Pension reform battle brewing in NJ
Funding New Jersey's public employees' pension system could be the first major fight in 2015 and it will likely pit long-time allies against one another. Gov. Chris Christie is calling for new reform, but state Sen. President Steve Sweeney (D-West Deptford) has drawn a line in the sand and said he will support further reform.
"He (Christie) has to fund it. We actually did the things that were necessary to fix it. He needs to fund the pension fund," Sweeney said. "No matter what changes you make to a pension system, if you don't meet the financial needs of it at the same time - no fix will work."
The law required the state to contribute $1.6 billion into the pension system last fiscal year, but Christie paid in only $696 million. He signed an executive order to enable the lesser payment. The payment for this fiscal year was to be $2.25 billion, but the governor said he'll contribute $681 million.
The governor must make the full $2.25 billion payment this year, according to Sweeney, who acknowledged it will be difficult.
"It's going to put a lot of pressure on the budget, but we knew it. The big picture here is the lack of growth in the economy and he's been the governor for five years now so he can't point fingers at others," Sweeney said.
In June, Superior Court Judge Mary Jacobson ruled in favor of Christie in a lawsuit seeking to stop him from slashing last fiscal year's payment into the public employees' pension fund, but she also ruled the unions have a contractual right to a fully funded pension system. That opened the door for another court battle to stop the governor from reducing this year's pension payment.
A hearing in the case is scheduled for Jan. 15.
Last fall, Christie began making his case for pension reform. He said it is an important, long-term project.
"It's something that we can't ignore because it will first crowd out any other type of investments the state wants to make in important projects around the state, and it will then ultimately bankrupt the state," Christie said.
In 2011, Christie and Sweeney partnered together to usher through historic reform to the public workers' pension and health benefits system.
"We're eventually going to have to deal with it, we dealt with it once in 2011, and we're going to have to take another crack at it," Christie said in early September. "We'll just continue to go after that though in a really fact-based way, and let the facts speak for themselves, and then we'll come up with some suggested solutions."