If you thought state budget talks were contentious, just wait a couple weeks until a working group organized by the Senate issues final recommendations for government reforms.

Its early draft included sweeping ideas like overhauling pensions, allowing local sales taxes, merging towns and school systems and putting tolls on interstates. Some of the nearly 60 ideas floated might not make the final report; subcommittees of the group are deciding that now.

Senate President Steve Sweeney, D-Gloucester, said a final report is expected by the end of July, to be followed by public meetings and hearings around the state.

“Any of the changes that we’re talking about are going to be extremely difficult. But all the easy things are done. The hard work really comes in now,” Sweeney said.

“There are some big things that can be done, need to be done and it’s past time to be done,” he said.

Sweeney said he hadn’t studied the draft recommendations closely enough to say which of the ideas he endorses.

“Some of them are pretty radical, but when Sen. (Steven) Oroho and (Sen. Paul) Sarlo met with our tax experts and our government experts and our economists, it’s radical surgery that needs to be done to save this state,” Sweeney said.

One of the ideas – taxing Shore rentals – made an early jump into this year’s budget talks. Gov. Phil Murphy criticized the idea, and it wasn’t immediately adopted.

Sweeney pushed Murphy to commit conceptually as part of a budget deal to the idea of making additional changes to public workers’ pensions and health benefits, a category that accounts for about one-third of the ideas in the early draft. Murphy refused to link the two though received a copy of the suggested recommendations in late June.

“There are some things in there that I find attractive and others that I don’t,” Murphy said.

Murphy has said he’s not willing to consider more changes to public workers’ pensions until a full contribution is being made by the state, which isn’t expected for another four years. He’s more open to health benefits savings.

“I think there’s that holy grail space where you save money for the individual, you save money for the state, and you get the individual with the same level of coverage, if not even better,” Murphy said.

At the end of May, Murphy announced task force that will study ways to save money on health care – both for public workers and the state. Its initial report is due in October.

The Economic and Fiscal Policy Workgroup organized by Sweeney suggests a number of health benefits changes, including the elimination of the “platinum” level option in the state’s health plans. It also says the state could consider changing pension formulas, capping pensionable salary – or even ending defined-benefit pensions entirely in favor of a 401(k)-like approach.

“We don’t have to be heavy-handed with the unions,” Sweeney said. “But we need to sit with them and they need to understand that we can’t fund anything anymore.”

New Jersey: Decoded cuts through the cruft and gets to what matters in New Jersey news and politics. Follow on Facebook and Twitter.

Michael Symons is State House bureau chief for New Jersey 101.5 and the editor of New Jersey: Decoded. Follow @NJDecoded on Twitter and Facebook. Contact him at michael.symons@townsquaremedia.com

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