The Current State of the Interest Arbitration Process: A Fractured System

In accordance with a report issued by NJ.Com, more than 40 towns and counties filed petitions to compel compulsory interest arbitration in anticipation of the expiration of what is commonly referred to as the "2% cap" law. Today, April 1, 2014, a state law in effect since 2011 that caps interest arbitration awards at 2 percent, sunsets and renewal of the same appears to be unlikely. The State Senate and Assembly on Thursday sent Gov. Chris Christie a bill that would extend the cap until the end of 2017. The bill had slight modifications to the current law that is set to expire. However, Christie conditionally vetoed the bill, stating that it did not impose the necessary restraints on law enforcement unions to collectively bargain for wages and conditions of employment. The State Senate concurred with the Governor's recommendations, however, the Assembly has yet to address the veto. Based on the foregoing, various municipalities and counties filed for interest arbitration due to the fact that they believe it is unclear if the cap will apply to contracts that are under negotiation but have not yet gone into arbitration. Under the current law, the New Jersey Public Employment Relations Commission is mandated to appoint an Arbitrator the following business day that a petition to compel arbitration is received. However, at this point in time, there are approximately five (5) arbitrators that sit on the special panel that has been appointed to hear these highly complex legal and economic cases. Thus, it appears evident that it will be an impossibility for arbitrator appointments to be made in accordance with the mandate. As we have all known for the past three years, the system to address an impasse regarding public safety contracts is fractured and in need of an overhaul. However, now, State Government must recognize the problems with the current law as they most likely will not be able to comply with the very same rules and regulations that they have put into place.

Legislature To Vote On Extension Of Arbitration Cap for Police, Fire

As reported by northjersey.com, top Democratic lawmakers are rushing to extend the cap on police and firefighter pay raises that some say has helped keep property tax bills in check. But local officials say the bill expected to be voted on today in both the Assembly and State Senate includes too many loopholes to be effective. Since 2011, raises for local police and firefighters have been limited to 2 percent if contract disputes were settled, as many are, through the State's binding arbitration process. Statewide, the average property tax bill rose to a record $7,988 in 2013, but that rate of growth has slowed while this cap and another that limits overall increases in the local tax have been in place. The salary cap expires on Tuesday, a deadline written into the original law as a compromise between the Democrats who control the Legislature and Governor Christie, a Republican. Before the cap was in place, unions were often given raises of around 4.5 percent. That figure is now 1.9 percent after the cap, according to a recent report issued by a task force set up to study the cap's effectiveness. The unions that represent police officers and firefighters working for New Jersey municipalities and counties say the cap has been too restrictive and has taken too much bargaining power away from their members, who by law aren't allowed to go on strike. "The bill contains critical provisions that ensure that a collective bargaining unit can only be exposed to the arbitration cap law once," the New Jersey State Policemen's Association said in a statement. The Democrats' bill would extend the 2 percent cap until December 30, 2017. But it carries a key provision in the original bill that permitted governments to cap raises only once. The original bill, however, covered a period of just over three years, roughly the duration of most of the union contracts. The new bill would permit arbitrators to award raises of up to 3 percent annually if the unions agree to pay more for benefits or to cuts in the number of jobs. The measure would also change the process through which arbitrators are selected, and it would give the arbitrators themselves a pay raise. Democratic legislative leaders say their bill strikes the right balance between the concern of the taxpayers and the unions. Republicans, meanwhile, have their own bill to extend the cap permanently. Assemblyman Declan O'Scanlon said the cap on arbitration awards can't be lifted while the broader limit on property tax increases is still in place. The Policemen's Benevolent Association, meanwhile, said the key to the bill is not making the cap permanent. "The bill's rejecting a permanent cap and providing more financial room for consideration are important improvements," the organization said in its statement. Make sure to check this blog periodically to ascertain the updates on this bill and the Legislature's vote regarding the same.

Christie Retroactively Cuts Pension Payment

This is a very interesting article regarding how Governor Christie employed some "fuzzy math" to reduce the State's legally mandated pension payment. NJSPOTLIGHT

Renewal Of Two Percent Salary Cap Bills Move Through Senate And Assembly

As reported in the Newark Star Ledger, the New Jersey State Legislature is in the process of acting to renew the 2% Interest Arbitration Police and Fire Salary Cap. The State Assembly's budget committee voted to approve bill (A3067), sponsored by Assembly Speaker Vincent Prieto (D-Hudson), that would temporarily extend an annual salary cap on interest arbitration awards. The Senate's state government committee also approved its own version of the bill (S1869), sponsored by Senate President Stephen Sweeney (D-Gloucester). It is expected that the bills will move the Senate and Assembly Floors this week.

In 2010, as part of Governor Christie's self professed "tool kit" which was supposedly aimed at slowing the growth of property taxes, the Legislature enacted a 2% salary cap on interest arbitration awards. The current version of the law is set to expire on April 1, 2014. Under the proposed Assembly bill, the 2% salary cap would be extended until 2017. That's short of the permanent cap that Gov. Chris Christie and the state League of Municipalities have called for. But it is also against the wishes of police and fire unions, who had called for the cap to be scrapped altogether.It is our understanding that the Senate bill closely mirrors the Assembly version.

In a report issued last week, unsurprisingly, a state panel tasked with examining the law was split 4-4 on whether to renew the cap. The task force was made up of four police and fire union officials, three Christie administration officials and one Republican assemblyman.

In an interview, Prieto said the bill incorporates the task force's few unanimous recommendations: Increasing maximum pay of arbitrators from $7,500 to $10,000, giving arbitrators more time to make a decision, and giving the Public Employment Relations Commission more time to consider appeals of arbitration decisions. However, the bill will also includes some concessions to the unions, to include enlarging the cap to 3% in certain circumstances, while also allowing some unions to bargain for raises in wages without any restrictions at all.

As always, we will keep you updated as these two bills move through the Assembly and Senate.

OLS: Christie Cannot Invoke "State of Emergency" To Cut Pensions

As reported by njspotlight.com, despite his threat to take "extreme measures" to control rising pension costs, Governor Chris Christie does not have the power to declare a fiscal "state of emergency" to make unilateral changes to the pension system, nor does New Jersey have the ability, like Detroit, to declare bankruptcy to get out from under its pension obligations, according to state and national authorities. Christie warned during his annual State of the State address in January that the $600 million annual increase in state pension payments required through Fiscal Year 2018 as part of a seven-year ramp up to the actuarially required funding level was crowding out spending on education, transportation, and other policy priorities. The Governor grudgingly budgeted the $2.25 billion pension payment required for next year only after Senate President Stephen Sweeney threatened to shut down state government if he failed to do so. Following his budget message last month, Christie warned that he had "significant powers" to rework the pension system on his own. The not-so-veiled threat was aimed at the Democratic Legislature, suggesting that if it did not pass measures to further cut pension costs, presumably by requiring further concessions from the public employee unions, Christie would act on his own. But a review by the nonpartisan Office of Legislative Services concluded that the Governor's powers under the Disaster Control Act do not give him the authority to carry out his threat because no imminent fiscal emergency exists, according to a Senate Democratic memo and an OLS analysis obtained by NJ Spotlight. Further, Christie and other governors do not have the power to declare bankruptcy to get out from under contractual obligations for pensions and retiree health benefits, as Wall Street financiers have been privately urging for years, because states, as constitutional sovereigns with taxing authority, are not covered by bankruptcy laws, the National Governors Association and the National Conference of State Legislatures have concluded. Christie's threat aroused loud protests from the state's unions and sent legislators scurrying to the law books. 'With the governor threatening to unilaterally make changes to the pension system but not explaining how or what he intends to do, the Office of Legislative Services engaged in extensive discussions and review of state laws to determine any possible way the governor could act by Executive Order," according to a Senate Democratic memo issued by Sweeney and Executive Director Kevin Drennan on March 13 that was obtained by NJ Spotlight, along with an accompanying OLS report. "OLS's conclusion is that he does not have any power to unilaterally make any changes because the state's pension laws are all set by statute, including the reforms that continue to restore financial stability to the pension system," the memo continued. "The governor can't try to claim that the pension system's finances are in such dire straits to constitute an emergency because OLS believes that the pension system is not in any state of emergency," the memo said.

Union Showdown: Amato Rips DiVincenzo On Incremental Salary Issue

As reported by politickernj.com, Essex County Executive Joe DiVincenzo apparently doesn't have to worry about a Democratic Primary opponent, but that doesn't mean PBA Local 382 won't refrain from criticizing the controversial Democrat in the strongest possible terms. PBA Local 382 President Joe Amato is angry at DiVincenzo for praising corrections officers who work at the county jail and touting the jail's fiscal health, while refusing to pay what he said were agreed-upon contractual salary increments. The local President asked his entire 550 member local and their loved ones to personally contact the Executive, who last year personally endorsed Governor Chris Christie and other county officials. "To the executive, we are just numbers on a piece of paper that he thinks he can play with for his personal gain and opinion and I need our members to present a human face and a family unit to those numbers and our executive needs to be made to understand that these are people's lives he's playing with," Amato said. Late in 2013 the County and Local 382 entered into contract negotiations, according to Amato, who sent DiVincenzo written notice that he and his members were fully aware of the lean economic times and understood that the union's requests in the upcoming contract negotiations would include items that present "little or no cost to the County and only asked that what was in the contract already, be retained." In that communication, Amato said he also pointed to the jail's successes and the deserving officers who brought about those successes who Amato says are in the very least deserving and expect to retain what was already promised to them and agreed upon by all parties. Although he received no response to his communication, Amato was confident he made his point. "In those meetings and in any personal communication with the PBA or between PBA and County attorneys...no one from the County uttered a single word of its intent to arbitrarily break any prior agreements and withhold monies due to hundreds of correction officers and had the audacity to force the PBA to learn of this through jail/county rumor," Amato said. "The secretive and slanted way it was done flies in the face of even a shred of decency on the County's part and tramples on the very essence of what's supposed to be transparent and good faith negotiation practices." But the local President stopped short of claiming to be too surprised, reminding members in bulletins of DiVincenzo's past "self-centeredness and arrogance in past dealings with the PBA," calling the executive someone "who seems to have regard only for himself and his own political aspirations with little to no regard for employees who he praises one minute when it suits his political needs and then attacks those same employees when it suits his political needs." DiVincenzo issued a statement in response to Amato's criticism. "According to a recent PERC decision, it was determined that governments did not have to pay their employees increments if their union contracts had expired," DiVincenzo said. "Essex County is in a unique position because the contracts with all of our 26 unions ended in December 2013 and we are abiding with this PERC decision."

NJ.Com Editorial Calls for Renewal of the 2% Salary Cap--In Our Opinion, It Has To Go

 A recent editorial published on NJ.Com calls for Assembly Speaker, Vincent Prieto (D-Hudson County) to renew the two percent (2%) salary cap on interest arbitration awards for law enforcement officers and firefighters that is set to expire on April 1, 2014.

 
The editorial stated that the 2% cap had to be put in place due to the fact that "the unions used their political clout to rig the rules on negotiations. All they had to do was create a standoff in contract talks, and the dispute would be sent to an arbitrator, who would typically award salary increases in excess of inflation. Over time, that created this monster."
 
The editorial writer goes on to further state that Governor Christie, "In collaboration with Democratic leaders, changed those rules to give taxpayers a fighting chance. A key provision imposed a 2% cap on salary increases, intended to match the 2% cap on property tax increases.  It has worked exactly as planned. A special task force is reviewing the reform now, but there is no doubt it has resulted in lower salary increases. In the roughly three years after the reform took effect, the average increase in police salaries was just 1.86 percent, the smallest bump in two decades."
 
The editorial reports that Senate President Steve Sweeney (D-Gloucester) says renewal is a certainty.  However, mayors are more worried about the Assembly, where Democrats are more closely allied to the unions. 
 
Our point of view at the New Jersey Public Safety Officers Law Blog is different.  It can not be argued that the 2% cap on salary increases has  created an imbalance at the bargaining table in favor of management.  I make this statement based on first hand experience.  Now, government will not even consider bargaining for salary raises close to 2% as they know that there is no chance that the same could ever be awarded by an interest arbitrator.  Additionally, the 2% cap has been interpreted by PERC in such a way that it has forced Union Leadership to restructure salary guides where it now often takes law enforcement officers fifteen (15) to twenty (20) years to reach max salary.  It has also resulted in Union Leadership being forced to give up longevity payments and other forms of remuneration that they have fought hard to receive over the years.  
 
Finally, the salary cap coupled with the mandatory payments for healthcare, often equaling close to nine percent (9%) of an officers gross salary, result in law enforcement officers today making approximately ten percent (10%) less in salary because of the inability to bargain for a raise that can keep up with the increased cost of living and the legislatively mandated payments towards healthcare.  
 
Has it really worked?  The Governor and the legislature told us that the 2% cap would result in a reduction of property taxes.  Have your taxes gone down?  My property taxes haven't.  Based on the foregoing, the 2% cap has to go, and the sooner the better.
 

State Corrections Officers Loss of SLI Benefits Finally Attracts Media Attention

As reported in NJ.COM, the beating of State Corrections Officer Elegia Then by an inmate in New Jersey State Prison has finally attracted media attention to the fact that NJ State Corrections Officers no longer receive Sick Leave Injury Benefits (SLI) for injuries that occur during the course of duty.

 
SLI benefits previously allowed State Corrections Officers to receive their full pay for a period of one year following an injury that occurred on duty.  These benefits were eliminated by passage of law on July 1, 2011.
 
Then, who had been raising two boys by herself on a salary of $44,000 a year, isn’t getting a steady paycheck. She had been using leave time donated by other officers, and now she’ll be going on workers’ compensation, which pays 70 percent of her salary.
 
However, many municipal law enforcement officers and all state troopers receive full paid leave for injuries suffered on the job. In Edison, for example, police officers with a doctor’s note can be out as long as a year at full pay. If, after returning to work, the condition persists, the officer gets up to another year.
 
Yet correction and parole officers in New Jersey do not get any paid leave when injured on the job — not even in cases of assault — something that some lawmakers believe should change. Lance Lopez, president of the Policemen’s Benevolent Association Local 105, said about 300 corrections officers were assaulted in 2012 and about 240 in 2013, though most were not serious incidents.
 
A bill before the Legislature would require the state to keep paying corrections and juvenile detention officers who are physically injured in a riot or attack by inmates. It would also provide a compensation program for parole officers who are assaulted by parolees.
 
The measure would carry over the officers’ salaries until they begin receiving workers’ compensation payments, then cover the difference between those payments and an officer’s actual salary.
 
The bill (A2927/S491) is expected to be considered in the Assembly Law and Public Safety Committee this week, according to state Sen. Sandra Cunningham (D-Hudson), a sponsor in the Senate. An earlier version of the legislation was pending when the previous session ended in January.
 
Cunningham said she was surprised when some injured officers, whom she called “forgotten,” spoke to her about their situation.
 
“These are not people who make a great deal of money, and they’re sometimes in small areas in contact with (inmates),” Cunningham said. “I look at them as law enforcement people who play a vital role in society and have kind of been left out.”
 
But the bill does not address health insurance, which officers on workers’ compensation pay for on their own.
 
Unions can not negotiate for these greater benefits due to the fact that the law that eliminated SLI benefits preempts negotiations on the subject.  Under New Jersey Public Employment labor law, any subject that is governed by a state statute or administrative regulation is not negotiable.  Based on this fact, Lopez said it was made clear that the officers would have to lobby for new legislation.
 
“They can be out for a year with no issues, no complaints, no nothing,” he said. “We’re just not afforded that opportunity to be covered. I’m not looking for the state to compensate anyone who’s responding to slip and fall. We’re just basically saying, if this is the result of an inmate assault, we’re asking them to compensate these individuals.”
 
Then’s alleged attacker, Fuquan Alexander — a 29-year-old inmate serving a 30-year sentence for kidnapping and robbery — is now charged with first-degree attempted murder and aggravated assault. He was moved to Northern State Prison in Newark, apparently for his own protection.
 

NJ Inmate Indicted for Attempting To Beat Female Corrections Officer To Death

As reported on NJ.Com, a man serving a 30-year prison sentence for robbery and kidnapping now faces accusations he tried to beat a female corrections officer to death in February.
 
Fuquan Alexander, 29, was indicted last week by a Mercer County grand jury on charges of first-degree attempted murder and first-degree aggravated assault. 
 
Alexander was locked up at New Jersey State Prison in Trenton when, on Feb. 1, he allegedly attacked senior corrections officer Elegia Then, wounding her so severely she was hospitalized for weeks with brain damage and still has not been able to return to work.
 
Then said she was letting inmates out of their cells to shower that Saturday afternoon when she was attacked in the prison's 2 Right Housing Unit, according to Lance Lopez Sr., the president of Policemen's Benevolent Association Local 105.
 
Then's partner was working on another floor at the time of the assault, Lopez said. A preliminary investigation suggests it was another inmate who pressed the riot alarm and summoned other officers, he said.
 
Then was initially taken to Robert Wood Johnson University Hospital in Hamilton before being transferred to the hospital's New Brunswick location. She was treated for cuts to her cheek and eyebrow, bruises to her nose and right eye, and pain on her upper lip and the back of her head. She initially seemed okay, but her cognitive skills began to deteriorate as hours and days went on, Lopez said.
 
Alexander was transferred out of the prison after the attack, apparently to ensure his own safety, and is now housed at Northern State Prison in Newark, according to Department of Corrections records. He was convicted in 2010 on a slew of charges stemming from a February 2008 carjacking and kidnapping in Essex County.
 

Wieners Criticizes Christie On Pension Reform

As reported on nj.com, the head of the State's largest police union, The New Jersey State Policemen's Benevolent Association, publicly criticized Governor Chris Christie in a press release over $50 million in what he called "pension giveaways" to local municipalities. The giveaways, State Policemen's Benevolent Association head Anthony Wieners said were gained on the backs of the state's public sector unions. Wieners stated, "While the governor continues to campaign that the state pension system is 'unsustainable' and in need of reform, he himself is intentionally weakening the (Police and Firemen's Retirement System) by waiving an additional $50 million in local government's pension obligations. In doing so, he is continuing the same fiscal mismanagement and sleazy games that underfunded the pension fund for over a decade and that led to the situation we are in today." In an email sent following Wiener's press release, Christie spokesman Michael Drewniak pointed out that the Christie administration this year will pay the largest ever payment to the state pension fund at $2.25 billion, nearly equaling the total payment in the 10 years prior to Christie's 2009 election to office. Furthermore, Drewniak also pointed out that the total payments during Christie's four plus years in office have totaled $5.3 billion, more than double the $2.4 billion paid in the 10 years prior to Christie taking office. "Our goal has been to stabilize and preserve the public employee pension system," Drewniak said. "But the long-term, massive pension liability plainly threatens the very state and local budgets that support Mr. Wieners' union membership. That's a mathematical, actuarial certainty that he ignores at the peril of his members." In response to Drewniak, Wieners said since the passage of the pension reform bill nearly three years ago, the administration has offset the increased employee contributions with reductions on the local level contribution, in effect taking contributions from members of the system and handing them to local governments. "This giveaway to local governments disguised as property tax relief was generated from funds taken out of the pockets of retired and active law enforcement officers, who saw their pension contributions rise, their (cost of living increases) eliminated and their benefits cut," Wieners said. "The state PBA is sick of politicians who use our pensions as a slush fund and then complain that our benefits are no longer affordable."

Wieners Criticizes Christie On Pension Reform

As reported on nj.com, the head of the State's largest police union, The New Jersey State Policemen's Benevolent Association, publicly criticized Governor Chris Christie in a press release over $50 million in what he called "pension giveaways" to local municipalities. The giveaways, State Policemen's Benevolent Association head Anthony Wieners said were gained on the backs of the state's public sector unions. Wieners stated, "While the governor continues to campaign that the state pension system is 'unsustainable' and in need of reform, he himself is intentionally weakening the (Police and Firemen's Retirement System) by waiving an additional $50 million in local government's pension obligations. In doing so, he is continuing the same fiscal mismanagement and sleazy games that underfunded the pension fund for over a decade and that led to the situation we are in today." In an email sent following Wiener's press release, Christie spokesman Michael Drewniak pointed out that the Christie administration this year will pay the largest ever payment to the state pension fund at $2.25 billion, nearly equaling the total payment in the 10 years prior to Christie's 2009 election to office. Furthermore, Drewniak also pointed out that the total payments during Christie's four plus years in office have totaled $5.3 billion, more than double the $2.4 billion paid in the 10 years prior to Christie taking office. "Our goal has been to stabilize and preserve the public employee pension system," Drewniak said. "But the long-term, massive pension liability plainly threatens the very state and local budgets that support Mr. Wieners' union membership. That's a mathematical, actuarial certainty that he ignores at the peril of his members." In response to Drewniak, Wieners said since the passage of the pension reform bill nearly three years ago, the administration has offset the increased employee contributions with reductions on the local level contribution, in effect taking contributions from members of the system and handing them to local governments. "This giveaway to local governments disguised as property tax relief was generated from funds taken out of the pockets of retired and active law enforcement officers, who saw their pension contributions rise, their (cost of living increases) eliminated and their benefits cut," Wieners said. "The state PBA is sick of politicians who use our pensions as a slush fund and then complain that our benefits are no longer affordable."

NJ Law That Limits Local Police, Firefighter Raises In Contract Disputes Set To Expire

As reported by NorthJersey.com, the state law that for the last three years has capped the raises that local police officers and firefighters can get if they take contract disputes to interest arbitration will soon expire, and lawmakers have yet to propose a bill to extend what local officials say has been a key tool in the effort to keep property tax bills in check. Governor Christie signed the 2 percent cap on interest arbitration awards into law in late 2010 after Democratic legislative leaders inserted a provision allowing the rule to sunset after three years. Now the cap will expire on April 1 unless lawmakers take new action. At the same time, legislators have drafted a measure that would increase the salaries for Cabinet officials and judges and boost the budget for their own staffs' salaries, which haven't increased for several years. The salaries of police officers and firefighters account for much of a municipality's spending, and local officials warn that a failure to extend the arbitration cap could bring on cuts in services, since the broader two percent cap on local property taxes increases, also passed in 2010, remains in effect. "If you aren't going to have an arbitration cap, then you are going to force municipalities into making potentially draconian cuts in quality-of-life services," said Bill Dressel, executive director of the New Jersey State League of Municipalities. "There does not seem to be a willingness to do this by April 1," he said. Matt Watkins, the city manager in Clifton, said the cap was the most important cost-savings measure for local towns in places like Bergen and Passaic counties passed in the last 10 years. "It has helped a great deal," he said. Christie, in his State of the State address in January, stressed the need to extend the arbitration cap. Dressel said he fears that the cap extension could become a bargaining chip in lawmakers' upcoming battle with the Republican governor over the state budget this spring. In New Jersey, public employee labor unions and local officials go into binding arbitration if they can't agree on a contract. In such cases, an arbitrator is asked to consider each side's argument and come up with a fair decision. After the limits were enacted in 2010, the average raise awarded by arbitrators dropped to 1.6 percent in 2013 from 3.8 percent in 2009, according to the Public Employment Relations Commission. Not everyone is in favor of extending the cap in its current form, including some of the state's public employee unions. The 2 percent limit hinders the ability of unions and towns to enter into balanced negotiations said Dominick Marino, president of the Professional Firefighters Association of New Jersey. He said the cap has hurt his members, who often start their careers with low pay. The union recognizes the economy is sluggish and sacrifices are needed, Marino said, adding that at a minimum, changes how the cap is calculated should be considered. Currently, the math provides for very few exceptions to the 2 percent ceiling.

NJ State Police To Accept Applications For New Recruits

As reported by nj.com, the New Jersey State Police are hiring. The Division announced that applications for the 156th Class will be accepted from April 21 to May 5. At a minimum, candidates must be 21 years old and not reach their 35th birthday prior to their graduation from the training academy. Applicants must also be U.S. citizens and hold a current driver's license. For a list of all of the requirements and possible career paths, candidates can visit www.njtrooper.com. "We're looking for bright, energetic men and women who have demonstrated responsibility and character and are up to the challenge to be their best," acting State Attorney General John Hoffman said in a statement. The 156th Class is scheduled to being training in March 2015. Two preceding classes, the 154th and 155th, will train this year. The classes are intended to help replenish the ranks, which have been thinned during the past two years by a wave of retirements.

Christie Threatens To Take "Extreme Measures" to Overhaul Pension Fund

As reported on NJ.Com, Chris Christie urged Democrats in the state Legislature to work with him to overhaul the public workers’ retirement fund for a second time, or he would take “extreme measures” if they failed to cooperate.

“I’m ready work with the entire Legislature to come up with ideas to fix this, but if they’re unwilling to that do that, this is a problem we’re going to own,” Christie said during a town hall meeting in New Jersey, “I’m willing to take more extreme measures.”

Furthermore, expanding on this premonition, on his radio show on NJ 101.5 FM, Christie stated that he has “significant powers” through “executive action” to make changes to the pension system. The Governor declined to elaborate, however all Public employees throughout the State of New Jersey are well aware of the “executive actions” Christie is referring to as he removed the ability to collectively bargain for health care benefits through executive legislative action.

In his opening remarks, Christie repeated a line from the budget address that this year’s budget is smaller than the 2008 spending plan without pension, health care and debt service costs. The total spending plan — the largest in state history — is $34.4 billion and includes the full, legally required $2.25 billion pension payment.  We will continue to follow this issue and keep our readers posted as it develops.

Democrats Pledge to Fund Pension System

Today, February 25, 2014, Governor Chris Christie is set to propose a new state budget. In a press release yesterday, State Democrats warned the Governor that he shouldn't expect support for a proposed tax cut. State Senate President Stephen Sweeney (D-Gloucester) and Senate Budget Committee Chairman Paul Sarlo (D-Bergen) also repeated that the spending plan needs to include the full promised payment to the public employee pension system. As reported on nj.com, a recent report by financial analysts in the state Legislature showed there is an estimated $565 million shortfall in the current budget. Christie has sought tax cuts for several years, but when asked about it Monday, Sweeney was blunt: "You've got to be kidding me right now." Sweeney stressed again Monday he won't back a budget that does not include a full payment to the pension fund. "We're going to have this pension payment funded, or we won't pass a budget," he said. "We made a promise, and that's a promise I can't break." In 2011, Christie worked with Democrats to enact a major overhaul to the pension program, requiring both employee concessions and the state's commitment to increase payments every year. It's set to increase from $1.7 billion to $2.4 billion in the upcoming fiscal year. In his State of the State address last month, Christie said he and lawmakers "need to have the conversation now about further changes to our pension system and about adding further to our state's already burdened debt load." Sweeney responded by threatening to shut down the state government if the payment is not made. During his radio show earlier this month, Christie said he intends to make the payment and never meant to imply he wouldn't. He said other programs would be at risk "if we don't address the exploding costs of pension payments and debt service ...We will work with the actuaries to make the appropriate payment." Despite the recent statements made by the Governor, Sweeney said Monday he's concerned by Christie's use of the word "appropriate." It appears from yesterday's press release that the New Jersey Democrats are going to hold the Governor's feet to the fire to ensure that the payment needed to fully fund the pension system is made for the up and coming fiscal year. Despite the fact that it is a little too late, it is good to see the Democratic Party is again acting responsibly in an effort to ensure that the Public Employment Pension system for the State of New Jersey remains viable.