Christie vetoes giving unions control of police and fire pension
Advocates for giving a union-controlled board management of the police and fire pension say they will try again next year, after Gov. Chris Christie vetoed the proposal Monday.
Christie conditionally vetoed bill S3040/A99, suggesting that he would sign it with changes. But the proposed changes went far further than the plan’s backers would be willing to go, including a cap on sick-leave payouts that’s tangentially related and wasn’t part of the debate on the bill.
“Unfortunately, this bill goes too far and undoes significant portions of the bi-partisan pension reform legislation I signed into law in 2011, unduly jeopardizing the financial health of” the Police and Firemen’s Retirement System, or PFRS, Christie wrote in his veto message.
“I understand that police and firefighters (and, for that matter, all current and future pensioners) have concerns with the fiscal health of the pension systems. I share them,” Christie wrote. “But I refuse to repeat the mistakes of prior governors and legislatures who enacted pension legislation without ensuring appropriate safeguards for taxpayers nor securing significant concessions from labor. I refuse to hand PFRS a blank check, while handing the taxpayers the deposit slip.”
Senate President Stephen Sweeney, D-Gloucester, noted the bill passed 37-0 in the Senate and 60-4 with 11 abstentions in the Assembly.
“As disappointed as I am, I know we crafted a good bill that won broad-based support. And if not this governor, there will be another governor,” Sweeney said.
Sweeney said the public-safety unions didn’t sweeten their pensions in the 1990s, when other pension funds were changed in ways that reduced their stability, and should be rewarded for it.
“They’ve demonstrated they have the wherewithal and the willingness to do the right thing, and it’s for their pensions. I really do believe they would have done right by this,” Sweeney said.
Patrick Colligan, president of the New Jersey State Policemen's Benevolent Association, said unions agreed to make revisions to the bill in recent meetings with Christie’s senior staff but that additional conditions would then be added.
“It’s typical of what we’ve been dealing with for seven and a half years. I’m looking forward to January 2018, when we have a governor that respects us and will work with us,” Colligan said.
“It’s unfortunate. It continues to show his distaste in working with the public workers of the state,” Colligan said.
Christie sought to:
- Give unions and government seven members apiece on the board, rather than a 7-5 majority in favor of labor.
- Require the board to be bound by the provisions of the 2011 pension reforms.
- Shift more of the financial risk to the board.
- Require the new pension board to comply with public-records and public-meetings laws and report regularly to the executive and legislative branches.
- Cap payments for unused sick days at $7,500 or the amount already accumulated, whichever is greater.
“Despite the potential significant impact of this bill, I am willing to grant PFRS greater independence,” Christie said. “But, in return, I seek sufficient guardrails that adequately protect pensioners and taxpayers, and long-awaited reform of runaway sick pay benefits.”
Colligan said the sick-leave issue was never raised when the union met with Christie’s staff to discuss the pension management bill.
Mike Cerra, assistant executive director of the New Jersey State League of Municipalities, said the legislation provided Christie “a good opportunity as sort of a tradeoff” to try to resolve the sick-leave issue.
“We are pleased by the governor’s actions today because we think the recommendations add important safeguards for property taxpayers, which was really the focus of our concerns,” Cerra said.
“Since 70 percent of the funds are coming from taxpayers, and taxpayers bear the risk if there’s any shortfall, we thought it was vital for a balanced board,” he said.
Unions have been critical of investment decisions by the State Investment Council and say it would be fair for them to have control over management of the fund, which has around 70 percent of the money needed to pay promised future benefits. It is valued at around $26 billion.