Suggested Recommendations Submitted by the Economic Fiscal Policy Workgroup Revisions State Local Tax Structure 9. Require Subehapter S-Corporations to remit tax payment on behalf of shareholders thus making the State tax deductible on federal taxes. Permit a revenue-neutral county or municipal Sales Tax option paid partly by out-of- . staters to be used to- cut property taxes by $1 billion in the wake of the SALT deductibility cut. Permit a Gross Income Tax deduction for charitable donations to New ersey?based charitable organizations. Require a comprehensive study of State tax exemptions (particularly Sales Use) to recommend the elimination of arcane and groundless exemptions. Establish a Commission of Certi?ed Public Accountants that would provide an ongoing review of taxation best practices and report back to the Governor and the Legislature on an ongoing basis. Shift focus of tax incentive programs toward small business. Split revenue from local Payments in Lieu of Taxes according to the same ratio used for property tax revenue. . Broaden the Sales Use tax base to professional services, shore rentals, and additional items. Consider options to make the tax more progressive. Eliminate tax loopholes and reduce tax rates to make changes revenue neutral. 10. Establish a circuit breaker form of property tax relief that would replace the Senior Freeze, Homestead Bene?t Program, and Property Tax Deduction. If the taxpayer pays over a certain percentage of income on property taxes, he or she would be eligible for a refundable income tax credit in the amount that exceeds the threshold. County Municipal Government Reform Shared Services 1. Cap sick leave payouts at $7,500 at rate of one-half day pay for each unused sick day, apply the payments to retirees? premium cost-sharing, and require payment over ?ve years. Cap sick leave at the rate that each hour was earned. Mandate municipal court consolidation] sharing under certain circumstances. Mandate countywide tax assessment based on Gloucester County model. Some study of the impact on counties with large urban municipalities may be necessary. Empower Local Unit Alignment, Reorganization and Consolidation Commission (LUARCC) to enforce recommendations. Consider making LUARCC an agency of the Legislature. . Require LUARCC to establish a minimum scale of services. If the scale is not met, sharing of services would be required. . Encourage ?joint meetings? for public services (police, fire, OEM, etc.) and change name to ?regional service agencies?. . Explicitly authorize county sheriffs or county police departments to assume local police responsibilities to encourage county-based policing. . Require shared service agreements to have alternate dispute resolution provisions, performance evaluation criteria, formula-based, ongoing fee schedule or negotiation process, and exit provisions. . Require municipalities with less than 5,000 to merge with adjacent municipalities over a ?ve-year period as dictated by LUARCC or the Department of Community Affairs. . Require municipalities to adopt GAAP accounting practices. . Consolidate collective bargaining from the local level to the State level for any State- funded bene?t. . Aggregate collective bargaining to a regional or State level to foster leverage in negotiations with aggregated State unions. . Expand the use of public private partnerships for building and infrastructure prOj ects. . Require municipalities to meet with their board of education and any local authorities twice a year to discuss shared services and other matters of mutual concerns; either as whole governing bodies of all entities or groups of entities, or as committees With the meeting in public with public comment on the subject. . Eliminate automatic municipal and county cap increases for added assessments and PILOT revenue. Require a line item spending offset and public justi?cation of appropriation as one?time or ongoing via an ordinance (like cap-banking). Pension and Health Bene?t Reform 95>er 9? . Eliminate Platinum level plan option for State Health Bene?t Plan (SHBP) and School Employee Health Bene?ts Plan (SEHBP) or require higher premiums for participation. Merge School Employees Health Bene?ts Plan into State Health Bene?ts Plan. Merge county colleges into the SHBP. Shift retired teachers to SHBP. Expand the use of MedicareAdvantage and issue separate contract for retirees in order to foster competition among plans. Prohibit the double coverage of spouses. . Require a third party audit of State contracts that have been extended for multiple cycles to identify ef?ciencies. . Move from de?ned bene?t pension system to de?ned contribution. Create a hybrid de?ne benefit (up to certain dollar amount) and de?ned contribution system for new and unvested employees. 10Require early retirees with full healthcare coverage to pay the same cost premium percentage they paid when they retired. Employ pension ?dc-risking? strategies including early lump sum buyouts. Eliminate or minimize health bene?t waiver payments to employees who forgo insurance coverage. Mandate transparency and real-time claims auditing with regard to SHBP SEHBP third party administrator. Expedite full funding of the PERS pension system quicker than other pension systems to maximize federal fringe bene?t reimbursement. Increase Public Employee Retirement System retirement age to be consistent w/ Social Security age. . Change PFRS formula to factor average of three highest years rather than last year. Cap pensionable salary at for all government employees except Supreme Court, Appellate Division and Superior Court judges Eliminate ability to qualify for multiple public pensions. Limit entry and membership in the de?ned bene?t system to those earning a minimum of $25,000 or working 30 or more hours a week, and convert part-time employees to a de?ned contribution pension plan. Convert four State holidays to ?oating personal time off (PTO). Leveraging Assets to Stabilize the Pension System Undertake a comprehensive review of the State?s ?xed assets in order to determine fair market values. Dedicate State certain infrastructure assets to the pension system g. 2 water systems, toll roads, etc.) . . Pass legislation enabling State and local governments to add assets to the pension system to reduce the unfunded liability and diversify pension revenue streams. Local water and sewer utilities could be contributed to a consolidated State water utility that is owned by the pension system. Install HOT Lanes (NJ Turnpike, I80, 295, 287, et a1.) and dedicate revenue to the pension contribution. When permitted by the federal government, install interstate tolls near the State line. Capture hidden value in assets -- dorms, prisons, nursing homes, hospitals, buildings, parking and vacant land through lease, advertising, public/ private partnerships, etc. Education Reform at the Administrative Level 1. Merge all K-6 and school districts into K-12 regional districts, with option for county school districts. . Establish two countywide school districts pilot programs. . Full State funding and administration of Extraordinary Special Education funding and reexamination of current capitation formula that provides the same formula aid to all school districts even if they don?t spend it on special education services. . Mandate that school districts be given a share of municipal revenue collected from Payments in Lieu of Taxes (PILOTS). . Rather than withhold State Aid for unauthorized school board expenditures (thus passing them on to property tax payers), prohibit such expenditures in non-emergency conditions. A Department of Education Comptroller or Of?ce of Fiscal Integrity can monitor expenditures and implement this policy. . Permit school districts to establish charitable organizations to support extra-curricular activities. If IRS allows, contributions could be used to offset property tax liability. . Eliminate Geographic Cost Adjustment in School Funding Formula.