The Hall Institute recently asked several questions of the NJ gubernatorial candidates. The dialog between the Hall Institute and Ken Kaplan follows.

Hall Institute:

Perhaps, the most daunting long-term economic challenge confronting New Jersey  is the fiscal condition of the state's public pension system.  Given today's economic and political climate, what steps would you take to meet the state's growing pension obligations?

Ken Kaplan Responds:

A Star Ledger editorial from Nov. 3, 2008, referring to New Jersey’s public employee pension system, stated, “Just before Corzine took office in 2006, his old Goldman-Sachs colleague Philip Murphy headed a committee that did a comprehensive review of a system that, even then, was in deep trouble. The committee's final report said that ‘restoring integrity to the system is critical but ultimately the current structure of the benefit programs cannot be sustained over the long term (unless taxes are to be significantly increased or other spending significantly cut).’ …"

I favor the latter approach.  Spending must be significantly cut, in fact, drastically cut!  There are whole departments of the state that need to be eliminated.  By paring the state payroll today, we will also be paring pension obligations for tomorrow.  It also might be necessary to end the defined benefit pension plan for new hires, but that will be determined by future collective bargaining.  My approach to such negotiations will not be anti-union, but it will be pro-taxpayer.  I will not agree to salaries or benefits that outpace those available in the private sector.

But what about vested pension rights for retired workers or those about to retire?  Unfortunately, we the taxpayers are left holding the bag for the outrageous behavior of the current and past administrations that agreed to generous benefits and then failed to responsibly fund them.  I don’t want to penalize individual retirees and their families by denying them what they were promised, but fulfilling those obligations means that all of us in the state will have to get used to the government doing less for us and we doing more for ourselves.  Maintaining the current size and scope of the state government, while also meeting the state’s pension obligations, would require massive tax increases, and I will not stand for that.

We have far too much government in New Jersey: state, county, and local.  It must be cut down to size, and I would favor that even without a pension crisis.  New Jersey’s counties are arbitrary geographic divisions and bastions of patronage.  I would eliminate them in favor of voluntary regionalization where it makes sense to participating municipalities.  The slimmed-down versions of state and municipal government that I envision would still have to become more cost efficient and innovative.  Reason Foundation's new Annual Privatization Report 2009, details the latest trends and examples of how public officials are reducing costs and improving service delivery through public-private partnerships, outsourcing, and performance-based government.  Some of these methods could be useful in New Jersey.

Hall Institute:

What public policy directives would you institutionalize to balance the need to protect New Jersey’s environment with the need to ensure a healthy business climate?

Ken Kaplan Responds:

Overdevelopment is generally seen as an environmental evil.  On the way toward abolishing property taxes for all New Jersey property owners, I would first abolish them for the owners of undeveloped property.  Eventually, property taxes on developed properties would be replaced by user fees.  Thus the property owner in each instance would pay for what he actually required from the government, expanding on the principle of paying for water, sewer, and electricity based on usage.  But an undeveloped property should not be taxed in any event.  Taxing undeveloped property almost forces the owners to develop their property in order to have a revenue stream to pay the taxes.  That works in direct opposition to the costly Farmlands Preservation Program.  If the state would stop taxing property owners who do not require government services, more property would remain undeveloped by the choice of the owners, without wasting tax dollars to pay for incentives.

Basic environmental law says that you don’t have the right to spew toxins into air or water that migrates off your own property and thereby affects others.  I subscribe to that overview.   That said, government enforcement of laws designed to implement that principle must be reasonable and timely.  De minimus violations should not be cause for fines or business closures.  We must also be mindful that if our laws are more stringent than those of most other states, we will be unable to attract new business and will lose business that is already here.

I oppose cap and trade as an environmental policy.  I see it as a Rube Goldberg device which is unlikely to significantly reduce emissions but is likely to be very costly for consumers.

Hall Institute:

Studies conducted by the Hall Institute have shown that the cost of public higher education in New Jersey has increased at a pace higher than the rate of inflation. What actions should be taken by state government to control rising tuition rates? What actions should be taken by New Jersey’s public colleges and universities?

Ken Kaplan Responds:

There is no state constitutional mandate that I am aware of for the state government to provide higher education.  Therefore, public colleges and universities must become self sufficient.  All high school graduates do not require higher education, and those costs should not be borne by taxpayers.  Those who avail themselves of such education are likely to have higher life-long earnings which will more than compensate for the temporary financial hardships that obtaining the advanced education may entail. 

College students have choices, and we need to create more choices.  Public, private, and religious institutions offer associate and bachelor’s degrees.  They have varying costs and availability of scholarships.  Co-op programs enable students to earn while they learn, working part-time and going to school part-time.  This might lengthen the time needed to obtain a degree, but there is nothing sacred about taking four years to obtain a bachelor’s degree.  These programs need to be expanded.

Endowments can be enhanced at the public institutions by selling off surplus state property and putting the proceeds from those sales into those endowments.   Income from the endowments can help keep tuition rates reasonable.

Educational institutions need to deemphasize their edifices in an electronic age.  Interactive video conferencing can be used to great advantage.  High construction, maintenance, and energy costs are draining money which could be better spent on salaries for first rate professors or on cutting tuition fees.

Hall Institute:

New Jersey is entering uncharted waters this fall by electing a lieutenant governor for the first time in state history. Please provide a job description for the duties and responsibilities of the lieutenant governor in your administration.

Ken Kaplan Responds:

I chose John Paff as my running mate, because if he and I are elected, I want him to serve as Commissioner of the Department of Community Affairs. According to the DCA’s own website: “The New Jersey Department of Community Affairs (DCA) is a State agency created to provide administrative guidance, financial support and technical assistance to local governments, community development organizations, businesses and individuals to improve the quality of life in New Jersey.

DCA offers a wide range of programs and services that respond to issues of public concern including fire and building safety, housing production, community planning and development, and local government management and finance.”

John Paff has chaired the New Jersey Libertarian Party’s Open Government Advocacy Project for the past 5 years. He has served as a watchdog for New Jersey citizens, assuring that the workings of local government are properly recorded and made available for public scrutiny. As Commissioner of the Department of Community Affairs, his expertise on local government will stand New Jersey residents in good stead. He will only draw one salary. There will be no double dipping in our administration. As far as fulfilling his duties as Lieutenant governor, he will be kept in the loop regarding all my actions and goals as Governor, and will be ready to perform my duties when I am out of state or if I become unable to perform my duties for any reason.

Paff is a 1979 graduate of Rutgers University, where he majored in economics. He was president of City Line Insurance, Inc from 1979 – 1988, and currently manages rental real estate. A resident of Franklin Township for the past 23 years, he has been a member of the Middlebush Volunteer Fire Department in Somerset for 17 years and has been president of that fire company since 2008. He and his wife, Diane, are the parents of 2 children. I cannot be happier that John has agreed to be my running mate. I have admired his long time volunteer work on behalf of open government in our state, and I am excited about what he would be able to do as the head of the Department of Community Affairs.

Hall Institute:

As the health care debate is played out on the national stage, what are your plans for providing affordable, accessible health care to New Jersey citizens, including those who presently have no health insurance coverage?

Ken Kaplan Responds:

Healthcare in NJ is unnecessarily expensive. Compared to other state, health insurance policy options are limited and expensive. If you visit and put your information in, you’ll see what I mean. Take a look at the number of policies you can choose from and the range in prices. Then try it again using a different state and zip code (e.g. Pennsylvania 19104). Simply by crossing the Delaware I had the choice of almost four times as many plans, priced at almost a quarter of the rates in NJ. New Jersey residents need to be allowed to shop between states for the best policy. See CATO for more information on this subject.

Our New Jersey legislators have limited our health care choices and have created an unaffordable health insurance climate for all. Since 1992 the number of insurers has dropped from 28 to only 11. Meanwhile the number of uninsured has skyrocketed.

Health insurance companies should be allowed to sell a much broader spectrum of policies in New Jersey, from comprehensive to catastrophic, and everything in between. The state should not mandate what has to be included in any given policy. Let the buyer make those choices. Also, state law should allow health professionals other than physicians to perform the full range of functions that their education and experience qualifies them for. We need to make better use of physician assistants, registered nurses, and nurse midwives. Alternative practitioners of healing arts should also be allowed to treat patients, provided they do not misrepresent their credentials.

Finally, NJ residents should be allowed to deduct contributions to Health Savings Accounts from their taxable income. NJ is one of only four states that restrict this. HSA deductibility will increase the affordability of consumer driven HSA accounts coupled with a high deductible health plan.