U.S. Supreme Court Declines Review of N.J. Pension Funding Suit

The U.S. Supreme Court on Monday declined to hear a case, brought by New Jersey unions, arguing that Chris Christie broke a contractual obligation with workers when he slashed billions from scheduled state pension contributions in 2014 and 2015.

The New Jersey Supreme Court ruled last year that Christie could legally make partial contributions, even if it meant reneging on a 2011 law in which public workers agreed to benefit cuts in exchange for the promise of full, timely contributions from the state.

More from Reuters:

The U.S. Supreme Court on Monday rejected a bid by unions representing public employees including teachers and state troopers to force the state of New Jersey to pay the full share of its annual public pension contribution.

The court declined to hear the unions’ appeal, leaving in place a July 2015 ruling by the New Jersey Supreme Court that allowed Republican Governor Chris Christie’s administration to make only partial contributions into public pension funds.

Under bipartisan 2011 reforms, the state promised to step up contributions over seven years until reaching the full amount that actuaries say is necessary to keep it healthy.

In exchange, New Jersey teachers, state troopers and other government workers agreed to pay more. But in 2014, Christie slashed the state’s contribution for two years, citing a severe revenue shortfall and ultimately paying less than 30 percent of what was required under the reforms, according to the unions’ petition asking the U.S. Supreme Court to hear the case.

New Jersey’s 2011 law made state contributions a contractual obligation. Despite having championed the reforms and abided by them for two years, Christie then said the state’s fiscal emergency allowed him to cut contributions and that lawmakers cannot bind future legislatures to billions of dollars in spending.

New Jersey will likely make a partial contribution in 2017, as well; Christie, in his recent budget proposal, called for a $1.86 billion contribution, which represents 40 percent of the actuarially-required contribution.

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