Pension Lawsuits Take Center Stage in New Jersey
On Tuesday, a Superior Court judge is scheduled to hear oral arguments in a lawsuit seeking to force Gov. Chris Christie to pay an additional $1.8 billion into the public employees' pension fund in the next fiscal year. Meanwhile, the state Supreme Court is expected to rule soon on a case that could force Christie to contribute and extra $1.6 billion into the system by midnight June 30.
"In 2011, we did reforms and we changed the pension system," said Assembly Speaker Vinnie Prieto (D-Secaucus). "Employees started paying more into the system. They actually then started paying for their health benefits and, in turn, over a seven year period, we were going to do a one-seventh payment every year to fully fund the pensions, to make up for all those years of non-payment."
In the current fiscal year, the state was supposed to contribute $2.25 billion, but the budget signed into law by Christie appropriated just $681 million. Last June, a judge ruled that Christie should have made the full payment, but did not have to because it was less than a week before the end of the fiscal year and the money didn't exist. That same judge will preside over Tuesday's case.
"Last year, the Legislature did send a balanced budget that included all our obligations and, in turn, it was vetoed by the governor. He decided to veto it," Prieto explained.
The governor vetoed the Democrat-sponsored budget because it included an income tax increase on millionaires. Last week, state Senate President Steve Sweeney (D-West Deptford) reintroduced the millionaire's tax hike legislation.
"No one likes to increase any tax, and it would not be necessary to do so if New Jersey did not rank near the bottom in economic, revenue and job growth under the Christie administration," said Sweeney in an emailed statement on May 7. "The new revenue will help the state meet its financial obligations and restore the fiscal stability that is needed to get the economy moving."
While Sweeney's measure is likely to pass both houses of the Legislature, it is just as likely to be vetoed again by the governor.
"I have vetoed four income tax increases passed by this body and make no mistake - I will veto any more income tax increases that come before me," said Christie in his State of the State address to a joint session of the legislature in January.
In court, the Christie administration argued that the pension payment law he signed is unconstitutional. Prieto felt that was incorrect. He and Sweeney filed an amicus brief to show the courts that they were in support of the unions.
"We have to be mindful that these are not numbers. These are people. These are lives. These are real human beings and now it is our obligation because they have been doing the right thing. They've been putting their money in," Prieto said.