Pension Amendment Hangs in Balance as Gas Tax Deal Remains Elusive
TRENTON — Another day has come and gone without a vote in the Legislature on the gas tax – and with it soon could be this year’s chances for a constitutional amendment mandating pension contributions that within a few years would exceed $5 billion a year.
The Assembly has already voted to put it on the ballot. Senate President Stephen Sweeney is reluctant to post the constitutional amendment for a vote until knowing how big a tax cut he’ll have to accept to gain Republican backing for a 23-cent per gallon hike in the gas tax.
At this point, that’s still unclear. Next Monday, Aug. 8, is the deadline for the submission of proposed constitutional amendments to make this year’s ballot. Procedural requirements mean it should be acted upon a bit sooner than that – and Sweeney is willing to call a session Thursday, if he has a gas-tax deal.
So far, there’s still no deal.
“I want to get it done this year, but there’s always next year. But I’m not looking at next year. I want to get it done this year,” Sweeney said. “The point is to get it done. Listen, if we fail on the question, you know that gives the governor the ability not to put a penny in, if we fail on the question. We don’t want to fail.”
Sweeney is willing to cut around $900 million a year in taxes as part of a Transportation Trust Fund plan that would raise gas taxes around $1.2 billion a year. Christie favors a plan that would cut taxes around $1.9 billion a year, which Sweeney says is too much.
“I actually think the governor’s going to wait until after the presidential election to do something because he’s still auditioning for Donald Trump’s Cabinet and signing any kind of a tax increase or allowing being overridden on a tax increase won’t be popular in his party," Sweeney said. “He’s already come out in favor of a 23-cent tax. He just wants to break the government, really bust the government of whoever’s next.”
Christie spokesman Brian Murray said: "The governor remains committed to reaching an amicable solution with legislative leaders that puts people to work, funds infrastructure investment in roads, bridges and mass transit and represents tax fairness for all the people of New Jersey. The governor trusts that everyone involved is committed to the same goals."
There is a lot of pressure being applied by unions hungry for a pension vote. Hundreds of union members participated in a noon rally on the Statehouse steps Monday, demanding a vote on the pension amendment and refusing to allow the gas tax machinations to be an excuse for inaction. Some booed when the Senate session ended without the amendment being considered.
Union members from the AFL-CIO, the Communications Workers of America, the New Jersey Education Association and UNITE HERE Local 54, the casino workers’ union, took part in the rally.
“There’s been a coalition of unions, public sector unions, that have been fighting for this for a long time. They’ve invested a lot of time and all of our money,” said Charles Wowkanech, president of the New Jersey State AFL-CIO.
“I’m tired of the lies. I’m tired of the excuses. I am tired of the finger-pointing and blame,” said Wendell Steinhauer, the NJEA president. “We are here to make sure this problem gets solved once and for all, and we aren’t going to let anyone tell us to just keep waiting. Because waiting, waiting doesn’t fix the pension problem. The state has been waiting 20 years, and the problem has only gotten worse.”
Public workers are getting stiffed on compensation they were promised, said Hetty Rosenstein, the CWA’s New Jersey director. “After we worked, after we earned it, after we put our money in, they say, ‘Nah, we don’t want to pay it.’”
“The pension is at this point and has become a moral issue,” Rosenstein said. “And in this state, not paying the pension is a moral crisis.”
Assembly Speaker Vincent Prieto. D-Hudson, said he’s still working to get the needed votes in the Assembly to overcome a likely veto. Unable to muster the votes in June, Prieto struck a deal with the governor to cut the sales tax. Once that fell apart, he again reached a compromise with Sweeney.
“That’s why you see me today standing together with the Senate president, because a stalemate or no action is not acceptable,” Prieto said.
Prieto was among the lawmakers who spoke at the union rally on the Statehouse steps. He said the Transportation Trust Fund plan would help the economy grow and, in turn, help the state afford the increased pension payments that would be required by the constitution.
“I’ve heard you loud and clear,” Prieto said. “You’ve, each and every one of you, have made your payment, and we need to make sure the state of New Jersey does the same.”
“We have got to make sure that we have the money in our budget to pay that pension,” said Senate Majority Leader Loretta Weinberg, D-Bergen. “I have a commitment, I feel I made a commitment, and I’m fully prepared to do everything possible to keep that commitment.”
“This is a no-brainer,” said Sen. Patrick Diegnan Jr., D-Middlesex. “I won’t go on and on and on. You folks did what you were supposed to do. It is now time for the state of New Jersey to keep its promise. Clearly it should be on the ballot. You have my 100 percent support.”
“The pension bill has nothing to do with the Transportation Trust Fund. They are two different bills,” said Sen. Ronald Rice, D-Essex. “The pension bill is not spending money. It’s asking the taxpayers and the voters: Will they support your contractual and your commitments on pension from the state as well? And so I don’t see the problem.”
Sweeney took issue with such sentiments when asked how he’d respond to a demonstrator who said the Transportation Trust Fund and pension amendments aren’t related.
“If you can’t fund it, then how do you put something up that’s going to fail? See, I actually want to fund the pensions. I believe in pensions. And I actually believe that you position yourself to be successful, not just throw something risky,” Sweeney said. “You’ve got 800,000 people that depend on the pension system, and I’m not just willing to throw it up.”
Sweeney said the Senate voted 29-7 in 2011 for a constitutional amendment requiring pension contributions but that unions got the bill blocked in the Assembly.
“So ask that question, why they killed it,” Sweeney said. “I want to be successful. I want to win this. I care about these workers’ pensions. I do this for a living. And I’m not going to risk and just throw something out there if it’s not going to be successful.
“So that’s why TTF has everything to do with it, because it’s a major number,” Sweeney said. “The speaker and I are stretching it bigtime with tax cuts to try to get Republican votes. But I’m not going to risk a $2 billion – we don’t know where we’re going to wind up yet, so I need at least to know where I’m going to wind up.”