Judge Hears More Arguments Thursday In Fight Over New Jersey Pension Payment Cuts

New Jersey State House

A Superior Court judge on Thursday will hear the latest round of arguments in the battle between New Jersey and public-employee unions.

The unions are suing the state after Chris Christie cut the state’s pension contribution by nearly $1.5 billion and used the money to over shortfalls in the general budget.

From NorthJersey.com:

If Judge Mary Jacobson rules against the Christie administration and orders the larger payment to be made, it could force the governor and lawmakers to come up with more than $1.5 billion in revenue midway through the state fiscal year or make new cuts.

The pension system is worth $80 billion and covers roughly 770,000 current and retired employees. But for years, governors, including Christie, have skipped or made only partial contributions into the system, leaving it funded at only 33 percent.

Unions that represent teachers, firefighters, state police and other public employees are arguing that a state law signed by Christie in 2011, which overhauled the pension system, also included a contractual obligation that the larger payment would be made.

Hetty Rosenstein, state director of the Communications Workers of America, one of the unions in the lawsuit, said the language in the 2011 legislation was framed specifically in response to prior court rulings on the pension funding issue.

“I think we’ve made a compelling case,” she said.

Administration attorneys have countered that the governor is required by the state constitution to maintain a balanced budget, giving him the authority to effectively ignore the law that calls for the larger payments if he needs the money to fulfill his constitutional responsibilities.

The pension reform law signed in 2011 mandated that New Jersey contribute a certain amount of money to the pension system each year.

But when the state faced a revenue shortfall of $1 billion in 2014, Christie made the decision to cut the state’s pension payment and use the money to fill the budget shortfall.

 

Photo credit: “New Jersey State House” by Marion Touvel – http://en.wikipedia.org/wiki/Image:New_Jersey_State_House.jpg. Licensed under Public domain via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:New_Jersey_State_House.jpg#mediaviewer/File:New_Jersey_State_House.jpg

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