Reining In Out-of-Control Spending

By: Michael M. Shapiro

As New Jersey copes with its increasing budget woes, perhaps the Legislature should consider several measures that would help reduce out-of-control spending: unannounced audits and the elimination or transformation of pension credit for part-time government work.

A bill sponsored by Assemblyman Jon Bramnick (R) currently languishing in the State Legislature, A-222, would require the Office of the State Auditor to perform unannounced audits of any program of a State or State-supported agency as long as such an audit is requested by any member of the Legislature.

The bill creates avenues for abuse by mandating that if a Legislator requests an audit, the Office of the State Auditor must conduct one. As a result, a Legislator could use the Office to target foes, leading to unnecessary audits that are both costly to the State and unjustly embarrassing to the victim. Therefore, requests from Legislators for audits should be treated like all other requests and should not result in a required audit.

The bill also does not go far enough. All government employees at all levels of government as well as all members of the public should be able to request an unannounced audit. The Office of the State Auditor can independently evaluate each request, providing a written rationale for failing to grant such an application. Currently, audits are limited to State or State-supported agencies. If the Office of the State Auditor is able to conduct unannounced audits of any entity that receives State funding, not only would State or State-supported agencies be subject to unannounced audits, but so would County, municipal governments, and school districts, where a significant amount of the waste, fraud and abuse is currently taking place.

In addition to unannounced audits, a proposal by Senator Barbara Buono (D-Middlesex) to eliminate pension credit for part-time government employees should be given serious consideration. It might be suggested that if part-time government employees want to receive a government pension, they should obtain a full-time job and work the amount of hours and years such a position requires to obtain a pension.

Since such sentiment and the Senator’s proposal are likely to meet with significant resistance that could very well cripple the proposal, alternative legislation can be considered that would prohibit part-time government employees from being able to apply the pension credits they have earned in their part-time government jobs to full-time government work should they obtain such a position. Therefore, part-time pension credits should be applied against the part-time service and any pension credits obtained through full-time government employment should be applied against the full-time government salary.

Currently, pensions are calculated by using the average of the three highest years of salary.  The calculation could, hypothetically, be based on the average of the highest five years.  Part-time pension credits could then be applied against the average of the highest five years of part-time service divided by the number of years served.  Pension credits received from full-time government work could be applied against the average of the highest five years of full-time government service divided by the number of years served.  Using this formula, the State will save millions of dollars in pension costs every year.

Michael M. Shapiro, founder of ShapTalk.com, is an attorney who resides in New Providence, New Jersey. He currently serves as the Editor of The Alternative Press, www.thealternativepress.com Contact Mike at mike@shaptalk.com