Judge tells Chris Christie: Put more money in pension funds
By MICHAEL CATALINI and GEOFF MULVIHILL
7 hours ago
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TRENTON, N.J. (AP) — Republican Gov. Chris Christie and the
state's Democrat-controlled Legislature must find $1.57 billion to put
into pension funds for retired public workers, a judge ruled Monday in a
decision that comes as a major legal blow to the governor as he
prepares to run for president.
Unions for public workers sued Christie after he announced last year
he would not make the full pension payments he had agreed to in a 2011
overhaul that was one of his main accomplishments.
Superior Court Judge Mary Jacobson's ruling could force big changes in the state budget late in the fiscal year.
"In short, the court cannot allow the State to 'simply walk away from
its financial obligations,' especially when those obligations were the
State's own creation," she wrote in the ruling, released a day before
Christie is scheduled to make his budget proposal for the fiscal year
starting July 1.
The judge didn't issue a deadline for a solution, but she was clear
the state's obligation was to pay $1.57 billion more into pension funds.
The state government will appeal, the governor's office said in a combative statement.
"Once again, liberal judicial activism rears its head with the court
trying to replace its own judgment for the judgment of the people who
were elected to make these decisions. This budget was passed by the
Legislature and signed by the governor with a pension payment," Christie
spokesman Michael Drewniak said in a statement. "The governor will
continue to work on a practical solution to New Jersey's pension and
health benefits problems while he appeals this decision to a higher
court where we are confident the judgment of New Jersey's elected
officials will be vindicated."
Representatives of government employees, meanwhile, declared victory.
"It's a win for all of the participants in the fund and the
retirees," said Kenneth Nowak, a lawyer who argued the case on behalf of
the New Jersey Education Association, the state's largest teachers'
union.
Christie, who's laying the groundwork for a presidential run but
hasn't announced a candidacy, said reducing payments last year and this
year was the only reasonable way for the state to balance its budgets
after tax revenue fell short of expectations last year.
The legal dispute centered on whether the state was contractually
bound by the governor's 2011 promise to make up for missed or reduced
pension payments over a seven-year period.
The 2011 pension deal was one of Christie's major accomplishments as
governor and served as evidence he could work with Democrats to deal
with one of New Jersey's persistent financial issues. But it has become a
thorn in his side.
Last year, even before the
scramble to balance the budget, Christie decried the cost to taxpayers
as too high. When revenue came in under projections, he funded most of
the gap by cutting contributions. He said he's still making good on the
state's current obligation while suspending efforts to catch up from
past underpayments.
He reduced the contribution from a
planned $1.7 billion to $700 million last year. He wants to contribute
$681 million rather than the planned $2.25 billion this year.
The Legislature adopted a version
of the budget that would have made the full pension payment, but
Christie used a line item veto to implement his approach. Democratic
lawmakers on Monday said in light of that the judge's ruling was no
surprise.
"If the governor had signed the
budget we presented to him last June, we would not be confronted with
this massive fiscal crisis," state Senate President Steve Sweeney said.
At a court hearing over the cuts
in January, the state attorney general's office, representing the
Christie administration, was in the unusual position of arguing that a
law signed by Christie to make the deal more ironclad violated the
state's constitution. It argued that a law should not require spending
of future legislatures.
Unions say the law is
constitutional and it's only fair: Public workers had their
contributions increased and saw their retirement ages raised, while
retirees had their cost-of-living increases suspended.
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Mulvihill reported from Haddonfield. 4951