New Jersey shouldn’t be forced to make a $2.25 billion payment into public workers’ pension funds because the portion of the 2011 state law that makes the contribution a contractual right isn’t constitutional, Gov. Chris Christie’s administration says.
In a 122-page court filing submitted Tuesday, in response to four lawsuits filed by unions objecting to the reduced $681 million contribution that’s in this year’s budget, Christie’s lawyers argue, in essence, that one of the key concessions the governor made to get Democrats on board with his signature legislative achievement isn’t legal.
Democrats such as Senate President Stephen Sweeney have said the portions of the 2011 pension reforms that made retirement-system contributions a contractual obligation and gave unions the right to sue if they weren’t made were an important provision they wanted in exchange for agreeing to increase workers’ contributions for pensions and health care.
In the court filing, Christie’s administration says three separate sections of the state constitution — the debt limitation clause, the approprations clause and a governor’s veto power — overrule the pension reform’s effort to mandate pension contributions as a contractual right.
The court filing says the final word about appropriations rests with a governor, not lawmakers or judges, unless the state’s voters approve of such a change in a November referendum. As such, the state asks a judge to dismiss the unions’ lawsuits.
“Plaintiffs ask New Jersey to keep a commitment that the state was constitutionally incapable of making. The constitution forbids the Legislature from placing an unwilling populace in an eternal fiscal stranglehold. The Legislature may not incur long-term financial obligations that create an enforceable right to an appropriation without first obtaining permission from the citizenry whose budgetary options, preferences and needs will thereafter be constrained.”
“The constitution protects all of the state’s citizens and not just special interest groups that seek satisfaction of their own wants at the expense of the common good.”
Pension benefits have been treated as a contractual right in New Jersey since 1997, when the Republican-controlled Legislature passed and Gov. Christie Whitman signed a law that said public workers’ right to receive a pension was non-forfeitable, meaning their pensions could not be reduced, after five years in the pension system.
The 2011 pension reforms say the state’s pension payment this year should amount to four-sevenths of the full amount recommended by actuaries. When income-tax collections were far short of expectations in April, Christie cut the payments for last fiscal year and this one. Unions sued. Last year’s cuts were upheld by Superior Court Judge Mary Jacobson, but this year’s cut remains subject to a legal challenge.
Below are a few other interesting passages from the court filing. ‘Chapter 78’ is a shorthand way of referring to the 2011 pension reforms; it was the 78th law signed by Christie in that year’s legislative session.
“To the extent that Chapter 78 seeks to create an enforceable right to an annual appropriation of a prescribed amount, the statute is void and unenforceable.”
“To the extent that it purports to create a binding, legally enforceable right to future appropriations, Chapter 78 runs afoul of the debt limitation clause. The ‘contractual’ right to annual appropriations was constitutionally infirm upon creation and therefore void; no contract exists for the court to enforce.”
“The Legislature’s failure to override the governor’s vetoes has resulted in the suspension of the pension funding provisions of Chapter 78 during this fiscal year.”