Teachers Union Denies Christie's Claim of Pension Deal

by | February 25, 2015

By Maddie Hanna and Andrew Seidman

Gov. Christie said today that a plan has been outlined to fix the state's chronically underfunded pension system, claiming an "unprecedented accord" with the state's largest teachers' union on the issue.

As he delivered his budget address to the Legislature, Christie said a commission he appointed to propose changes to the pension system had a "negotiated and signed roadmap" -- agreed to by the New Jersey Education Association -- that would "fix the largest hurdle to New Jersey's long-term fiscal stability."

The union's president said earlier Tuesday that it had not agreed to the commission's recommendations, outlined in a report that had not been released by the time of Christie's speech.

The "roadmap" calls for a freeze of the current pension plan, which would be replaced by a new plan, and recognizes a need for health-care savings, Christie said. It would require the state to make payments to a trust overseen by the NJEA each year, though Christie said the amount of those contributions were still subject to discussion.

The proposal calls for a constitutional amendment that would ensure state funding. An amendment would need to pass each house of the Legislature with a three-fifths vote and be approved by voters in November.

Democrats, who control both houses of the Legislature, criticized Christie's speech as light on details and for focusing exclusively on public employees' pensions and health benefits.

Senate President Stephen Sweeney (D., Gloucester) called the address an "admission [Christie] has no plan to fix the economy of this state."

Sen. Paul Sarlo (D., Bergen), chair of his chamber's budget committee, described Christie's "roadmap" as a "cocktail napkin" that lacked specifics and couldn't be taken seriously.

Freezing pension plans would be "devastating" to public workers, said Assembly Speaker Vincent Prieto (D., Hudson).

On Monday, a state court judge ruled that Christie had violated the contractual rights of public workers by cutting a payment last year into the state pension system, backtracking on a payment schedule Christie had previously signed into law and celebrated as an example of bipartisanship.

Mercer County Superior Court Judge Mary C. Jacobson ordered Christie to work with the Legislature to add $1.6 billion into the pension system. On Tuesday, even Democrats acknowledged that would be a difficult task more than halfway through the fiscal year.

"You're not going to find that kind of money in this budget," Sweeney told reporters. But he suggested the Legislature would propose a tax hike on the state's highest earners to help fund the pension payment for fiscal year 2016 as part of a "good faith effort" to comply with the judge's order.

In his budget address, Christie, a potential 2016 presidential candidate, focused on a path forward.

"We are on the verge of providing evidence to our citizens once again that we can make government work for them," Christie said.

Christie's $33.8 billion budget proposal -- a 3.1 percent increase over this year -- includes a $1.3 billion payment into the pension system, described by Christie as the largest-ever payment.

Under the law signed by Christie during his first term, the payment was supposed to be more than $3 billion, Treasurer Andrew Sidamon-Eristoff told reporters.

Christie, who cut the current year's scheduled pension payment from $2.25 billion to $681 million to fill a revenue shortfall, argues that the state cannot afford the pension system's costs without further changes.

The proposed budget, which Christie said represented fiscal discipline, doesn't include any new revenue for the Transportation Trust Fund.

Sidamon-Eristoff told reporters that he expected the Transportation Department would issue about $600 million in authorized bonds to pay for road, bridge, and rail projects. But Democrats said the Legislature wouldn't approve such borrowing and are pressing for a comprehensive deal to replenish the fund.

All revenue from the state's 14.5-cent tax on gasoline already goes toward annual debt service.

Legislative leaders and Forward New Jersey say the state needs to dedicate about $2 billion in new revenue annually to maintain and improve its infrastructure.

Tom Bracken, president of the New Jersey Chamber of Commerce and chair of Forward New Jersey, said he was disappointed Christie didn't offer a transportation funding solution.

"Clearly, the Transportation Trust Fund crisis is the single most pressing issue facing New Jerseyans today," he said.

(c)2015 The Philadelphia Inquirer