Finance

Judge to Decide Constitutionality of Christie's Pension Cuts

June 6, 2014
 

A state judge announced today that she will hear a major challenge to Gov. Chris Christie's plan to take funds meant for public-workers' pensions to solve a budget crisis, a development that adds even more pressure on lawmakers and the governor as they scramble to finish a new budget by June 30.

In an order issued today, Superior Court Judge Mary Jacobson said she will hear a lawsuit brought by active and retired State Police troopers. Oral arguments will be held June 25, Jacobson said.

Through their unions, the troopers are challenging an executive order signed by Christie last month that takes $900 million designated for the pension system this fiscal year and uses it to plug an unexpected shortfall in the state budget that came to light in April.

The move is illegal under a pension overhaul Christie himself signed into law in his first term, the troopers argue, and it violates a section of the state constitution that says "the Legislature shall not pass any bill ... impairing the obligation of contracts."

Christie and state Treasurer Andrew Sidamon-Eristoff have said the alternative is to raise taxes or cut spending for schools and hospitals — neither of which Christie is willing to do. They said taking the pension money was a regrettable move but that New Jersey cannot afford to keep paying public workers the health and retirement benefits they currently get.

Ultimately, Christie said, the state constitution also requires a balanced budget every year.

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