Court allows Christie to rob retirees, for now

The New Jersey Supreme Court is leaving Gov. Chris Christie able to shortchange the amount of money contributed to the state’s pension fund as the deadline for adopting a budget nears, reversing a lower court’s decision and handing a defeat to public workers.

New Jersey’s top court has yet to rule on whether taxpayers must deposit more toward the pension funds for public workers, but today’s 5-2 opinion asserts that Christie and state lawmakers should get their act together by making political choices rather than rely on the Judiciary.

Christie scored a political victory under the ruling authored by Justice Jaynee LaVecchia.

LaVecchia was named to the top court by former Gov. Christine Todd Whitman, who began the practice of balancing the state budget by cheating pension funds.

A lower court judge earlier this year said that the Republican governor and Democratic Legislature must pay more into pensions for this fiscal year as part of a 2011 law.

Christie has argued that the state cannot afford it, that a law he signed in 2011 is unconstitutional and that the court should not wade into budget decisions.

Unions for workers say the governor is bound by the law he signed and note that while workers are paying more for their retirement benefits, Christie is simply not paying the state’s bills.

Last year, Christie slashed $1.6 billion from the state’s fiscal 2015 public pension contribution. That and other actions have been called severely irresponsible.

The cuts prompted lawsuits by public sector unions and retirees, who won in lower court when a state judge decided that 2011 pension reforms created a contractual right obliging the state to pay its fair share into the retirement system.

Even if the court ultimately orders Christie to restore the funding, he has said the state does not have the money to make the payment.

New Jersey has paid about $600 million in fees to Wall Street money managers over the past year, more than four times the $140 million spent in 2010 on investment advisers.

A commission headed by former Federal Reserve Chairman Paul Volcker recently concluded, “New Jersey has relied on a variety of one-time maneuvers to balance general fund budgets for the three years studied, including sweeping funds out of accounts earmarked for specific purposes, such as the Clean Energy Program. It has accelerated revenue from future budget years, including front-loading payments for a 15-year contract signed with a private sector company to manage the state lottery. It has drained rainy day fund reserves; delayed property tax rebates; and, to achieve a cash infusion, restructured a bond issue backed by proceeds of the 1997 Master Tobacco Settlement with states.”

The Volcker panel also stated, “For decades, governors of both parties have balanced New Jersey budgets by declining to put aside the amount of money actuaries say is necessary, on an annual basis, to ensure that the state will be capable of covering future promised benefits.”

Such shady fiscal practices have led credits scoring agencies to cut New Jersey’s bond rating nine times since Christie took over as governor.


“Our pension and health benefits crisis is jeopardizing the future of New Jerseyans of all walks of life, not just those workers and retirees in the public sector,” said Erica Klemens, the state director for Americans for Prosperity, in response to the ruling. “The reality is no matter how the Supreme Court had ruled today; this serious crisis would not have gone away.”

A coalition of public employee unions including NJEA, the New Jersey State AFL-CIO, AFSCME, AFT, CWA, IAFF, IFPTE, and others will hold a press conference at the State House to respond to the ruling at 2:00 p.m.

“It is my expectation that all parties will now return to the table to negotiate a comprehensive solution to this issue,” said Republican Sen. Tom Kean.

“Today’s ruling is disappointing because it fails to make Governor Christie keep his promise to hard working law enforcement officers,” said PBA President Patrick Colligan. “The fact is that our members agreed to pay an additional 1.5% directly from their paychecks to fund our pensions as a result of the Governor’s own highly touted pension law.

“While the Governor promised to use these funds to help secure our pension fund, he is now hiding behind the courts in an effort to continue syphoning these funds for his own political gain. This is not leadership,” said Colligan.

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