New Jersey’s top court sided with Gov. Chris Christie on Tuesday, giving him a major victory in a fight with public worker unions over pension funds and sparing a new state budget crisis.
The state Supreme Court overturned a lower-court judge’s order that told the Republican governor and the Democrat-controlled Legislature to work out a way to increase pension contributions for the current fiscal year, which ends June 30.
In a 5-2 ruling, the court said there wasn’t an enforceable contract to force the full payment, as unions had argued there was.
“That the State must get its financial house in order is plain,” Justice Jaynee LaVecchia wrote in the majority opinion. “The need is compelling in respect of the State’s ability to honor its compensation commitment to retired employees. But this Court cannot resolve that need in place of the political branches.
She noted that the state is obligated to pay individual retirees their pensions. That’s not in danger this year, but unions say the funds could start going insolvent within the next decade.
“The court’s position is clear, as is mine, it is time to move forward and work together to find a tangible, long-term solution to make our pension system and public employee health benefit costs affordable and sustainable for generations to come,” Christie said.
Christie’s budget proposal for the fiscal year 2016, which starts July 1, calls for a record $1.3 billion contribution. But even that amount is less than half the $3.1 billion called for in the 2011 deal.
The governor says he has a new plan to reduce health benefit costs and use the savings to stabilize pension funds — but over a longer time. Current workers would also have their defined benefit plans frozen and replaced with 401(k)-style plans.
Assemblyman Anthony Bucco, R-Randolph, said the ruling shows a clear separation of powers.
“I think this Supreme Court got it perfectly right as a matter of law,” he told 1010 WINS’ Rebecca Granet.
Declan O’Scanlon, the Republican budget officer in the Assembly, told WCBS 880’s Peter Haskell the pension system must be fixed. “It really does force the hand of union leaders to come to the table in good faith,” he said.
While the court fight over pensions is likely over — unless unions find a way to appeal to the U.S. Supreme Court — pensions are still a major political and fiscal issue in New Jersey.