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Christie’s Call For Pension Concessions Sets Up Budget Battle With Sweeney

Governor’s State of the State initiatives target a familiar foe -- public employee unions

chris christie
Credit: Amanda Brown

Gov. Chris Christie yesterday called for a new round of public employee pension concessions, setting the stage for a bitter budget battle with Senate President Stephen Sweeney (D-Gloucester) over changes to their landmark pension legislation -- a confrontation in which Christie holds the ultimate power.

After a brief apology for the "Bridgegate" scandal that is already the subject of five investigations, Christie used his State of the State speech to argue that “further pension changes are needed” because the annual payments required to restore the pension system to solvency prevent the state from increasing the funding for education, crime prevention, infrastructure, and other needed programs or enacting a tax cut.

“For the Fiscal Year 2015 Budget, the increase in pension and debt service costs could amount to as much as nearly $1 billion,” Christie declared. “That’s nearly $1 billion we can’t spend on education. That we can’t invest in infrastructure improvement. That we can’t use to put more cops on the street.”

“If we do not choose to reduce our soaring pension and debt-service costs, we will miss the opportunity to improve the lives of every New Jersey citizen, not just a select few,” he said, once again pitting the interests of the general public against those of public employees and their unions.

In fact, virtually every initiative in Christie’s State of the State speech targeted public employee unions, from his demand for zero payments for unused sick leave and Civil Service changes to reduce union protections in municipal consolidations to his push for extended school hours and an extended school year without any discussion of whether teachers would be paid for the additional work.

“This State of the State speech comes straight out of the Christie playbook we all know: When times are tough, he attacks public-sector workers and their unions,” Milly Silva, the executive vice president of Service Employees International Union Local 1199 who ran against Christie’s ticket as the Democratic candidate for lieutenant governor in November, said last night. “This is going to set up a major battle with the Legislature.”

Broken Promises?

Democrats, who control both the Senate and the Assembly, viewed Christie’s comments as a warning that he planned to renege on his commitment to increase state pension funding by about $600 million annually for seven years from Fiscal Year 2012 to FY2018, when the $5 billion estimated payment would be sufficient to put the underfunded pension system, which currently has an unfunded liability of more than $40 billion, back on a sound fiscal footing.

Sweeney and other Democratic leaders noted that Christie knew that the state’s fourth-year obligation would be $2.4 billion for the upcoming FY2015 budget when he pushed for the controversial legislation, which required teachers, police, firefighters, and state and local government employees to pay more toward both their pensions and their employee health benefits. For some employees, it was the equivalent of a 10 percent pay cut.

Sweeney, Assembly Speaker Vincent Prieto (D-Hudson), Senate Majority Leader Loretta Weinberg (D-Bergen), and Assembly Majority Leader Lou Greenwald (D-Camden) spoke for the Democratic legislative majority in both houses when they declared their unwillingness to either allow the state to renege on its commitment to make full pension payments or to demand further concessions from public employees.

“We’re not going to defund our commitment to the pensions,” Sweeney said emphatically, and Prieto promised there would be “no pension holiday.”

The Real Powerbroker

But Christie, as governor, has the ultimate power over pension payments and the ability to use that power to attempt to force further union concessions on pensions or other issues, such as sick leave and Civil Service, if he chooses to use it, as he clearly signaled a willingness to do yesterday.

While Christie signed the landmark 2011 pension law committing the state to make the increased annual pension payments for the next seven years in a triumphant ceremony at Trenton’s War Memorial with Sweeney by his side, the state’s annual budget law, which must be enacted by July 1, supersedes other laws.

Therefore, it is Christie who gets to decide initially whether to put the estimated $2.4 billion pension contribution required by the 2011 law into the budget for FY2015 he will unveil in his February budget speech or to put in a lesser amount.

If Christie puts in a lesser amount, Democrats and/or the unions would undoubtedly file suit challenging Christie’s right not to make the full pension payment. Christie, however, would welcome the suit, and there is no previous court order governing the issue, as there was when the New Jersey Supreme Court cited its previous Abbott v. Burke school funding decisions to order Christie to restore $500 million in funding he had cut from 31 urban school districts.

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