Frustrated by endless growth in property taxes and public worker benefit costs, New Jersey's most powerful lawmaker earlier this year turned to a panel of accountants, economists and budget experts for help.

Their final report is out, and it includes huge plans for change in New Jersey, including merging school districts, adding tolled fast lanes and cutting government employee health care and pension benefits.

State Senate President Stephen Sweeney said he's trying to prevent New Jersey from confronting billion-dollar budget deficits in the near future.

"New Jersey is at the crossroads. In fact, we're beyond the crossroads. We're in trouble," Sweeney, D-Gloucester, said at a news conference Thursday at the Statehouse in Trenton.

But these recommendations are likely to face strong headwinds from public labor unions, local government and school officials and Gov. Phil Murphy, a Democrat.

Sweeney said Thursday that New Jersey's fiscal plights and that of its homeowners are too great to continue on unaltered.

He and state lawmakers will take their report on the road during the summer break leading up to the fall elections to build support.

"We are going to get moving on this now," Sweeney said, "because time is of the essence."

The report draws an outline of the powerful Democrat's legislative agenda.

It's not clear which of these proposals will become legislation. Many will likely require Sweeney to recruit Republican lawmakers to push through proposals likely to anger unions.

State Sen. Steven Oroho, R-Sussex, who sat on the panel, said many of the recommendations have been studied before but now there exists the "political will and courage" to move on them.

The proposals target property tax bills by merging the more than 300 K-6 and K-18 school districts into K-12 regional districts which typically have a lower per-pupil cost.

A draft of the report, obtained in June by NJ Advance Media, proposed requiring municipalities with fewer than 5,000 residents to merge with an adjacent towns. But that politically difficult proposal did not make the cut.

Instead, the committee pushes studies and commissions to promote shared services and consolidation -- without mandating mergers.

The committee also made several recommendations to cut the cost pension and health benefits for public workers. Pension and health benefits for active and retired workers are among the state's fastest growing expenses.

The pension fund for state and local workers has $59.7 billion in unfunded liabilities, as measured by the state. It has enough assets to cover only 62.4 percent of its liabilities to public workers. The pension debt is much higher when measured under national accounting standards.

Under one proposal, state and local government and school employees would move to less expensive health care plans. Under another, future retirees would have to contribute to the cost of their health care.

A third still would alter retirement benefits for new employees and those with fewer than five years of public employment. The first $40,000 of their salary would be pensionable, but any salary above that would become part of a retirement plan that acts more like a 401(k) than a pension. Under another iteration, those same workers would be shifted entirely into that hybrid retirement plan.

These proposals would cut increases in pension and health benefit costs by a third, according to the report.

One plan would pledge the New Jersey Turnpike as an asset to the public worker pension fund -- and add toll roads to pump new dollars into the cash-strapped pension system.

To raise more money, the state would create express lanes on federal highways such as Routes 78 and 80 that would charge motorists tolls for the convenience of driving on lanes with less traffic. Such lanes are in use in Maryland and Virginia.

The committee also tackled the sky-high sick time payouts that can cost municipalities hundreds of thousands of dollars for a single employee.

It recommends capping payouts at $7,500 for people below that figure and freezing in place those who have already exceeded that cap.

Sweeney has said he was motivated to take on these bedeviling issues after federal tax reforms capped deductions for state and local taxes at $10,000.

One recommendation would try to mitigate the impact of the $10,000 cap on state and local tax deductions for small businesses.

These S-Corporations, LLCs and partnerships report their business income on their gross income tax returns. About 260,000 taxpayers file their taxes in New Jersey this way. Sweeney wants to allow the business entities themselves to pay the state income taxes of their principals, as corporations don't face the same $10,000 cap.

The panel's recommendations, particularly those targeting public workers, put Sweeney on a collision course with Murphy, the freshman Democratic governor who has vowed to protect collective bargaining.

Murphy has said he wants to work with public worker unions on finding health care savings, but his goals for the pension system are limited to making full contributions annually.

Murphy said in a statement that he would review the group's recommendations.

"My administration stands ready to listen to any and all ideas on how to build a stronger and fairer New Jersey without unfairly burdening the middle class," Murphy said.

The governor said he inherited "a fiscal mess" from Republican Gov. Chris Christie.

"Our problem isn't simply how much state government spends -- it's how," he said. "Protecting tax breaks for the wealthiest and special interests while asking the middle class to shoulder more and more of the burden isn't fair and is the wrong approach to getting our fiscal house in order."

He added that "we have a bold, smart, and inclusive economic vision for how New Jersey's future can work for everyone," and that he has formed his own panel on how to find savings in the public employee health benefits program.

Sweeney said Thursday he's not looking for a fight and hopes to work cooperatively with unions and the governor, but it's clear he expects one.

Labor unions protested pension and health care reforms Sweeney and Christie teamed up on in 2010 and 2011. And the resentment lingers, so much so the state's largest public workers unions, the New Jersey Education Association, spent more than $5 million to unseat Sweeney in November.

"Of course we're going to have a fight," Sweeney said. "Any change that's worth anything comes with a fight. The easy stuff is done. it's gone."

In a statement, the NJEA called these recommendations "rehashed and rejected proposals that target middle-class public employees for deep cuts while glossing over the state's responsibility to live up to its long-neglected obligations."

NJ Advance Media staff writer Brent Johnson contributed to this report.

Samantha Marcus may be reached at smarcus@njadvancemedia.com. Follow her on Twitter @samanthamarcus. Find NJ.com Politics on Facebook.