Christie Touts Sweeney’s “Courage” in Signing Pension and Health Benefits Overhaul

Mark J. Magyar | June 29, 2011 | More Issues
But the battle is just beginning as Democrats spar over bosses' role, unions file lawsuits, and contract negotiations start anew

Credit: (Governor's Office/Tim Larsen)
Declaring that New Jersey is now “a model for America,” Gov. Chris Christie yesterday triumphantly put his name to a controversial pension and health benefits overhaul that has split the Democratic Party, revived accusations of boss politics, and made New Jersey the fourth state this year to strip public employees of collective bargaining rights.

Christie handed the first pen he used to sign the bill to Senate President Stephen Sweeney (D-Gloucester), whom he praised for his bipartisanship and “political courage” for joining with the GOP to pass legislation that two-thirds of his own Democratic Party members in the legislature virulently opposed. Christie also lauded Assembly Speaker Sheila Oliver (D-Essex), who could not make the ceremony, for the same reason.

The governor asserted that the legislation would restore the solvency of the pension system and save the state $132 billion over the next 30 years — although that figure is contingent upon the $75 billion in savings from the elimination of cost-of-living adjustments for current and future retirees that has already been challenged in court.

That challenge brings home an inconvenient truth: Despite the trappings of victory, the battle over pension and healthcare benefits legislation does not mark the end of what promises to be a long war between Christie and the public employee unions. The police unions have already said they are filing suit to block the new law. The governor and the unions that represent state employees are heading back to the bargaining table with Christie talking about pay cuts. And the unions are still deciding whose seats to target in the upcoming November elections, when all 120 seats in the state legislature are at stake.

Continued Criticism

Sweeney and a contingent of urban mayors were the lone Democrats to attend the invitation-only event held aptly at Trenton’s War Memorial, but Democratic and union critics were not silent.

“Governor Christie’s union busting bill signing today represents a dark day for New Jersey,” said Assembly Majority Leader Joseph Cryan (D-Union), who has emerged as the most vocal Democratic critic not only of the bill but also of the South Jersey and Essex Democratic power brokers who marshaled votes for it. “Today, the majority of Democrats in the General Assembly are forced to sit idly by, again, while the governor reaps the benefits of his divide and conquer strategy to achieve national prominence at the expense of New Jersey’s residents.”

Charles Wowkanech, president of the New Jersey State AFL-CIO, denounced the new law, which will require state and local government workers, including teachers, police and firefighters, to pay thousands of dollars more for their pensions and health insurance. It also bans collective bargaining on healthcare issues for at least four years.

“The enactment of this law is a terrible moment for New Jersey’s working families,” Wowkanech said. “It is a terrible moment for all of the police, firefighters, teachers, state and local government workers who pay taxes, played by the rules, and contributed to their pensions when government didn’t. And it is a terrible moment for everyone who cares about democracy and workers’ rights.”

But Christie and Sweeney asserted that the measure was necessary to guarantee that current and future retirees will be able to count on receiving pensions from a pension system that is $54 billion short and health benefits from a system that has $67 billion in unfunded liabilities, and both sharply criticized state union leaders.

Sweeney, an Ironworkers Union leader, recalled being picketed by union critics who put up a giant labor rat and handed out “Sweeney Weenie” hot dogs when he first proposed that public employees should pay more for their pension and health insurance coverage back in 2006. He asserted that the thousands of union members who have protested at the Statehouse in recent weeks “were being misled” by their union leaders. Christie dismissed the protesters as “uninformed… because their union leadership had so ill-served them by lying to them.”

A Broken Promise

Christie rejected criticism by police and firefighters union leaders that he had broken his written campaign promise not to do anything that would negatively affect their pension benefits. The governor said his Democratic predecessor, Jon Corzine, had misled him about the health of the state’s pension system.

The police unions already announced they are filing suit to block the new pension and health benefits law, focusing particularly on Christie’s plan to end all cost-of-living adjustments until the pension plans hit recommended funding levels. That particular provision represents $75 billion of the $132 billion in long-term savings, and it would send pension reform back to the drawing board if it were overturned, state Treasurer Andrew Sidamon-Eristoff said. The non-partisan state Office of Legislative Services (OLS) previously ruled in 2006 that any change in benefit levels for current retirees or those already vested in the pension system would violate state law.

In an exchange that does not bode well for the ongoing state labor contract negotiations, Christie and Hetty Rosenstein, state director of the CWA, yesterday traded charges over who was more willing to discuss healthcare savings at the bargaining table before passage of the Sweeney bill made the issue moot.

Rosenstein noted again that the CWA had proposed a healthcare plan designed to save $230 million, which Christie rejected as offering no real savings. The law signed yesterday provides for state workers to pay between 3 percent and 35 percent of their healthcare premiums on a sliding scale based on income phased in over the next four years. The plan would save only $10 million in the first year, but upwards of $300 million a year by 2016 when it is fully phased in, state Treasurer Andrew Sidamon-Eristoff said.

CWA negotiators have said that Christie demanded a 3.5 percent pay cut and no step increases for four years during contract negotiations. Christie said yesterday he had no inclination to give state workers a raise of any sort to offset the increased amount they will be paying toward their pensions and healthcare, which ranges from $1,142 a year for those making $25,000 to $6,058 for those earning $65,000.

Next Steps

Christie said he would meet with his state negotiating team Friday, the day the current state workers’ contracts expire, to discuss “the next steps.” Under state law, Christie has the power to impose his final offer after going through a fact-finding process, which state unions fear he will be the first governor to exercise.

Sweeney said he didn’t want to comment on Christie demanding salary cuts for state workers on top of their increased pension and healthcare contributions. “Contract negotiations are what they are, contract negotiations,” he said,” and we’ll see what comes out of it.” He then added with some frustration, “This was about protecting the pensions of 800,000 people. Nobody is talking about that. We did something very good for people here.”

What reporters did want to talk about yesterday was the split in the Democratic Party that produced the majority to pass Sweeney’s pension and health benefits bill, and whether the new alignment was the beginning of a power shift that would give Christie the working majority he needs to pass the Opportunity Scholarship Act (OSA) school voucher program, expand school charters, and experiment with the privatization of public school management in the lame duck session in December.

Christie has enjoyed an increasingly close working relationship with South Jersey Democratic power broker George Norcross, Essex County Executive Joseph DiVincenzo, and Union City Mayor Brian Stack, a leading power in Hudson County. Norcross and DiVincenzo engineered the coup that put their proteges Sweeney and Oliver into the top Senate and Assembly spots in 2009, and South Jersey and Essex Democrats, along with Stack, provided all 22 of the Democratic votes for the Sweeney bill.

When asked by a reporter if he talked to Norcross about providing support for the bill, Christie shot back, “You’re damn right.” The governor said, “I talked to everybody to get the bill passed. If I found anybody on the street who went to school with Senator Sweeney, I talked with them,” he added, an apparent reference to Sweeney’s childhood friendship with Norcross. “Anybody who I thought would have influence over the 120 members of the legislature, I spoke to.”

The “Norcross Provision”

Christie also confirmed with a simple “Yes” that he had signed off on the insertion of a controversial provision in the Sweeney bill that would have essentially barred public employees in New Jersey from seeking treatment from out-of-state hospitals or healthcare providers unless the same service could not be found in-state.

Union leaders and Democratic opponents blasted the proposed out-of-state ban as the “Norcross provision” because they believed it was designed to push more patients to Camden’s Cooper Medical Center, which Norcross chairs. Norcross, Sweeney and the proposal were the subject of an attack ad run in both the Philadelphia and New York markets by the New Jersey Education Association (NJEA), which represents the state’s teachers.

As furor over the “Norcross provision” mounted over the past week, the bill was watered down to require only that the state provide a low-cost plan that restricted out-of-state coverage, then it was dropped altogether.

Christie’s new coalition also provided the key votes in the Senate on a resolution that would have blocked the governor from transferring New Jersey Network’s public television license to WNET-TV 13 in New York — a transfer that union leaders have criticized as a favor to Steven Adubato Sr., the North Ward Newark Democratic boss who is closely allied with DiVincenzo politically and with Christie on charter school issues. WNET plans to use Caucus Educational Corp., the TV company headed by Adubato’s son, Steve Adubato Jr., to provide much of its New Jersey programming, and Democratic legislators said Adubato Jr. was openly lobbying them last week to approve the WNET bid.

The Democratic-controlled Assembly passed the resolution Thursday night, but it fell one vote short of passage in the Senate Monday, as four Democrats voted with the Republican majority to allow the transfer to go through and the layoff of NJN’s 130 employees to proceed on Friday.

While Adubato took the unusual step of issuing a press release to deny that he had talked with Christie at all about the WNET offer, two of the four Democratic votes came from Essex: Sens. Teresa Ruiz, who is a deputy chief of staff for DiVincenzo, and Nia Gill, whose vote was particularly incongruous because her district includes Montclair State University, whose bid to run the state’s public television network was passed over in favor of WNET. The other two Democratic votes came from Sens. Stack and Sandra Cunningham (D-Hudson).

“It was all about not bucking Adubato and DiVincenzo, and you know Stack and Cunningham are close to Christie,” one veteran Statehouse insider said.

The failure of the Democratic caucus to muster the votes to block the New Jersey Network privatization, coming on the heels of the pension and health benefits vote the previous Thursday, reportedly led former Gov. Richard Codey (D-Essex), who had been ousted as Senate president by Sweeney, and Sen. Ronald Rice (D-Essex), to question how Senate Democrats could allow political bosses to so brazenly control their votes.

Christie’s spirited defense of his conversations with Norcross — he wasn’t asked about DiVincenzo or Adubato — paled in comparison with his press conference’s best “made for YouTube” moment.

In response to a reporter’s question, Christie launched into a 90-second rant against Deborah Howlett, president of New Jersey Policy Perspective (NJPP), for daring to suggest that New Jersey ranked eighth in the nation in state and local government taxes, and was not the highest-taxed state in the nation (see Number of the Day: 8). Christie had asserted just that on Meet the Press the same day.

“Yeah, from Deb Howlett, an official of the Corzine administration, so let’s just end the conversation there,” Christie said mockingly. “If they were so good at counting the money, I wouldn’t have had as big a deficit as when I got here.”

“So you know anything that anyone gets from Deb Howlett regarding money should be put in the context of the fact that Jon Corzine told me during the transition that the fiscal 10 budget was fine, ‘Don’t worry about it, Chris, you’re going to cruise right into next year,’ and then I have to find $2.2 billion to fill the hole that he and Deb Howlett and the other geniuses in his administration created.”

“Okay, so don’t talk to me, about Deb Howlett’s analysis that the Star-Ledger prints on its front page because it puts forward their liberal agenda. And that’s what it is.”

Christie said a Boston College study that showed that “$70 billion in wealth walked out of this state because of the tax situation” showed the depth of New Jersey’s tax problem.

Howlett, however, said her institute’s analysis was based on hard data from the U.S. Department of Census and U.S. Department of Commerce.

“Every time he’s wrong on the facts, he attacks the messenger,” said Howlett, Corzine’s former communications director, who wrote the report with respected NJPP budget analyst Mary Forsberg. “It’s an age-old political ploy. He can call me a political hack all he wants, but facts are facts, and the fact is that New Jersey ranks eighth in the country in state and local taxes.”

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