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Union plans to sue Christie over pension cuts
Question of the Day
TRENTON, N.J. (AP) - New Jersey’s largest state government employees’ union said Wednesday that it intends to sue Gov. Chris Christie over his plan to slash the state’s pension contribution, saying the cut would be illegal.
The announcement from the Communication Workers of America came the day after the Republican governor announced his plan to bridge an unexpected $2.75 billion budget gap over the next 13 months.
Christie proposed closing the gap mostly by scrapping about $2.5 billion in payments that he agreed to three years ago as part of an overhaul of a public workers pension system left underfunded by decades of skipped or skimped state contributions.
“Put aside how Christie’s actions are immoral. If the pension payments are not made, the plan will go bankrupt,” CWA state director Hetty Rosentien said in a statement. “Retirees and active workers will spend their retirement in poverty through no fault of their own.”
In a news conference Wednesday, Christie did not seem concerned about a lawsuit. “They want to sue? The courts are available to them,” he said. “They want to protest? The First Amendment is available to them. Go ahead and have at it.”
Christie issued an executive order Tuesday saying he would make a $696 million pension payment in June instead of the previously agreed-upon $1.6 billion.
He also said he plans to have the state contribute $681 million a year from now rather than the $2.25 billion called for under the budget he proposed earlier this year. He said those amounts are enough to cover the obligations to current employees, who are also paying into the system.
But the cuts do not cover what Christie called “the sins of the past,” or the liabilities.
State Treasurer Andrew Sidamon-Eristoff, who said he deserves blame for erroneous revenue projections, told the Assembly’s budget committee on Wednesday that those liabilities will continue to grow - and that the state remains on the hook to pay for them eventually.
The pension payment for the fiscal year that starts July 1 requires the Democrat-controlled Legislature to agree. Democrats have broadly condemned Christie’s plan and are bracing for a battle. Senate President Steve Sweeney, for instance, is planning to join a rally Thursday with labor and other liberal groups calling for full pension payments. Some are calling for the state to raise taxes on the state’s highest earners instead. Christie has said repeatedly that he won’t do that.
Assemblyman Jay Webber, a Republican from Morris Plains, said Wednesday that he wants the state to make the previously planned pension payment in June 2015, and pay for it with spending cuts elsewhere.
Sidamon-Eristoff also detailed some non-pension budget cuts Wednesday.
He said the state is cutting $15 million this year in its subsidy for New Jersey Transit and skipping a $13 million one-time payment to community providers of services to people with developmental disabilities.
Sidamon-Eristoff also said that the Homestead Rebate tax credit available to senior citizens, disabled people and homeowners with incomes under $75,000 would be applied in May 2015 instead of this June, a move he said helps the state’s cash flow since so much of its revenue arrives with income tax payments in April.
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