Gov. Chris Christie’s administration warned the state Supreme Court on Friday that if it mandates certain pension contributions, judges could get dragged into future budget disputes.
Lawyers for the state government made their case in a filing in one of two lawsuits with unions for public workers over pension obligations, which have become a pressing political and legal issue in New Jersey.
The administration’s filing came in its appeal of a February lower court ruling that said the state has an obligation to contribute nearly $1.6 billion more this fiscal year for retirement funds.
The unions, the state said, “would create a constitutional entitlement that would embroil the judiciary in systemic second-guessing of the political branches’ decisions concerning the allocation of precious state monies” if they prevailed.
After a tax revenue shortfall last year, Christie, a Republican who is considering running for president next year, cut the taxpayer contribution to pensions for fiscal 2014 and 2015.
Superior Court Judge Mary Jacobson then ruled that the state could reduce the 2014 contribution because it was an emergency. But she said last June that she would not consider a lawsuit over the 2015 contribution until the fiscal year budget was finalized.
After that, Christie used a line-item veto on the 2015 fiscal year budget passed by the Legislature that would have made the full $2.25 billion pension contribution.
Then in February the judge ruled that the state was contractually obligated to put in the full $2.25 billion for fiscal year 2015 - more than three times the $681 million Christie plans to contribute this year.
Christie says he has a new plan in his budget to increase pension contributions over 10 years as part of a bigger shift that would include putting government workers on 401(k)-style pensions rather than their current defined-benefit plans. Unions have not agreed to such a change, however.
In its filing, the administration said that any obligation is trumped by the state constitution, including a clause that gives the Legislature say over each year’s budget appropriations.
The Democrat-controlled Legislature has filed a brief taking the unions’ side, though Christie’s administration says it should not be considered by the judges.
Also on Friday, unions for state workers made a filing in their lawsuit before Jacobson seeking to force the state to contribute more in fiscal 2016, which begins July 1.
Christie’s budget for the coming year includes a $1.3 billion pension contribution, which is less than half the $3.1 billion called for under a law he signed in 2011 to escalate contributions over seven years to make up for decades of skipped and skimped payments.
Lawyers for the administration say it’s too early to litigate because the 2016 budget has not yet been adopted by the Legislature or signed by the governor.
But the unions argued in the filing that Christie’s decisions regarding a pension contribution for fiscal 2015 and rulings by Jacobson have a bearing on the case.
The union filing said the judge’s ruling to wait for a final budget before considering the pension contribution figure was a legitimate decision at the time, but Christie’s line-item veto changed the legal picture.
“If the Governor had any intention of making the mandated pension contribution, he would have included it in his budget recommendation to the Legislature,” the court filing said.
Arguments in both cases are scheduled for May.
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