Tag: New Jersey pension reform law

New Jersey Lawyers: 2011 Pension Reforms Invalid, State Doesn’t Have to Contribute to Pension System

New Jersey

New Jersey’s lawyers argued in court yesterday that Chris Christie was acting legally when he cut the state’s pension contribution last year by over $1 billion.

They argued that it didn’t matter that the state’s 2011 pension law – signed by Christie – mandated full pension payments from the state, because that law is unconstitutional.

More on the arguments from NJ.com:

A lawyer for the state argued today that Gov. Chris Christie cannot be forced to make full pension payments because the 2011 law committing him to fully fund the state system in exchange for union concessions was unconstitutional.

Interrupting the assistant attorney general, Superior Court Judge Mary Jacobson said the state’s case suggest that 2011 promise was “a hollow commitment.”

“You’re saying it should have been known at the time that it was a false promise,” Jacobson asked. “You’re saying that from the get-go, this statute, the requirement to make these contributions was void.”

[…]

Attorneys for the state said that the contract was unlawful from the start because the state cannot be obligated to any spending unless it’s approved by the voters — barriers imposed through the debt limitation clause and appropriations act.

Much of today’s arguments centered on whether the 2011 law conflicts with those restrictions.

The contract would interfere with the Legislature’s discretion over how the state spends its money, lawyers for the state said, and the state can’t be obligated to debt unless it’s approved by the voters.

Jacobson was skeptical of the state’s arguments that the appropriations act and debt limitations clause would trump the contracts clause, which appears in both the state and federal constitutions.

But, the state countered, the appropriation and debt limitation measures apply to the formation of contracts, while the contract clause applies to the enforcement of contracts.

In 2014, Christie cut a total of $2.4 billion in state payments to the pension system and used the money to cover revenue shortfalls elsewhere in the budget.

 

“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

Proposed New Jersey Bill Would Halt State Aid to Municipalities Not Complying With 2011 Pension Reforms

New Jersey State House

A New Jersey assemblyman proposed on Thursday a piece of legislation that would block state money to cities that aren’t complying with the state’s 2011 pension reform law.

From NJ.com:

[Assemblyman Declan] O’Scalon said he is proposing the legislation after reports surfaced that Newark had not been collecting payments that employees are legally required to pay toward their health care premiums.

Under the revised pension reforms Gov. Chris Christie signed in 2011, all public workers were required to contribute more toward its healthcare premiums, but state officials said earlier this year that Newark has not been compliant.

The city said in October that it took several months to update its payroll system in the wake of the law and that they did not know why the payments weren’t collected last year.

“It was long overdue, but it has come to light that the City of Newark has been ignoring the law since it was put into place,” O’Scalon said in a statement.

“The result is that the Mayor, Council members, and all employees in Newark pay less than the law requires – and worse, what common sense and fairness demand.”

The legislation would also dock the pay of elected officials and top finance department heads in municipalities that are not compliant, according to O’Scalon.

The proposed legislation would also establish noncompliance as grounds for impeachment or removal of the mayor of city officials, O’Scalon said.

O’scalon’s remarks arrive months after the state agreed to give Newark $10 million in transitional aid to address its budget crisis.

“Newark is a city that is facing tough issues and is legitimately going to need continued help from the state, but the local elected officials must lead by example,” O’scalon said.

The legislation will be officially introduced by the end of the year.

 

Photo credit: “New Jersey State House” by Marion Touvel. Licensed under Public domain via Wikimedia Commons