Pension ruling saps drama from budget process – for now

TRENTON (AP) — The pathway into law for Gov. Chris Christie's 2016 budget looks clearer than ever thanks to the New Jersey Supreme Court's ruling in his favor over the public pension payment.

But that won't stop the Democrat-led Legislature from pushing Christie to make the payment.

The biggest question surrounding Christie's $33.8 billion 2016 budget centered on whether the court would require him to make a payment to the pension according to a 2011 law the Democratic Legislature passed and he signed.

The question loomed over the Legislature's months-long deliberations on the budget, which must be completed by June 30, and muddied the outlook on how Christie and lawmakers would resolve the issue.

But this week's 5-2 court ruling likely means the end of a late push for extra revenue. Still, Democrats say they will send Christie a budget that includes the payment.

Here's a look at how the budget process is shaping up with two and a half weeks to go in the fiscal year.

THE DYNAMIC

New Jersey's governor is one of the most powerful in the country, thanks in part to the line-item veto. It is a budget-time weapon for Christie, who can strip out any provisions the Legislature might add. It also reduces incentives for collaboration when the governor knows the Legislature is unlikely to override his line-item vetoes. And that's exactly how this year is shaping up — similar to last year.

Specifically, with regard to the pension, Christie is seeking to pay $1.3 billion, which is nearly $2 billion less than the amount called for in the 2011 law. Democratic lawmakers say they will write their own version of a budget that includes that figure, but because of the veto pen Christie can slice the payment out. Christie is also reasonably assured that legislative Republicans would not side with Democrats in an override attempt. In nearly 50 attempts at overriding the governor, Democrats have been blocked each time.

Democrats have said they will pay for the payment in part with a tax on income over $1 million, but that would bring in just a fraction of what is needed to make the payment. Democrats have not specified how they would make up the difference.

"We're looking under every rock," said Assembly Speaker Vincent Prieto.

THE NEGOTIATING TABLE

In past years governors and lawmakers have negotiated their differences to craft a budget with enough support to become law, but that looks unlikely to happen this year. In part that's because there's little incentive for the governor or the Democratic leadership in the Legislature to do so.

Senate President Steve Sweeney says Christie can't be trusted at the bargaining table after reneging on the 2011 law, and public sector unions have said the same. Instead labor is pushing for constitutional amendment that would require the payment, but it's unclear whether that will be put on the ballot this November.

Legislative Republicans and Christie have called on Democrats to return to the table. Christie has offered the suggestions from a bipartisan commission that called for freezing the plans and transferring control from the state to the unions. But Democrats have balked at the idea.

THE FALLOUT

Fiscal year 2015 is wrapping up and 2016 seems about to begin without much budgetary drama. But that seems unlikely to remain the case in coming years as the $80 billion pension, which supports some 700,000 beneficiaries, inches closer to insolvency.

"This reinforces the state's ongoing reliance on one-time budget solutions and will perpetuate large structural imbalances and a rapidly increasing pension burden," said Moody's Vice President Baye Larsen.

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