State won’t have to make full pension payment, top court says

Joshua Burd//June 9, 2015//

State won’t have to make full pension payment, top court says

Joshua Burd//June 9, 2015//

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The state Supreme Court has sided with Gov. Chris Christie’s administration in the battle over payments to New Jersey’s ailing pension system, ruling Tuesday the state doesn’t have to make the full contribution required by a sweeping reform law Christie signed in 2011.The high court did so by declaring the law unconstitutional, a ruling Christie sought despite championing the bipartisan reforms to the pension system, as the state has struggled to come up with the funds for the full payments in recent years. The decision reverses a Superior Court decision from February, which had sided with the public-sector labor unions who sued to have the state make the full payment.

Writing for a 5-2 majority, state Supreme Court Justice Jaynee LaVecchia noted the state’s “willing participation in Chapter 78’s enactment,” referring to the reform law. But she said the court agreed to hear the Christie administration’s appeal “to resolve the important questions raised by this apparent clash of constitutional provisions.”

“Although plaintiffs correctly assert that a promise was made by the legislative and executive branches when enacting Chapter 78, and morally their argument is unassailable, we conclude that Chapter 78 could not create the type of legally enforceable contract that plaintiffs argue, and the trial court found, is entitled to protection under the Contracts Clauses of either the state or federal Constitutions,” LaVecchia wrote.

“We therefore hold that the Legislature and governor were without authority to enact an enforceable and legally binding long-term financial agreement through this statute.”

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The ruling stems from Christie’s plan to cut $1.57 billion from pension funding in the fiscal year that ends June 30. Critics have blasted the administration for reneging on the promise of the 2011 reform law, which resulted from a bipartisan alliance with Democratic lawmakers.

Writing for the dissenting minority, Justice Barry Albin said, “Today’s outcome undoubtedly will dishearten public workers.”

“The majority holds that the solemn representations made to them by their government can be dishonored,” he wrote. “The executive branch proposed and signed into law Chapter 78, touted it publicly, and then — when the bill came due — successfully argued in court that the law was unconstitutional.”

But in a statement after the decision was released, Christie called it “an important victory not only for our taxpayers who simply cannot afford these unsustainably high costs, but for limited, constitutional government that recognizes the proper role of the executive and legislative branches of government.”

“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. “In light of today’s decision, I urge all interested parties to come back to the table and partner with me to finally solve this problem once and for all.”

The decision, meantime was blasted by labor leaders. In a prepared statement, CWA New Jersey Director Hetty Rosenstein said, “We hoped the court would uphold the basic tenet that the law is what it says it is.

“But the fact that they didn’t rule for us is merely another obstacle that we will overcome,” she said. “Gov. Christie broke his word, and whatever shred of credibility he had left when he refused to fund the pension.

“Our union will never permit the destruction of the pension system and, as such, the destruction of New Jersey’s economy. If it is unconstitutional to meet the pension obligation, perhaps we will have to change the constitution. But one thing I know is this: we will fight, and we will win.”


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