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In late 2009, when Chris Christie was a candidate, he made this explicit, written, signed promise to tens of thousands of firefighters and police officers: “The notion that I would eliminate, change, or alter your pension is not only a lie, but could not be further from the truth. Your pension and benefits will be protected when I…
The letters from Christie to police and fire union members pledged that the pension agreement was a “sacred trust,” and assured them “nothing will change for the pensions of current firefighters, future firefighters or retirees in a Christie administration” and, “the claim that any harm would come to your pension when I’m elected governor is absolutely untrue. It is a 100 percent lie.” Christie went back on his written word just two short months into his term. While New Jersey citizens have come to expect candidates for public office to blur the truth line, we do not often get to see them do it in writing.

The ‘pension reform’ bills Christie signed into law at the end of March cut pension and health benefits for hundreds of thousands of New Jersey workers, including firefighters, police, probation officers, teachers, and state and local government workers. The governor and the Legislature used the state’s economic woes, and the fear they engender, as cover to bludgeon public workers, and their unions, and to cut benefits outside of the legal collective bargaining process. So much for a “sacred trust.”

The gaping hole in this year’s state budget was not made any smaller by axing public workers’ pension benefits, because the changes those bills make will not save the state a penny for decades, nor solve the staggering pension plan shortfall going forward. In June 2008, the pension fund’s market value was $78.6 billion, and the state estimated that it had a $34 billion shortfall. By June 2009, the fund nosedived to $62.9 billion, with Treasury estimates that it has $46 billion less than needed to meet obligations.

Where does the fault lay? Looking at the reforms the governor and Legislature raced to enact, you might believe that fault for the dramatic underfunding of the pension funds rests with so-called greedy public employees and their overly rich benefits. You would be wrong. Fault lies squarely with the governor’s office and with the Legislature, which over the past two decades unfairly refused to pay their portion of pension obligations, while workers each paid every penny of what they owed. A combination of no, or low, state contributions; market losses; and whimsical investment-return projections are the real culprits in this debacle.

To make things worse, as he cuts workers’ pension benefits, the governor refuses to pay any of the $3 billion the state owes the pension funds this year. In one of the most ludicrous statements of this debate, Christie, in his budget speech, said, “Our pension system must be reformed before we can, or should, fund a broken, out-of-control system.” The fund is broken and out of control precisely because it has not been funded. Continuing that failure clearly worsens the crisis.

Christie and legislators tout the pension reform legislation as an effort to ensure shared sacrifice by public workers. Yet, they have given up $800 million in revenue by letting a tax lapse on our state’s wealthiest citizens. Stoking jealousy, the governor and Legislature have shamefully lambasted hard-working people in an effort to incite public fury over their presumed benefits. In fact, the average public employee pension payout is about $23,000 a year after 25 years of service. Public employees’ secure retirement depends on the funds being solvent. They, and their unions, have bargained a wide array of concessionary reforms to secure that end.

At its heart, the promise of a pension is a contractual promise that should be inviolable. The governor and Legislature have breached that promise for political gain in the guise of fiscal austerity. Mohandas Gandhi said it best: “A breach of promise is a base surrender of truth.” 
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Carla Katz is of counsel with Fox and Fox LLP, in Livingston, and is the former president of the Communications Workers of America, Local 1034.

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