Fourteen unions representing state public-sector employees announced Tuesday that they intend to sue Republican Gov. Chris Christie again over planned contributions to government employees’ pension funds.
The threat of an additional lawsuit adds to the intrigue surrounding the budget proposal that Christie made last week for the fiscal year that begins July 1. Christie used much of his speech to restate the case he has made for years — that pension and health insurance benefits for government workers are too costly and will continue to drag down spending on schools and other priorities and make tax cuts all but impossible.
Unions also sued Christie over his contribution reductions for the fiscal 2014 and 2015 budgets.
Christie cut both last year after a surprise state revenue shortfall.
A judge ruled that while the state was legally obligated to make a larger contribution in the budget year that ended June 30, 2014, she would let it off the hook because of the budget emergency.
But the same jurist, Judge Mary Jacobson, ruled last week that Christie and lawmakers must make good on a 2015 payment totaling about $2.25 billion - or nearly $1.6 billion more than what’s included in the state spending plan for the current fiscal year. She said a 2011 law signed by Christie gave ramped-up pension contributions the force of contracts. The state attorney general’s office, which argued on behalf of the governor, was in the unusual position of arguing that a law he signed was unconstitutional.
Christie’s administration is planning to appeal the decision. Christie, who is preparing for a possible 2016 presidential run, has spoken out against the ruling and has not made public any plans for how he would handle it if he does not prevail on appeal.
A spokesman did not immediately respond to a request for a comment Tuesday.
When Christie made his budget proposal, he trumpeted that the $1.3 billion pension contribution he wants to make in 2016 would be the biggest in state history.
But under that 2011 agreement, the state would be required to pay in about $3 billion for that year and even that higher amount would not make up for the reduced payments for 2014 and this year.
Christie also announced a “roadmap” to overhaul pension and health insurance again. Under his plan, the state would freeze current pension obligations, pass a constitutional amendment to guarantee the state’s obligation to retirees is fulfilled, then create a new 401(k)-style retirement plan for current and future government workers. It would be funded in part with savings from changing to less generous health insurance plans.
The New Jersey Education Association - which is among the unions planning to sue - has agreed to that framework but not to the specifics of an overhaul. Other public-employee unions have taken a harder line, saying they want to negotiate for changes with Christie only after he makes good on his previous pension promises.
“This governor’s continuing disregard for his own pension funding law leaves us no choice but to go back to court to resume this fight in court on behalf of hundreds of thousands of public-sector workers who make their full pension contributions and depend on the modest income they earn in retirement,” New Jersey State AFL-CIO President Charles Wowkanech said in a statement Tuesday.
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