS OF THE FEDERAL
FUNDS?
>> THE FEDERAL MONEY, YEAH.
>> YEAH, I MEAN, I THINK IT'S
STILL A LOT OF IT HAS YET TO BE
SPENT.
AND SO THAT IS DEFINITELY
SOMETHING THAT'S GOING TO -- I
MEAN, A GOOD PORTION HAS BEEN
SPENT BUT THERE'S STILL MONEY
REMAINING, AND SO THAT'S
DEFINITELY SOMETHING THAT'S
GOING TO BE HASHED OUT.
>> IF THAT FEDERAL MONEY'S NOT
AROUND, THE GOVERNOR'S GOING TO
HAVE TO LOOK FOR SOME PLACE ELSE
TO GET MONEY, BUT HE SAYS NO NEW
TAXES.
THAT KIND OF DEPENDS ON THE
ROBUST ECONOMY, I THINK.
DO WE HAVE ONE OF THOSE IN NEW
JERSEY, STACIE?
A ROBUST ECONOMY?
>> WE ARE DEFINITELY DOING
BETTER THAN WE DID LAST YEAR.
A YEAR AGO, I WOULD SAY.
WE ARE ON OUR WAY UP.
IT'S JUST HOW QUICKLY WE GET
THERE.
OUR UNEMPLOYMENT RATE HAS
IMPROVED FROM A YEAR AGO, AND
THERE'S MORE JOBS, BUT I THINK
WE'VE STILL -- WE HAVEN'T GOTTEN
TO THE POINT WE WERE
PRE-PANDEMIC, SO I THINK THAT'S
THE KEY LEVEL THERE TO RECOVER
ALL THE JOBS LOST IN THE
PANDEMIC AND THEN GROW FROM
THERE.
>> SO YOU'RE SAYING JOBS IS THE
BOTTOM LINE, THE KEY INDICATOR,
AT LEAST FOR THE STATE'S
ECONOMY?
>> OH, ABSOLUTELY.
WE GOT TO GET PEOPLE BACK TO
WORK.
THAT'S RESTAURANTS NEED IT,
BUSINESSES NEED EMPLOYEES, BUT
THEY ALSO HAVE TO KEEP THEIR
LABOR COSTS DOWN, AND THEY HAVE
TO BE ABLE TO AFFORD TO STAY
OPEN, SO IT'S ALL ABOUT JOBS AND
GETTING THESE BUSINESSES BACK TO
NORMAL AGAIN.
>> THAT'S PART OF THE CONFLICT,
RIGHT?
SO MANY PEOPLE QUITTING THEIR
JOBS BECAUSE THEY WANT A
DIFFERENT LIFESTYLE, AND
BUSINESS SAYING, HEY, WE NEED
MORE EMPLOYEES, BUT WE DON'T
WANT TO PAY ANY MORE FOR THEM.
THAT'S -- GO AHEAD.
>> THAT'S THE BALANCE RIGHT
THERE, RIGHT?
I HAVE BEEN AT THE SAME JOB FOR
25 YEARS, SO I'M -- I DON'T KNOW
THIS -- SO MANY PEOPLE ARE -- I
DON'T KNOW THAT ABILITY TO JUST
QUIT LIKE THAT OR TO JUST CHANGE
AND SAY THAT, SO I THINK IT'S
INTERESTING.
THERE IS A BALANCE THERE.
SORRY, I'M LOSING MY VOICE.
THERE'S A BALANCE THERE BETWEEN,
YOU KNOW, HOW MUCH YOU PAY A
WORKER AND WHETHER IT'S WORTH
IT.
>> JOHN, NATIONALLY, WE'VE SEEN
CLOSE TO 6% GROWTH OVER THE
YEAR, ALMOST 7% FOR THE QUARTER.
HOW DOES OUR ECONOMY MEASURE UP
TO THAT?
NEW JERSEY'S ECONOMY.
>> IF YOU'RE REFERRING TO GDP
GROWTH, YOU KNOW, NEW JERSEY'S
HAD SOME PRETTY GOOD GDP GROWTH
AS WELL, BUT YOU HAVE TO KEEP IN
MIND THAT SOME OF THIS IS BEING
MEASURED OFF OF A TIME WHEN THE
ECONOMY WAS LARGELY SHUT DOWN ON
PURPOSE, AND SO THE GOVERNMENT'S
BEEN VERY ACTIVE IN TERMS OF
INTERVENTION OVER THE -- REALLY
GOING BACK WELL OVER A YEAR,
SENDING OUT STIMULUS PAYMENTS TO
INDIVIDUALS, BUMPING UP
UNEMPLOYMENT.
THE FED HAS BEEN REALLY ACTIVE
WHEN IT COMES TO FINANCIAL
MARKETS, AND SO, YOU KNOW, THE
EFFORTS, REALLY, SINCE THE BIDEN
ADMINISTRATION TOOK OVER, HAVE
BEEN VERY AGGRESSIVE IN TERMS OF
TRYING TO PREVENT A REALLY DEEP
RECESSION, AND SO WE'RE SEEING,
YOU KNOW, THIS ISN'T HAPPENING
JUST ORGANICALLY OFF OF A NORMAL
BASE, YOU KNOW?
THIS IS BEING MEASURED OFF A
DIFFICULT SITUATION WITH A LOT
OF FEDERAL INTERVENTION.
THAT ALL SAID, YOU KNOW, GROWTH,
YOU KNOW, YOU WANT TO SEE
GROWTH.
BUT THAT'S JUST ONE INDICATOR.
THE GDP NUMBER.
AND NEW JERSEY'S SEEN SOME
GROWTH AS WELL.
UNEMPLOYMENT IS THE OTHER BIG
INDICATOR, AND AS STACIE NOTED,
IN NEW JERSEY, WE'RE BEHIND THE
FEDERAL UNEMPLOYMENT RATE AND
OUR PACE OF RECOVERY, WE HAVE
HAD A LOT OF IMPROVEMENT OVER
THE LAST YEAR, BUT OUR PACE OF
JOB RECOVERY HAS TRAILED THE
PACE OF THE NATIONAL RECOVERY AS
WELL.
NOW, THERE'S ROOM STILL TO GO ON
THAT, BUT ONE IMPORTANT THING TO
NOTE IS WE CAN SOMETIMES HAVE
TWO ECONOMIES, RIGHT?
I MEAN, THERE'S HOW PEOPLE --
PROFESSIONALS, UNFORTUNATELY,
GOT IMPACTED, THEY CAN WORK FROM
HOME AND MAYBE NOT HAVE FELT THE
SAME PINCH THAT PEOPLE IN THE
LOWER WAGE POSITIONS AND LOWER
INCOME BRACKETS, IT SEEMS LIKE
THE RECOVERY THAT STILL HAS TO
HAPPEN, UNFORTUNATELY, IS AMONG
THE PEOPLE WHO NEED THAT
RECOVERY THE MOST.
AND SO, WE HAVE TO BE CAREFUL
ABOUT SAYING, YOU KNOW, NEW
JERSEY'S IN THIS GREAT PLACE.
NEW JERSEY'S HAD A LOT OF
IMPROVEMENT OVER THE LAST 12
MONTHS, FOR SURE, WHETHER YOU'RE
TALKING ABOUT JOBS OR GDP
GROWTH, BUT YOU KNOW, WE CAN'T
LOSE SIGHT OF THOSE THAT ARE
STILL TRYING TO RECOVER.
>> KATHERINE, SMALL BUSINESS
SAYS THEY'RE HURTING FOR STAFF,
PEOPLE ARE LEAVING THEIR JOBS.
A LOT OF PLACES EXPERIMENTING
WITH AUTOMATION AND RESTAURANTS
CLOSING THEIR DINING ROOMS IN
FAVOR OF CURBSIDE PICKUP.
WHAT'S HAPPENING HERE?
ARE WE GOING TO LOOK BACK IN A
DECADE AND SAY, WOW, THAT WAS A
PARADIGM SHIFT BACK IN 2022?
>> RIGHT.
I MEAN, THEY'RE CALLING IT THE
GREAT RESIGNATION FOR A REASON,
RIGHT?
WE'RE JUST SEEING SO MANY PEOPLE
LEAVE THEIR JOBS, PARTICULARLY
IN THE SERVICE SECTOR WHERE
PEOPLE ARE KIND OF JUST FED UP
AND THEY JUST, YOU KNOW, THEY
SAY THAT THEY'RE DONE.
THIS HAS BEEN REALLY HARD FOR
BUSINESSES, YOU KNOW, AS YOU
NOTED, WITH STAFFING.
YOU KNOW, AND THEY FACE A LOT OF
OTHER CHALLENGES.
ONE BIG ISSUE IN THE BUSINESS
COMMUNITY HAS BEEN TAX INCREASES
AS A RESULT OF THE DEPLETING
UNEMPLOYMENT INSURANCE FUND, SO
THERE'S A LOT GOING ON HERE, AND
I THINK, YOU KNOW, THERE HAS
BEEN A LOT OF RELIEF FROM THE
MURPHY ADMINISTRATION, YOU KNOW,
FROM THE FEDERAL GOVERNMENT, BUT
BUSINESSES JUST SAY, YOU KNOW,
IT'S NOT ENOUGH.
THEY'RE NOT ABLE TO STAFF, YOU
KNOW, TABLES.
I REMEMBER I WAS AT A RESTAURANT
RECENTLY, AND THERE WAS ONE
SERVER COVERING, LIKE, FIVE
TABLES AND SHE HAD JUST STARTED,
HADN'T BEEN A WAITRESS BEFORE,
AND I THINK THAT'S EM WHBLEMATIF
WHAT WE'RE SEEING IN RESTAURANTS
EVERYWHERE.
>> YEAH.
JOHN, YOU'VE BEEN TO MORE
PENSION BOARD MEETINGS THAN
ANYBODY ON THIS PANEL FOR SURE.
I SAW A REPORT THIS WEEK THAT
SAYS THE FUND MADE UP OF MONEY
FROM PUBLIC EMPLOYEES PENSIONS
IS UNDERPERFORMING.
WHAT DOES THAT MEAN TO STATE
RESIDENTS?
>> WELL, THE THING TO KEEP IN
MIND IS PENSIONS IN NEW JERSEY,
FOR PUBLIC WORKERS, SO, THESE
ARE PEOPLE WHO HAVE SOME SORT OF
GOVERNMENT JOB, ARE FUNDED BY
CONTRIBUTIONS THAT THE WORKERS
MAKE BY CONTRIBUTIONS THAT THEIR
TAXPAYER EMPLOYERS MAKE, AND
THEN ALL OF THE ASSETS ARE
INVESTED IN, YOU KNOW, STOCKS
AND BONDS AND OTHER TYPES OF
INVESTMENTS TO HOPEFULLY GAIN
SOME YEAR OVER YEAR GROWTH, AND
SO WHEN WE SAY UNDERPERFORMING,
THEY HAVE AN ASSUMED RATE, WHICH
IS BASICALLY WHAT THEY THINK
THESE INVESTMENTS WILL GENERATE
ON AN ANNUAL BASIS IN TERMS OF
EXTRA REVENUE, SO IT EASES THE
BURDEN A LITTLE BIT ON EMPLOYEES
AND TAXPAYERS, AND LAST FISCAL
YEAR, WE HAD A BANNER YEAR FOR
INVESTMENT RETURNS, ALMOST 30%
YEAR OVER YEAR, WHICH IS, YOU
KNOW, AT LEAST IN THE TWO
DECADES A RECORD.
THEY'VE COME BACK DOWN TO EARTH,
ACCORDING TO THE MOST RECENT
FIGURES THAT WERE REVIEWED.
THESE THINGS TEND TO GO UP AND
DOWN OVER THE FIVE AND TEN-YEAR
RUNS, YOU KNOW, WE'RE RIGHT
AROUND THAT ASSUMED RIGATE.
IN FACT, OVER THE LAST FIVE
YEARS, ANNUALIZED, IT'S ABOVE
IT.
SO WITH NUMBERS, YOU CAN LOOK AT
THEM IN A MILLION WAYS AND, YOU
KNOW, IN THE SHORT-TERM, THAT
WAS A LITTLE BIT OF A CONCERN,
BUT THE BIG PICTURE, AT LEAST IN
TERMS OF INVESTMENT RETURNS, YOU
KNOW, THE PENSION FUND IS STILL
IN A DEEP HOLE BECAUSE THE STATE
DID NOT FUND IT PROPERLY FOR
MORE THAN TWO DECADES, BUT IN
TERMS OF THE LATEST INVESTMENT
RETURNS, YOU KNOW, A LITTLE
BELOW THE ASSUMED RATE, BUT
STILL HOLDING ON IN THE BLACK.
>> JOHN, STACIE, KATHERINE, GOOD
TO SEE YOU ALL.
THANKS FOR HANGING OUT WITH US
TODAY.
THAT WAS "ROUNDTABLE" FOR THE
WEEK.
THANKS ALSO TO SENATOR VIN
GOPAL.
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