New Jersey Supreme Court Sides With Christie On Scrapped Pension Contribution

The New Jersey Supreme Court ruled Tuesday that the state acted legally when it deeply slashed its scheduled 2015 pension contribution despite a 2011 law, signed by Christie, which mandated the full payment.

The 5-2 decision was a reversal of a lower court decision earlier this year that sided with public workers on the issue.

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The New Jersey Supreme Court on Tuesday ruled that public workers do not have a legally enforceable contract to greater pension funding, handing Gov. Christie a significant victory in a yearlong battle with public-sector unions.

Even though a 2011 law Christie signed explicitly granted workers a contractual right to pension funding, the 5-2 decision said that the state constitution prohibited the governor and the Legislature from establishing such a right without voter approval, because it created a debt.

With the ruling, the state averted a potential fiscal crisis. State lawmakers had faced the prospect of having to add nearly $1.6 billion to the pension system before the end of the fiscal year, June 30. Budget officials had warned that wouldn’t be possible, because the state had already disbursed money for school aid and other services.

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Crucial to the case, the law also granted public workers a contractual right to greater pension funding.

But facing what he described as an unprecedented revenue shortfall last year, Christie slashed the state’s contribution to the pension system for both fiscal years 2014 and the current one.

Public worker unions are upset because the 2011 law trimmed benefits and increased worker contributions, but the trade-off was supposed to be guaranteed contributions from the state. Workers say they held up their end of the bargain; but only three years after the law was signed, Gov. Christie slashed the state’s 2014 and 2015 payments by billions.

Photo By Walter Burns [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons