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As reported by nj.com, public pension funds may have gotten a much-needed boost from Governor Chris Christie’s landmark overhaul last year, but reports released show the funds continue to be hampered by the State’s failure to make full payments into the plans. 

Christie and Democratic leaders joined together last year and shifted a greater share of the pension costs on to public workers and cut out cost-of-living increases for future and current retirees. The move helped drive the State’s nagging unfunded pension liability from $53.9 billion to $36.3 billion when they revised 2010 figures, the report shows. 

But the State’s pension hole grew by $5.5 billion by the end of the 2011 budget year, largely because Christie followed in the tradition of his predecessors and failed to make a pension payment, an annual actuarial report on the pension funds shows. Overall, the State has only 67 percent of the money it needs to meet its future pension obligation, and that figure is expected to worsen as the State phases in its full pension payment over the next seven years.

The State was supposed to pay about $3 billion into the pension fund this year, but will only be paying about $480 million. Next year, the State will only pay about $900 million of its $3 billion bill, records show.

By 2018, State taxpayers will begin paying more than $5 billion a year for pensions, roughly ten times higher than the partial payment being made in this year’s budget, according to administration estimates. The tab for local taxpayers will rise by about $600 million by 2020, estimates show.

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As reported by nj.com, the state wants to keep taking increasing pension and health benefits contributions from Superior Court judges and Supreme Court justices while it appeals a judge’s ruling that the hikes are unconstitutional. 

The state Attorney General’s Office filed a motion to postpone implementation of Superior Court Assignment Judge Linda Feinberg’s ruling blocking the higher pension and health benefit payments for the judges and justices, spokesman Paul Loriquet said.

The first increased contributions under Governor Chris Christie’s new plan were taken from the judges’ October 14 paychecks. Feinberg’s ruling would have stopped those hikes from being deducted from their future bi-weekly checks, but the state wants to continue with those higher collections during the appeals process.

Feinberg rules judges and justices are exempt from paying more because a provision in the state Constitution prohibits their salaries from being “diminished” during their terms. Feinberg did not agree with the state’s contention that increasing pension and health benefits contributions does not constitute a reduction in their pay, infuriating Christie, who denounced the ruling as “self-interested and outrageous.”

Christie called for a constitutional amendment to allow for a reduction of judges’ salaries, but Senate President Stephen Sweeney and Assembly Speaker Sheila Oliver sad they don’t support calling for a vote on it, preferring to see how it is handled in the courts.

Feinberg has been criticized for ruling on a case that affects her, but case law allows judges to hear cases that directly affect them when there is no other appropriate court to address the matter. She has not set a date yet to hear the motion.

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As reported by nj.com, Senate President Stephen Sweeney and Assembly Speaker Sheila Oliver have no plans to post a constitutional amendment ensuring judges are subject to increases in pension and benefit payments proposed by Governor Chris Christie. “I am not inclined to support pursuing a constitutional amendment,” Oliver said. “It sets a very unhealthy precedent.”

Christie’s call for an amendment to the state Constitution stems from a decision issued by Superior Court Judge Linda Feinberg, who wrote requiring judges to pay more for pension and benefits is an indirect reduction in salary. The state Constitution prohibits pay cuts for judges and justices. The amendment would define justices and judges’ salary as exclusively salary, not encompassing pension and benefit payments.

Without support from Sweeney and Oliver, both of whom spearheaded the changes for public workers in June, Christie’s proposal is dead in the water. While Oliver said she is not inclined to post the amendment under any circumstances, Sweeney said he will re-evaluate based on the decisions of the higher courts. “Changing the Constitution based on one decision may not be warranted,” Sweeney said in a statement. “After the appeals process has been completed, the legislature will then determine the appropriate reaction, if any.”

In a press conference, Christie personally attacked Feinberg and called the decision “self-interested,” “outrageous” and “extraordinary hubris.” “Judge Feinberg’s decision yesterday, in addition to being legally indefensible, is morally indefensible,” Christie said. “If the courts will not fix this problem, then the Legislature has to give the people the opportunity to fix this problem.”

Christie said he will send language for a constitutional amendment to legislative leaders by the end of this week. He wants the Legislature to act in the lame-duck session after the November election, so the measure appears on the November 2012 ballot when voter turnout is highest.

To be on the ballot, a constitutional amendment must be approved by three-fifths of each house in the Legislature, 24 senators, and 48 assemblymen. Or, it can be approved by a majority of legislators in two consecutive legislative years. Once on the ballot, a simple majority of voters must approve the amendment.

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As reported by nj.com, Superior Court judges and Supreme Court justices, protected by the state Constitution from salary reductions while in office, are exempt from Governor Chris Christie’s new pension and health benefits plan requiring them to contribute a larger share of their salary, a judge ruled yesterday. 

Christie immediately lashed out at the ruling handed down by Superior Court Assignment Judge Linda Feinberg and indicated the state would appeal. “This outrageous, self-serving decision, where a judge is protecting her own pocketbook and those of her colleagues, is why the public has grown to have such little faith in the objectivity of the judiciary,” the governor said in statement issued by his office.

In reaching her decision, Feinberg concluded that the increased contributions Christie is requiring of judges and almost 700,000 current and retired state employees is an indirect reduction in pay that the Constitution specifically forbids for judges and justices. Feinberg also rejected the State’s contention that the increase is similar to a tax and is not discriminatory because it applies to all state employees.”

Superior Court Judge Paul DePascale of Hudson County filed the lawsuit challenging the measure in July after Christie signed legislation on June 28 increasing judges’ pension contributions from 3 percent to 12 percent of their annual salaries and requiring them to pay 35 percent of their health care premiums.

State law allows judges to hear cases that directly affect them when there is no other appropriate court to address the matter. The case did not go to U.S. District Court because it does not involve any federal allegations.

It is not the first time Christie has tangled with the courts, though this time he is seeking redress from the very body he has had sharp words for. He has repeatedly said the state Supreme Court justices have overstepped their bounds by influencing policy and budget decisions best left to the governor and the Legislature.

In making her ruling, Feinberg said the salaries cannot be touched, even in difficult economic times, and noted the provision is in the Constitution to protect judges from potentially vindictive acts of the executive and legislative branches of government.

Two weeks ago a group of state employees tried to tie their own legal challenge to the changes in pensions and benefits to DePascale’s case, but Feinberg ruled the two were not closely enough related to consolidate them.

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As reported by nj.com, the Christie administration touted big savings for local governments because of pension reforms as state employees and a judge tussled over lawsuits challenging new requirements for them to pay more their benefits.

The controversial public benefits overhaul, signed by Governor Chris Christie in June, shifts a greater share of the costs onto public workers. Yesterday, the Governor’s office said local governments across New Jersey will save $267 million in pension costs, according to figures provided by the state’s Treasury Department. Supporters said the move was necessary to help save the cash-strapped pension system for future retirees and to help ease the burden on local governments. The calculation takes into account the amount local public employees pay into the fund, but does not include judges’ pensions. The largest savings, about $220 million, comes from increased contributions to the police and firefighters’ pension fund.

The benefits reforms are being challenged in court. Yesterday, a state Superior Court judge ruled a group of state employees cannot have their suit considered jointly with a judge who claims the additional contributions are unconstitutional. Assignment Judge Linda Feinberg in Trenton said the cases, one brought by Superior Court Judge Paul DePascale and another filed by seven state workers, are not similar enough to combine into one legal challenge.

After deciding against consolidating the cases, Feinberg heard arguments on whether she should block the implementation of the contribution increases for judges and justices. The new law was enacted June 28 but the pay deductions take effect October 14.

In adopting the new law, the state Legislature did not change the statute that sets judges’ salaries, Assistant Attorney General Robert Loughy said. Their salaries remain intact, but their salary deductions to pay for the benefits are increasing, he said. “If you have a mandatory pension program and that’s coming out of your salary, it’s a diminution of salary,” Feinberg challenged Loughy. “It’s a deduction from salary,” he countered.

Until now, any increases to health benefits or pension contributions for judges have been accompanied by pay increases, argued DePascale’s attorney. Judges contribute 1.5 percent of their salaries toward their health care benefits. The new law requires them to pay 35 percent of the premium cost. DePascale, who earns $165,000, has said that would more than double his contribution to $5,230.86. He also said added pension contributions would, after a phase in, increase his biweekly deductions from $126.44 to $687.59.

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As reported by nj.com, a group of state employees challenging the constitutionality of New Jersey’s new law covering pension and health benefits wants to combine their lawsuit to the one brought by a Superior Court judge. The employees said the lawsuit filed by Judge Paul DePacale was similar to the one filed on their behalf and that the two should be consolidated in challenging the pension and health benefits law that went into effect June 28.

However, lawyers for DePascale and those identified as Defendants insist the cases are not closely enough related to warrant consolidation and are asking Superior Court Judge Linda Feinberg to keep them separate. Feinberg, the assignment judge in Mercer County, is expected to issue a ruling on the request on October 5.

DePascale, the first to file suit over the state’s new pension and health benefits package, contends the changes are unconstitutional because they run counter to the state Constitution, which prohibits the salaries of Supreme Court justices and Superior Court judges from being “diminished” while in office. The new law, enacted June 28 but which will largely take effect October 14, phases in the pension contributions of judges from 3 percent to 7 percent of their annual salaries over seven years.

Judges current contribute 1.5 percent of their salaries toward health care benefits. The new law requires them to pay 35 percent of the premium cost. DePascale has said that would more than double his contribution toward health benefits to $5,230.86.

For the employees, the contributions are structured differently than those of judges. Contributions are on a sliding scale based on salary. In a seven count complaint, the employees contend the new law violates the State Constitution by denying their right to organize and present grievances through their unions. In addition, they contend the legislation unfairly creates classes of employees by requiring them to contribute different amounts for the same health benefits. They also claim the law creates an unconstitutional tax on their base salaries.

DePascale’s lawyer says the cases are only “tangentially” related and opposes the consolidation. In court papers, DePascale asserts the state Constitution addresses the salaries of judges and justices, but not other judicial employees. Attorneys for the Senate and Assembly said consolidation would be unfair because DePascale has not identified them as defendants in his lawsuit. Finally, attorneys for the State, the Treasury Department, and the State Treasurer said the cases should not be consolidated because they are seeking to dismiss DePascale’s suit, but have not taken that action against the others.

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As reported by nj.com, leaked audio from Governor Chris Christie’s closed-door speech to conservative donors in Colorado gives new details on the heated final days in the battle to cut public employee benefits. In particular, Christie said Assembly Speaker Sheila Oliver personally asked him for Republican support to stay in power if dissident Democrats tried to oust her to stop the cuts. The Christie delivered, asking surprised members of his own party to cross the aisle and back Oliver if there was a coup attempt.

A coup never materialized, and public employee benefits were cut in June, one of the signature accomplishments of Christie’s administration so far. But, the episode raised questions about whether Oliver will have enough support to stay on as speaker after two-year term ends in January.

A transcript of the audio was posted online by a reporter from the magazine Mother Jones. The recording was made during an event hosted by the Koch brothers, two wealthy conservatives, on June 26, three days after the Assembly approved benefit cuts and two days before Christie signed the bill. The governor did not disclose that he left the state to attend the event.

Christie confirmed the account during an unrelated press conference in Atlantic City yesterday. Oliver, however, said in no uncertain terms that the conversation with Christie never happened. “Governor Christie is making an assertion that I called him and asked him for his help in retaining my speakership? Governor Christie is more mentally deranged than some of us though. Never happened,” she said.

Christie said Oliver told him: “I want to post the bill but I think when I go on the floor, my own party’s going to take a run at me to remove me as speaker. So I can’t post the bill.” Then she added, according to Christie: “I think the only way I survive is if the 33 Republicans in the chamber will agree to vote for me for speaker. Can you work it out?”

The governor then went to talk to Republican Assembly members, who were in a closed-door caucus meeting. Christie said he told them: “Probably for the only time in my governorship I’m going to actually ask you to vote for a Democrat…So if they take a run at her on the floor, I need all of you to vote for her for speaker.”

Christie said Republicans were surprised, but the governor insisted keeping Oliver in power was necessary to get the bill passed. “Are you with me or aren’t you?” Christie recalled asking. “All 33 of them raised their hands and said they were with me.”

Christie said he went back to his office and called Oliver. “You just got 33 new votes,” he said he told her. Oliver responded, “Well, you just got yourself a bill.” The bill passed the Assembly on June 23.

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As reported by nj.com, dozens of unions and public workers filed suit against the newly enacted pension and health benefit overhaul in federal court yesterday. The 58-page, 17-count suit charges the state violated the state and federal constitutions by suspending cost of living adjustments for at least 30 years, failing to make full payments into the pension system for the last decade, and handing administration of the systems to committees. The suit, whose plaintiffs include the NJEA, the CWA, and all the major public safety unions, charges that the law is a “violation of substantive and procedural due process rights.”  

“This lawsuit is about basic fairness and justice. Governor Christie and the Legislature passed a law which illegally takes away benefits that school employees and other have already earned through their service to the people of New Jersey,” said NJEA President Barbara Keshishian. “Perhaps most troubling is that this legislation amounts to a classic ‘bait and switch’ for current retirees. These are people who worked their entire careers believing in the promise that their pension benefits would be honored. They’ve already retired, and are living on a fixed income. Now they’re being told that the state is reneging on its promise.”

The law, pushed through the Legislature with the help of Democratic legislative leaders and signed by Governor Chris Christie on June 28, seeks to cut costs because the pension and health benefit systems are underfunded by a combined $120 billion. Unions fiercely protested against the bill, saying it prevented them from collectively bargaining their medical benefits, which will be set by a panel of union members and state managers.

All public workers-including police officers, firefighters, and teachers-will pay more for their pensions and health benefits. It would suspend cost-of-living increases to pensions for retirees and raise the retirement age for new workers.

Employees have “non-forfeitable rights” to cost-of-living adjustments, says the suit, which includes eight retirees as plaintiffs. “While employed and when they retired, these Class Plaintiffs fully expected and relied upon the promise that they would receive the promised required COLAs every year,” it reads.

It also says the state’s underfunding of the pension system violates workers’ contractual rights, and that forcing workers with fewer than 20 years of service to pay more for health benefits “violates the promises made to, and the contractual property rights of, active public employees with less than 20 years of credited service.”

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As reported by nj.com, a Superior Court judge challenging the increased payments judges must make under newly-enacted changes to public worker health and pension benefit plans will not be allowed to have his case directly sent to the New Jersey Supreme Court. In a two-paragraph order issued yesterday, Supreme Court Justice Virginia Long said the state’s highest court will not relax the rules of court to allow Judge Paul DePascale to skip the trial and appellate levels.

DePascale, who sits in Hudson County, filed a complaint last month calling the health and benefit law enacted July 1 unconstitutional for judges, saying it cuts their salaries and threatens their judicial independence. The suit is the first legal challenge to the health and benefit law. Other state public employee unions are also vowing to sue. Assignment Judge Linda Feinberg in Mercer County is scheduled to hear the matter on September 16.

Depending on the course of action, the case could take years to move through the courts, including the Appellate Division. DePascale’s attorney said the Supreme Court has the discretion to hear a matter on an expedited basis. In her order, Justice Long said DePascale can ask the Supreme Court again to take up the case after Feinberg finishes with it.

The new law, to be phased in over seven years, will make judges’ pension contributions go from 3 percent to 12 percent of their annual salaries. DePascale’s pension deductions would jump by $14,849 by 2017, he said in court filings. In court papers, DePascale also said his health benefits contribution would more than double to $5,230.86. The increased financial contributions begin October 4.

Judicial salaries, set by law, range from $165,000 for Superior Court trial judges, including DePascale, to $192,795 for Supreme Court Chief Justice Stuart Rabner.

Governor Chris Christie has said judges traditionally have paid the least amount of money into their pension program yet they receive some of the highest payouts. Case law allows judges in New Jersey to hear cases that affect them when there is no other court that has jurisdiction over the matter. The case has not gone to federal court because DePascale’s allegations involve the state-not federal-constitution.

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As reported by nj.com, two of the most prominent Democrats in the state legislature-both labor leaders-lost the support of a major union coalition Thursday, spelling possible trouble for their November reelection fights. The statewide AFL-CIO, representing 30 unions of public and private-industry members, voted in the annual endorsement conference not to support Senate President Stephen Sweeney and Sen. Donald Norcross. Losing endorsement means those legislators would not likely receive campaign funds direct from AFL-CIO’s political fund and any campaign help from coordinated labor volunteers.

The move was seen as a success by public-sector unions, led by Communications Workers of America and AFSCME, who moved to pull support from legislators who voted against union interests in a recent fight over public pensions and benefits. With Sweeney as prime sponsor, Governor Christie signed a combined pensions and benefits bill on June 28. The bill only passed the Legislature after Democrats, 8 senators and 14 assembly members, sided with Republicans. Public workers now must pay more toward health care and pensions, and lost the right to collectively bargain health care terms until 2014. All Democrats who voted to support the bill were denied support Thursday, as was John Amodeo, a Republican Assemblyman and crane operator.

However, Thursday’s decision caused a split with private-sector union members, whose benefits were not affected by the legislation and who fought to lock endorsements for Democratic legislators who work in construction trades. Sweeney, a member of Ironworkers Local 399, and Norcross, member of a electricians’ union and outgoing head of the Southern-New Jersey Central Labor Council, are two of six current legislators who have risen through the ranks of building trades unions to political careers in the state legislature.

Rae Roeder, head of CWA Local 1033, urged the approximately 1,000 delegates to vote against the Senate President. Swiveling to look around the room to lock eyes with Sweeney, Roeder said, “I’m turning round to look at the person who stabbed us in the back.”

Hetty Rosenstein, CWA area director, said she preferred to view the day’s vote as a positive endorsement of every lawmaker who voted against the pensions and health changes. “It shows it makes a difference to us, what they do,” she said. “Collective bargaining is a red line.”

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As reported by nj.com, New Jersey’s public worker pension and health benefits increases should be revoked for state judges because they unconstitutionally slash their salaries and undermine judicial independence, a state Superior Court judge claims in a lawsuit filed Thursday.

The complaint, filed by Superior Court Judge Paul DePascale, who sits in Hudson County, is the first legal challenge to the landmark health and benefits law enacted last month. State public employee unions angered by the changes are also vowing to go to court. 

The complaint says the law runs counter to the part of the state constitution that says the salaries of the Supreme Court justices and Superior Court judges “shall not be diminished during their term of appointment.” “It diminishes the salary of all justices and judges appointed before the enactment of the subject legislation during their term of appointment and, by doing so, unconstitutionally and adversely (affects) the public and the independence of the judiciary,” DePascale’s attorney wrote.

Set by law, judicial salaries range from $165,000 for Superior Court trial judges, including DePascale, to $192,795 for Supreme Court Chief Justice Stuart Rabner. New Jersey now has 430 judges. DePascale, however, said in his court filing that his deductions will increase “steadily and dramatically” over the next seven years. His pension deductions would be hiked $14,849 by 2017, when he would be paying $18,137 into the pension system. DePascale also said his health benefits contribution would more than double to $5,230.86, based on state estimates that would allow different levels of coverage.   

The new law, to be phased in over seven years, will make judges’ pension contributions go from 3 to 12 percent of their annual salaries. The same law will boost the contributions of members of the Public Employee Retirement System from 5.5 percent of their salaries to 7.5 percent over that same period.

An initial hearing before Mercer County Assignment Judge Linda Feinberg is set for September 16. Pension changes took effect July 1. However, actual deductions start October 14, along with health contribution hikes.

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As reported by mycentraljersey.com, New Jersey’s new pension reform will save state and local governments millions of dollars now and billions of dollars over the ensuing decades. But then there is the hard part: actually paying the pension contributions for nearly 800,000 state government employees and retirees. Although New Jersey will have to pay less than it would have to without the changes, the state revenues still will have to grow by at least 3 percent a year simply to cover the added costs for increasing payments, a New Jersey Press Media analysis shows.   

Even if state revenues rise by 5 percent a year, state pension contributions still will consume nearly half of that extra revenue. That will put pressure on available funds for aid to schools, worker salaries and a host of social and other programs. Keith Brainard, research director for the National Association of State Retirement Administrators, said New Jersey’s big mistake was abandoning annual required contributions into the pension system in the late 1990s. “Once the money is gone, the revenue stream must be recreated,” he said. “They’ve taken a big step with the reforms, but ultimately they will have to find the money to make the contribution.”

State pension contributions must ramp up to $5 billion a year by fiscal year 2018, even under the new reforms. This year’s $468 million bill will double to $1 billion by next July. Because the state had largely missed its pension payments for more than a decade, the so-called unfunded liability for long-term state workers pensions had grown to $37.1 billion last year, along with a $16.7 billion liability for local government pensions. The annual contribution to meet that bill grew too. 

If the state were to pay all it should into the pension system this fiscal year, which began July 1, it would have to pay $3.3 billion. That’s an impossibly large number that would require widespread layoffs, aid cuts, and tax increases to meet. New Jersey did, however, pass a state law that requires it to pay one-seventh of what it needs this year, and increase that until it reaches the full amount in seven years. So in fiscal year 2016, only four years hence, that means the state will pay $3.4 billion into its pension funds. As if that were not enough, Governor Chris Christie’s proposed transportation infrastructure plan calls for the state to use $605 million in the state budget that year.

If state revenues grow by 5 percent a year, about average in normal times of economic expansion, then those two items alone will take up more than half of expected increase. Should tax revenues slip to 3 percent annually, pension contributions and transportation funding alone would soak up all new revenue. That would leave little or nothing for worker salary increases, aid to schools and municipalities and a host of social programs.

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As reported by nj.com, Governor Chris Christie signed into law controversial legislation that will force public employees to pay more for their pension and health insurance. Christie, who signed the bill flanked by a bipartisan cast of mayors, said passage of the bill is his biggest legislative victory since taking office.

“It is an important moment for the State of New Jersey, for its citizens, its taxpayers and New Jersey has once again become a model for America,” Christie said at the bill signing. 

Starting on Friday, public employees across all levels of government will pay an additional percent of their pay into the pension system. Employees will begin to pay more for their health insurance when their contracts expire. For those without contracts or with contracts that have already expired, the increased payments could begin as soon as January, when new health insurance plans are expected to be completed.

The legislation took a bumpy road to passage. Christie and Senate President Stephen Sweeney began working on the proposal last fall. They faced strong pushback from the public employee unions, who argued that health benefits should be decided at the bargaining table, not through legislation. But the unions were unable to stop the bill.

Assembly Speaker Sheila Oliver got on board with the legislation earlier this month. Republican lawmakers joined a coalition of Democrats, mostly those with ties to South Jersey political boss George Norcross and Essex County Executive Joe DiVincenzo, to provide enough support to pass the bill last week.

A last-minute change to remove the most controversial provision of the bill, which would have limited access to out-of-state hospitals, was done through a separate bill, which Christie also signed.

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As reported by nj.com, a contentious bill raising pension and health benefits costs for more than half-million New Jersey government workers goes back to the state Senate one more time on Monday for a formality vote.

A provision in the main bill allowing health plans that restrict out-of-state care will be removed. The provision was seen as a plum to South Jersey political boss George Norcross III, who oversees Cooper University Hospital in Camden, minutes away from Philadelphia. It caused an uproar among public-sector union leaders, who vehemently oppose the entire piece of benefits legislation, and threatened to upend Republican support.

The main bill requires teachers, police, and other public workers to pay part of their health care premiums based on income. Their pension contributions will also rise. Proponents say higher worker contributions are necessary to shore up the underfunded retirement systems, which are shy of their eventual liabilities by $110 billion. Opponents say the pension system is underfunded mostly because the state has repeatedly skipped its annual payments. They say health insurance changes should be negotiated at the bargaining table, not legislated.

Governor Chris Christie is expected to quickly sign the legislation. The governor has already taken victory laps over the weekend, suggesting on national television that Washington could learn from New Jersey’s example when it comes to bipartisan cooperation and curbing spending by passing additional benefits costs onto public workers. 

The bill was fast-tracked through the Legislature after Christie struck a deal with Democrats and Republicans who lead the Senate and Assembly. However, it got through without the support of a majority of Democrats in either house. Debate among Assembly Democrats was especially divisive. That house approved the employee benefits bill and the supplemental measure late Thursday, after several hours behind closed doors. In the midst of that debate, Senate President Stephen Sweeney and Assembly Speaker Sheila Oliver announced that the restriction on out-of-state care would be abandoned.

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As reported by nj.com, New Jersey lawmakers voted to enact a sweeping plan to cut public worker benefits after a long day of high-pitched political drama in the streets of Trenton and behind closed doors. Union members chanted outside the Statehouse and in the Assembly balcony, and dissident Democrats tried to stall with amendments and technicalities. Although they successfully convinced top lawmakers to remove a controversial provision restricting public workers’ access to out-of-state medical care, they failed to halt a historic defeat for New Jersey’s powerful unions and a political victory for Republican Governor Chris Christie.   

More than 8,500 protesters, the most this year, poured into Trenton this morning with signs, speeches and their trademark inflatable rat. But most had dispersed by the time Democrats emerged from their hours-long caucus meetings where they debated the bill’s details and a separate budget proposal. The Assembly convened for a vote at about 6:15 p.m., more than five hours late, and lawmakers delivered speech after speech on the bill for nearly three hours.

Christie and Republicans banded together with Senate President Stephen Sweeney and Assembly Speaker Sheila Oliver to advance the bill despite opposition from the majority of Democrats who control the Legislature. The bill passed the Assembly 46-32 and will be sent to Christie’s desk for his signature. Fourteen Democrats voted for the bill, while 32 opposed it. After the vote, protesters in the balcony shouted “Shame on you!”

Unions have blasted the bill for ending their ability to collectively bargain their medical benefits. Health care plans for 500,000 public workers would be set by a new state panel comprised of union workers and state managers, rather than at the negotiating table. A sunset provision would allow unions to resume collective bargaining after increased health care contributions are phased in over four years. In addition, police officers, firefighters, teachers and rank-and-file public workers would all pay more for their pensions and health benefits.

Supporters of the bill say the state needs to cut costs because the pension and health systems are underfunded by more than $120 billion total. The Christie administration estimated the bill would save $3 billion in health benefits over the next 10 years and $120 billion in pension costs over 30 years. Much of the pension savings are from the controversial elimination of the cost-of-living adjustments for retirees, which unions have threatened to challenge in court. 

The union protest, like other recent demonstrations, did nothing to stop the bill. But, it did highlight the growing fissures in the state Democratic Party. While Sweeney and Oliver were pushing the bill, the chairman of the state party, Assemblyman John Wisniewski was rallying protesters with two-dozen other Democrats.

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As reported by nj.com, New Jersey’s battle over benefits could hit a fever pitch today. Thousands of public workers are expected to stage what leaders vow will be their biggest Statehouse protest yet over a controversial bill to force them to pay more for health insurance and pensions. The bill is up for final passage in the Assembly, which would send it to Governor Chris Christie, who is expected to sign it swiftly.

Leading up to today’s battle, a state workers union chapter filed a federal suit against the state saying its contract was broken because pension payments were skipped. Christie pitched the plan where he was booed by some teachers. At a town hall in Fair Lawn, Christie said the measure, a focal point of his agenda, is needed to restore the state’s fiscal balance and ensure the solvency of the pension fund. “We have support with both political parties to do this,” he said. “It isn’t like other states.”

With the passage in the Assembly seeming almost inevitable, one union began what could be the first of several court battles. Local 1033 of the Communications Workers of America filed a lawsuit in federal court claiming the state failed to meet its contractual obligations when it did not contribute to the pension system. Rae Roeder, president of the local 1033, the only CWA chapter that has all its members in the same pension fund, said the members of the union voted to move forward with the lawsuit. The union is also alleging the legislation, which would eliminate cost of living adjustments for retirees, violates federal contract law. The suit asks that full payments be made into the pension fund.

The unions yesterday continued their war of words with Senate President Stephen Sweeney. Hetty Rosenstein, state director for the CWA, contested comments Sweeney made earlier this week that negotiations over the bill fell apart when the union demanded that the content of the health plans be included in the legislation. Sweeney has said the unions were trying to subvert collective bargaining, a charge unions have made against he and Christie.

Rosenstein said the proposal sent to them by Sweeney included no details and was not in writing, putting them in a tough spot to sign on. “This is not anything that any union could accept or that we could do in any fairness to our members,” Rosenstein said. “Somehow we’re supposed to say ‘yes’ to that.”

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As reported by nj.com, fierce opposition could not stop the Senate from passing a contentious measure Monday that will sharply raise the cost of health benefits and pensions for the state’s 500,000 public employees. With protesters dressed in Revolutionary-era garb gathered outside the Statehouse and union members clamoring inside, the pivotal Senate vote came on the same day the Assembly Budget Committee approved by a 7-5 vote an identical version following eight hours of testimony.  

After days of protest from Democrats, Republicans and union members, a last-minute provision inserted by Senate President Stephen Sweeney limiting public employees’ access to out-of-state hospitals was weakened hours before lawmakers met Monday. The changes agreed to by Sweeney, shortly before the Senate approved the measure 24-15, would allow public workers to receive out-of-state care at a higher cost if a doctor decides the treatment is not available in New Jersey.

The Senate vote earlier in the day was a major legislative victory for Sweeney and Governor Chris Christie, who along with others hammered out the agreement over the last two months even as they sparred over other issues. The bill increases pension costs up to two percent of workers’ salaries for all public employees, while at least doubling, and in many cases tripling, their health care contributions. It also raises the retirement age from 62 to 65, eliminates cost-of-living adjustments and creates a board to formulate a menu of health plans, including low-cost, high-deductible options.

The Assembly is scheduled to vote on the bill Thursday, when it is expected to pass, just as in the Senate, despite little Democratic support. The changes are expected to save $10 million next year, far less than the $300 million the Christie administration had expected.

The Senate legislation (S2937) passed with the support of a handful of Democrats. One Democrat after another took the floor to condemn the bill, saying it curtailed the right to collectively bargain, drawing applause and cheers from the gallery. Senate Majority Leader Barbara Buono said undermining the collective bargaining process “erodes out identity as a nation.” “Today is all about politics,” she said. The bill was a result of “back-room deals” instead of open debate. It restricts competition, she said, “an affront to free-market principles.”  

Sweeney’s defenders were primarily Republicans, including state Sen. Joseph Kyrillos, a close friend of the governor. He called it a “historic day,” and praised Sweeney’s leadership.

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As reported by nj.com, about 200 public employees marched across the Delaware River this morning in protest of cuts to their benefits. Later, protesters attempting to get into the Statehouse were pushed back by State Police troopers.

Led by Revolutionary War re-enactors, the workers carried signs and chanted as they crossed the Calhoun Street bridge from Morrisville, Pennsylvania to Trenton. The protest, organized by the New Jersey Education Association teachers union, was designed to replicate Washington’s crossing before the Battle of Trenton. The group marched to the Statehouse where they met up with another group that began at the War Memorial. Much smaller than a similar rally last week at the capitol, the protesters waved American flags and “Don’t Tread on Me” flags.

About 11:00 a.m., the crowd turned toward the Statehouse Annex, looked up to the fourth floor where the bill is being debated, and began chanting “We’ll be back, we’ll be back.” Nine state troopers blocked the main entrance to the complex and were no longer admitting the public.

Minutes later, with speakers booming, whistles singing, and noise-makers clapping, the crowd danced to ‘We’re Not Gonna Take It,” a popular 1984 hit by Twisted Sister. The rally then marched toward the doors of the Statehouse.

At the rally, New Jersey Education Association President Barbara Keshishian equated state workers’ opposition to the pension and health benefit bill rapidly moving through the Legislature today with the Battle of Trenton during the American Revolution, which gave a much-needed morale boost to the Continental Army against the British.

Keshishian called today’s protests near the Statehouse, which were attended by about 1,000 union members, “The Second Battle of Trenton.” “We are here today to do the very same thing, ladies and gentlemen. We have taken some blows in recent months. We look at Trenton and see it occupied by hostile forces. By people who put the interests of the wealthy ahead of the needs of the people,” she said. “I will not sugarcoat this, the situation looks bleak. Once again, the odds look long. But like Washington’s soldiers in 1776, we are determined to fight, and we are determined to win,” said Keshishian.

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As reported by app.com, more union protests are planned at the New Jersey Statehouse for Monday as the debate over public employee benefits rages on. A bill requiring sharply higher pension and health care contributions from 500,000 public employees will be voted on in the Senate on Monday, the same day the contentious bill gets its first public hearing in the Assembly.

“This is the defining moment for the labor movement in our generation,” AFL-CIO President Charles Wowkanech worte in an email to enlist support for Monday’s rally, the latest of several recent Capitol protests. “Only through your presence in Trenton on Monday will we make the difference.” Wowkanech was among 25 union members who were arrested after disrupting a Senate hearing on the bill last Thursday. They were issued disorderly persons summonses and released.

Democrats who lead the Senate have aligned with Republican Governor Chris Christie and GOP legislative leaders to support a bill that charges employees more to help shore up the underfunded retirement systems. A new tiered system will require teachers, police and firefighters and other public workers to pay a portion of their health insurance premiums based on income. Pension contributions will also rise by 1 percent immediately, and by an additional percent or more after a seven-year phase in. Public sector unions are vehemently opposed, in part because the bill limits collective bargaining over health care. Many Democrats agree.   

A provision to allow collective bargaining over health care to resume after four years did little to quell objections. A call to split the bill into two, one for pensions, which has wide support, and one for health care, has so far been refused by Senate President Stephen Sweeney. Christie also has said he would not support separate measures. The employee benefits bill has enough votes to pass in both the Senate and the Assembly as is, even though a majority of Democrats in both houses do not support it.

A fight also looms Monday about a provision deep inside the bill to limit public workers’ access to out-of-state medical care. The proposal restricts use of out-of-state doctors and hospitals unless similar care is not available in New Jersey. There are some exceptions, like emergency care, and employees would have to be offered a plan allowed unrestricted access to out-of-state care. That option would cost more.

Opponents of the provision say it’s imperative that all workers and their families have access to the same level of medical benefits. Proponents of the measure say the state’s doctors and hospitals are as good as any and the state should encourage their use.

The state teachers union says Sweeney’s friend and mentor, southern New Jersey Democratic powerbroker George Norcross, would benefit from the provision. Norcross, who heads Cooper Health System and Cooper University Hospital, denied the allegation.

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As reported by nj.com, irate public employees converged on the Statehouse by the thousands Thursday touting horns, carrying signs, and disrupting a Senate hearing, but the show of force failed to break a legislative agreement overhauling their state health and pension benefits. Union members gathered at the Statehouse steps and clogged a Senate hearing room in an effort to thwart the progress of a bipartisan bill that was worked out Wednesday night between Democrats and Republicans.

There was even an inflatable rat outside the Statehouse annex with a sign on its chest that said, “Pension betrayal.” At one point the police led more than two dozen union workers from the hearing and charged them with disorderly conduct after they locked arms and began shouting “kill the bill” and “workers rights are human rights.”

As the raucous crowd cheered on union leaders and disgruntled Democrats, the Senate Budget and Appropriations Committee absorbed a litany of blistering criticism of the bill and the legislators who support it. The measure, if approved, will force the state’s 500,000 public workers to assume a much larger share of the costs for health care and pension benefits. The labor leaders testified that health benefits should be negotiated, not legislated, and urged the panel to split the measure into separate bills. For four hours, union leaders pleaded in vain with Democratic legislators to vote against the measure, which was approved by a 9-4 vote.

Governor Chris Christie praised the measure Thursday at the annual conference of the New Jersey Association of Counties meeting in Atlantic City. “New Jersey is setting a model for dealing with these problems in an honest, forthright and bipartisan way,” he boasted.

The bill shifts more of the costs of health and pension benefits onto public workers in the form of increased contributions, while also freezing cost of living adjustments for retirees and raising the retirement age. Christie, who helped shape the bill, has said he hoped to save $300 million from health benefit reform, but a state treasury official testified that the bill would only save $10 million. Christie and lawmakers have until June 30 to fill the gap and approve his $29.6 billion budget for the next fiscal year.

The 9-4 vote, which included support from four Democrats, set up a vote by the full Senate on Monday, the same day the Assembly Budget Committee will hold its hearing. If approved, the full Assembly will vote on Thursday. While Democrats control both chambers, a majority of them oppose the bill, so Senate President Stephen Sweeney and Assembly Speaker Sheila Oliver, who accepted the deal much more reluctantly, are relying on Republicans to pass the bill.

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As reported by nj.com, rank-and-file Democrats are lining up to take the microphone at a steadily growing union rally outside the Statehouse today, vowing to cast no votes on a bill that would overhaul pension and benefits for teachers, cops, firefighters, and others.

Assemblymen Wayne DeAngelo, Daniel Benson, Patrick Diegnan, Reed Gusciora, Vincent Prieto, and state Sen. Ray Lesniak blasted the bill and said the changes being proposed should be negotiated, not legislated. “There’s a lot of sheep inside, and the lions are out here fighting,” Gusciora said as legislators inside the Statehouse took up the bill, designed by Senate President Stephen Sweeney, at a Senate budget committee hearing. Lesniak said he will introduce legislation reviving a millionaires’ tax, which would raise the marginal tax rate for people earning more than $1 million, on Monday.

Representatives from the largest state unions-the CWA, the NJEA, AFSCME and police and firefighter groups-are also planning to denounce the bill from the podium.  “Do not think you can sell us out in June and buy us back in November,” warned Barbara Keshishian, the NJEA president. “I am mad as hell about politicians who were elected by the people but sell their votes to the powerful.” 

Union workers in the audience were fired up, booing loudly, and sounding disapproving notes on a tuba at mentions of Sweeney, Assembly Speaker Sheila Oliver, and Governor Chris Christie.

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As reported by nj.com, despite a rising chorus of opposition from fellow Democrats, the Senate President and Assembly Speaker pressed forward Tuesday to overhaul health and pension benefits for the state’s 500,000 public employees. After trying for a week to line up Democratic support for the measure with little success, Assembly Speaker Sheila Oliver announced that she had scheduled a hearing on the controversial plan on Monday.

Oliver’s decision came on the same day that Senate President Stephen Sweeney introduced his 120-page bill, which is scheduled for a hearing before the budget committee on Thursday. It shifts more of the costs of pension and health benefits onto public workers in the form of increased contributions, along with eliminating cost of living adjustments for retirees and pushing back the retirement age. Nearly all of the state’s public workers would see their health insurance costs at least double and in many instances triple.  

As momentum has built for the plan among Senate leaders eager for an agreement, so has union opposition. Labor leaders are urging members to rally at the Statehouse on Thursday to block what they see as a crucial blow to the collective bargaining rights in the state.

Unlike Sweeney, who is relying largely on Republicans, Oliver has said she will not move the bill without “significant” support of her party. Tuesday she said she wanted to use the committee hearing to touch off an earnest debate.

So far Governor Chris Christie, despite working with Sweeney on the measure, has not publicly endorsed it. Union members and lawmakers have not expressed their opposition to the portion of the bill concerning pensions, and several lawmakers want the pension and health changes put in separate bills.

Currently, the average public employee earns about $60,000 a year and pays 1.5 percent of that salary, or $900 a year, for health benefits. Under the Sweeney bill, the same employee could pay $2,056 annually for single coverage and $3,230 annually for a family plan. Employees with the lowest incomes would pay about 2 percent of their salaries for health benefits, while those who earn $110,000 would kick in 6 percent of their salaries.

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As reported by nj.com, the state’s top lawmakers said Monday they cleared a significant hurdle in efforts to overhaul public employee benefits after agreeing to a plan that shifts more medical costs onto workers while protecting future collective bargaining rights.

The spotlight now turns to Governor Chris Christie, who has been uncharacteristically quiet as Assembly Speaker Sheila Oliver and Senate President Stephen Sweeney hammer out the final details of a controversial bill overhauling pension and health benefits that is scheduled for its first legislative hearing on Thursday. 

Sweeney endorsed a plan Monday being promoted by Oliver that would increase health benefits contributions for all of the state’s 500,000 public workers but allow unions to seek lower rates at the negotiating table starting in 2014. “The sunset provision is certainly fair and is another example of the kinds of compromise we have been able to achieve with this legislation,” Sweeney said in a written statement.

A spokesman for Christie, Michael Drewniak, said the governor had no comment on the sunset provision or the broader proposal. Christie has spent the last 18 months as governor making his case for overhauling what he has contended are overly lavish pension and health benefits for the state’s public employees, often resorting to blunt criticism of them, their union leaders and Democratic lawmakers.

Sweeney and Christie recently agreed on a plan that shifts more of the costs of pensions and health benefits to public workers in the form of increased contributions, along with pushing back the retirement age and freezing cost-of-living adjustments for retirees. Leaders of the state’s public unions have mounted a fierce opposition to the proposal, urging members to reach out to legislators, lobbying in the halls of the Statehouse and issuing blistering news releases questioning lawmakers’ commitment to collective bargaining.

Sweeny has decided to bring the bill to the Senate floor despite lack of support from Democrats, and will rely on Republicans to approve the measure. Facing similar opposition, Oliver has said she will not move the bill without “significant” support from Assembly Democrats, and it’s unclear whether the sunset provision has resulted in enough support to overcome that self-imposed threshold.

The sunset provision may attract lawmakers who were on the fence, but it will probably do little to persuade staunch supporters of collective bargaining, like Assemblywoman Bonnie Watson Coleman, whose district includes many state employees. “Any legislative attempt to erode the rights of public workers is a mistake,” said Watson Coleman.

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As reported by nj.com, Senate President Stephen Sweeney said today he plans to introduce legislation to increase health and pension benefits payments for public workers and that the Budget and Appropriation Committee will hold a hearing on it next week.

Sweeney and Governor Chris Christie have reached an agreement on the measure, but Assembly Speaker Sheila Oliver has not signed onto it. Under the proposal, police and firefighters would pay an additional 1.5 percent of their salaries toward their pensions, and non-uniform public workers would immediately pay an additional 1 percent and eventually reach an additional 2 percent, for a total of 7.5 percent of their salaries.

Workers would also pay more for their health benefits on a sliding scale, with higher income workers paying up to 30 percent of their premiums and the lowest-income workers paying 3 percent. 

In recent interviews, several Assembly members called for the measures to be split into separate bills, one dealing with pensions and the other with health benefits. “Of course they want to do the pension bill, you know, that’s what the unions want,” Sweeney said. “They want their pensions fixed, but they don’t want to have to deal with the health care component. You know who needs the health care component. The taxpayers.” Sweeney also said, “This is not about being unfair to the unions, it’s about being unfair to the taxpayers.”

Assemblyman Jack McKeon said he supports splitting the bills because lawmakers have traditionally dealt with pension issues in the past, while unions negotiated health benefits. “The concept of combining these is foreign,” he said. Asked about Sweeney’s comments, McKeon responded, “We don’t need two bullies.”

A short time later, Oliver issued a written statement that said she was “committed to getting it done.” She added, however, “My caucus had legitimate questions after seeing the details of this concept for the first time. Working through these concerns is reasonable and appropriate. Reforming the public worker pension and health insurance system at all levels of government to bring relief to taxpayers while respecting worker rights is my priority.”

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As reported by nj.com, Governor Chris Christie and Senate President Stephen Sweeney were poised to announce an agreement on a plan to overhaul health and pension benefits for public employees, but were stymied after the compromise received a chilly reception in the Assembly. “We are not there yet,” said Speaker Sheila Oliver, who found herself wedged between two of the state’s most powerful politicians.

Word of the agreement also drew quick opposition from public labor unions across the state, who said it represented an attack on collective bargaining rights by taking away their ability to negotiate health benefits. 

The plan would require the state’s 500,000 public employees to contribute more money for their pensions and health benefits than they currently do and freezing cost-of-living adjustments for retirees until the pension funds stabilize. The overhaul, which lawmakers have agonized over since Christie took office a year and a half ago, would address two of the most costly issues facing the state.

New Jersey has promised $66.7 billion in medical benefits to current and future retirees, the highest tag among the 50 states, but has not set aside a single penny to pay for it. At the same time, the state has about 66 percent of the assets needed to meet its future pension obligations, ranking it among the worst funded in the nation. 

Oliver outlined the plan to caucus members in a closed-door meeting, where many told her that while changes in the pension plan were needed, they agreed with union leaders that the health benefits should be negotiated and not legislated. More than a dozen union leaders stood outside the room where the Assembly Democrats had gathered, hoping the members of lower chamber would provide a bulwark against the part of the package that addresses health benefits.

Facing a similar lack of support, Sweeney has lined up a small group of Democratic senators who have agreed to join with Republicans to make sure there are enough votes to pass the overhaul, which will be wrapped up in one bill. In a written statement, Sweeney said the plan would save taxpayers $120 billion over an unspecified period of time, while protecting the pensions and health benefits of low- to middle-income workers. Notably, the statement did not include any details about the plan, such as how it would save taxpayers $120 billion.

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As reported by nj.com, public workers would pay more for their pension and health benefits under a deal struck between Governor Chris Christie and Senate President Stephen Sweeney. Under the deal, most public workers would immediately pay an additional 1 percent of their salaries for their pensions, while police and firefighters would pay an additional 1.5 percent. The State would pledge to increase its pension contributions to legally required levels.

Workers would pay up to 30 percent of their health care premiums after a four-year period. But, unlike Governor Christie’s original proposal, the payments would be tiered based on income, so employees with lower salaries pay less.

CWA New Jersey Director Hetty Rosenstein declined to discuss the specifics of the proposal, but said she’s opposed to legislation that “undermines collective bargaining.” “This proposal attacks collective bargaining. It’s absolutely unaffordable. And it does not one thing-there’s no indication that it does anything to address the high cost of health care,” she said. 

Public unions want health benefits to be decided through collective bargaining, not legislation. “We feel there is an avenue in the Assembly where we can protect our collective bargaining rights,” said Dominick Marino, president of the Professional Firefighters Association of New Jersey.  

Assemblywoman Joan Quigley said there is vocal opposition to health benefits legislation inside her caucus. “The Assembly is really just learning for the first time of the deal. There are millions of questions, and right now I don’t think there’s a consensus either way,” she said.

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As reported by nj.com, state workers have begun wearing red arm bands to voice their opposition to proposals that would slash their health benefits. The arm bands are being distributed by the Communications Workers of America, the largest public employee union in New Jersey that represents most of the state’s professional rank and file staff.

The signs read, “CWA Local 1033 Workers, Fighting for Health Care Plus Retirement $ecurity.” The bands are attached with an elastic strip and were spotted on workers in Trenton dressed in business attire.

Hetty Rosenstein, CWA state director, said the arm bands are intended to raise awareness about the proposals. “The armbands are a powerful reminder of what this fight is really about: basic rights for the hardworking men and women who serve New Jersey,” Rosenstein said in a statement. “Governor Christie is trying to take away what every working person deserves—health care they can afford and the ability to retire after a lifetime of work.”

Christie has proposed making state employees pay 30 percent of the cost of health care premiums, a change that would be achieved through legislation. Currently, state workers pay 1.5 percent of their salary toward health benefits.

Christie spokesman Michael Drewniak said the arm bands demonstrate a “disconnect.” “What’s bemusing is that their arm bands say they are fighting for retirement security and lifetime health care benefits,” Drewniak said in a statement. “So are we, because if serious reforms are not instituted, there will be no pension system and dwindling health benefits at best. The CWA’s disconnect and denial with these mathematical certainties is always puzzling.”

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As reported by nj.com, with Senate President Stephen Sweeney set to rely on Republican votes to overhaul public employee benefits, the fate of the controversial plan may depend on whether Assembly Speaker Sheila Oliver follows his lead. 

Assembly Democrats met in private and few embraced the Senate President’s plan of combining sweeping changes to public employee pensions and medical benefits into one bill, according to three sources who attended the meeting. The meeting was not called to discuss the issue, but it was raised by members who later voiced opposition about combining both measures into one bill and legislating medical benefits, according to the sources, who requested anonymity because they are not authorized to speak about caucuses.

Oliver has not said what she plans to do. She said in a statement: “The Assembly continues to be increasingly frustrated by the governor’s failure to show leadership and do what he’s supposed to do-negotiate a contract that both protects taxpayers and worker rights.” The lack of Democratic support means Oliver would have to decide whether to move the legislation without the majority support of her party, a political gamble that would come as members prepare for fall elections.

“It would be a historic precedent that needs to be weighed carefully,” said Assemblyman Gary Schaer, who opposes the medical benefit proposals because he says they do nothing to control costs. Assemblyman John Wisniewski doesn’t believe the two proposals can be combined into one bill because the state Constitution requires legislation to have a single purpose. Like others, he said medical benefits should be dealt with at the negotiating table.  Assemblyman Tom Giblin said Democrats should be unified on this issue. “We have always stood up for the working man, and I think we should continue to do that,” he said.

Facing similar odds, Sweeney has lined up a small group of Democratic senators who said they would be willing to join with Republicans to help ensure there is enough votes to pass the bill, according to four sources familiar with the plan. Sweeney is prepared to move the bill for a vote before Memorial Day. Sweeney and Gov. Chris Christie are still negotiating the shape of the final bill, and sources were not briefed on the details being discussed.  

If Sweeney and Oliver move forward without the majority support of their party, they are putting themselves and members at political risk, says Brigid Harrison, a political scientist at Montclair State University. While unions don’t have the political clout they once enjoyed, Christie’s rhetoric combined with labor battles in Wisconsin and Ohio have awakened members who will be mobilized this fall, Harrison said. “Christie has energized a flabby, sleeping giant,” she said.

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As reported by nj.com, despite slim Democratic support, state Senate President Stephen Sweeney is prepared to move forward with a plan to overhaul public employee pensions and health benefits before the end of next month. Sweeney has lined up a small group of Democratic senators who said they would be willing to join with Republicans to help ensure there are enough votes to enact sweeping changes to public employee benefits.

The move signals that ongoing negotiations between Sweeney and Gov. Chris Christie over the shape of the changes are progressing. The sources, who requested anonymity because they are not authorized to discuss the negotiations, said lawmakers have not been told of specific details, but Sweeney assured Democrats the plan would require workers to contribute more to health benefits and would take their salaries into account.

Sweeney spokesman Chris Donnelly declined to comment on what steps Sweeny has taken or will take to enact the changes, but expressed confidence a bill would pass the Senate. “Reform is coming and the Senate president will have more than enough votes to get it done,” Donnelly said.

The momentum is likely to anger public employee unions and even some Democrats, who argue that employee medical benefits should be decided at the bargaining table, not through legislation. Hetty Rosenstein, regional director for the state’s largest public employee union, called a move to vote on changes to medical benefits “disgusting.” “For Democrats to support a bill that eliminates collective bargaining around health care…that’s hugely problematic for Democrats and wrong,” Rosenstein said. “We expect the Democratic Party to stand up for collective bargaining.”

Sweeney and Christie have found common ground on changes to public employee medical benefits, but less on the issue of pensions. Sweeney introduced a bill that would increase employee medical benefit contributions over seven years and set a sliding scale of 12 to 30 percent of premiums, based on salary. Christie wants to phase increases over three years and have all employees pay 30 percent of their premiums. He also wants to increase the eligibility requirements for post-employment health care.

Both said pension reform is necessary to restore fiscal health to a pension system that was underfunded by $54 billion as of the latest actuarial account.

Christie wants to increase the retirement age to 65 for many employees, require all public employees to contribute 8.5 percent of their salaries into the pension system, and eliminate cost-of-living increases for all current and future retirees. Sweeney has also proposed a series of pension revisions that include creating a board that would have management over the system’s investments and determine employee contribution rates based upon an annual actuarial analysis.

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As reported by nj.com, New Jersey’s price tag for public-worker retirement health benefits is higher than any state in the nation, according to a study to be released by the Pew Center on the States. New Jersey has promised $66.7 billion in medical benefits to future and current retirees, but has not set aside a single penny to pay for it, according to the study, which looked at 2009 financial data from all states.

New Jersey’s unfunded liability, the gap between what is owed and what has been saved, is higher than the nation’s most populated states of California ($66.5 billion), New York ($56.2 billion), and Texas ($53.8 billion). In fact, New Jersey’s unfunded liability accounts for 11 percent of the combined $604 billion accrued by all 50 states, the study shows.

With no money set aside, New Jersey is operating without a safety net and its annual medical costs will continue to rise even more as baby boomers retire. “The question is whether these costs are sustainable,” said Kil Huh, director of research at the Pew Center. “The more you pay, the less you’ll have for other services, such as education and health.” In order to better control retiree health costs, states should treat them like pensions, tucking away money each year to pay for future costs, said Huh. The money can then be invested and will eventually lower annual costs. As of 2009, 19 states have set aside no funds for future medical costs, while the others have mostly tucked away a small fraction of what they owe retirees, according to the study.     

Governor Chris Christie and Senate President Stephen Sweeney are working on changes to the public employee medical system that would push some of the costs to current workers and future retirees in the form of increased contributions. However, neither have proposed establishing a pension-style fund.

With enough in the bank to cover 66 percent of what’s owed in benefits, New Jersey’s pension system is also among the most poorly funded in the nation, according to the study. Based on the percentage funding, New Jersey has the 12^th poorest pension plan in the country. Many states, including New Jersey, have skipped or reduced pension contributions so they could divert money to other areas. Overall, states were supposed to contribute $115 billion to their pensions, but only kicked up $73 billion in 2009.

The study looked at the effect of the Great Recession on retirement benefits and covers the latest data available from the 50 states on pension, health care, and other benefits promised to current and future retirees. The gap between the promises states have made for public employees’ retirement benefits and the money they have set aside grew to at least $1.2 trillion in fiscal 2009, resulting in a 26 percent increase in one year.

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As reported by nj.com, last year, cities and towns across New Jersey were forced to lay off thousands of employees to cope with budget woes, while momentum for benefit reform in Trenton pushed a record number of public workers into retirement. In theory, the exodus of employees was supposed to make municipalities leaner and provide some financial relief. Instead, some of New Jersey’s most cash-strapped cities had to pay millions to departing employees for their unused sick and vacation time, even as they struggled to provide basic services. The largest checks to departing workers exceeded $200,000.

For some cities and towns, the total payouts were so big that they had to take out loans to make them. The examination of records, as well as interviews with union and local officials, show cities are encountering a perfect storm: The Christie administration’s push for public workers to pay more for pensions and health care prompted many to retire early just as the bad economy and state aid cuts forced layoffs. Cities and towns with no money to spare were then hit with having to make big payouts for accumulated time that was promised years ago.    

The Star-Ledger reviewed eight municipalities that either borrowed to make their payments under a new law that allows this, or experienced high-profile layoffs last year: Newark, Atlantic City, Camden, Jersey City, Trenton, South Brunswick, East Orange and Hackensack. In total, these municipalities paid more than $39 million last year to more than 700 employees who cashed in their unused sick and vacation time, about $54,000 per employee. At the same time, they laid off about 460 employees, mostly police and firefighters, records show. The State does not have records for every town, but officials say they believe this pattern was repeated across New Jersey.

Jim Ryan, spokesman for the State Police Benevolent Association, said cities that previously benefited when employees skipped vacations to work contributed to the problem because they failed to first calculate the cost of the payouts in the rush to lay off police and push veterans to retire. The result, he says, is that departments are dangerously depleted. “The majority of our members are on the front lines and don’t benefit,” said Ryan. “It’s the administrators getting the big paychecks and leaving our members behind in depleted departments and without proper backup.”

Across New Jersey, 20,237 public employees retired last year, an almost 65 percent increase from the 12,270 who retired in 2009 and the highest number in a decade. Union leaders say fear of public-employee benefit reforms was a major reason workers headed for the exits.

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As reported by app.com, the Freehold Township Police Department has new sign at its front window: “Due to staffing issues, this window may be closed throughout the day. If this is an emergency, use the red telephone.” It’s literally a sign of the times, as police departments throughout New Jersey continue to cope with the ongoing consequences of a deep recession and budget cuts.

The problem is that officers who retire are not being replaced, often because municipalities do not have the money to hire more police. So, for police chiefs or department directors, the challenge is maintaining adequate levels of protection. But, the financial belt-tightening has visibly translated into divisions being merged, administrative bureaus being closed and officers being reassigned from desk jobs back to patrolling the streets. In some instances, specialized police units are being depleted in order to ensure that enough officers are on the streets and available to respond to emergencies.

What is clear is that the ranks of New Jersey police are growing thinner. The State overall has seen a loss of 3,400 officers since January 1, 2010, according to State Policemen’s Benevolent Association representative James Ryan. Much of that is due to attrition, he said. Officers who qualify for retirement choose to leave, rather than deal with the ongoing conflict in Trenton over pensions and benefits for public employees.

Depending on the size of a particular municipality, the impact of the retirements can translate into a sizable chunk of the police force going away. In Freehold Township, for instance, seven officers have retired during the past 14 months. That amounts to 10 percent of the force and none of them will be replaced according to Administrator Peter Valessi. The numbers vary around the state, but they all tell a similar story.

In Woodbridge, 24 officers, or nearly 10 percent of the force, retired in 2010. In Red Bank, three officers retired and three special officers who serve one year terms were not rehired, decreasing uniformed police in that department by 13 percent. In Freehold township, departmental changes have increased the responsibilities of patrol officers, who now respond to motor vehicle accidents, answer all types of calls, and run radar stops on roads, said local PBA president William Gallo.

“Everyone has to do a little more now,” Gallo said, “whether that’s answering more calls, taking care of accidents or radar. We are making do.” Ryan, the state PBA representative, said that trend is becoming more widespread, as officers in special operations, including the anti-drug DARE programs, school resource officers and detective divisions, are moved to patrol duty. “We are worried, and I’m not trying to be a fearmongerer here, about a rise in crime” he said.

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As reported by trentonian.com, the leader of the state Senate says pension and health care benefits for public safety workers cost an average of $47,000 a year, an ever-increasing amount that will bankrupt local governments unless workers start paying more. Senate President Stephen Sweeney released the figures from the Municipal Managers Association, on the eve of a public safety rally that could draw up to 10,000 off duty police and firefighters to the Statehouse to protest staffing cuts and proposed benefit changes.

Sweeney, a Democrat, has been called out by public safety union leaders who vehemently oppose his proposed health care changes, which are similar to what Republican Governor Chris Christie has proposed. Sweeney and Christie insist they are attempting to keep the pension and health benefits systems solvent, not hurt workers.

The public unions say Christie is breaking a promise not to tinker with their retirement benefits and the most powerful Democrat in the Legislature is going along. The pension and health benefits systems are significantly underfunded. The pension funds for police and firefighters, teachers, judges and state, county, and municipal workers are underfunded by $54 billion. The health care system is underfunded by $67 billion.

Public sector workers now pay 1.5 percent of their salaries toward healthcare. They pay varying percentages of their salaries toward pensions: judges pay 3 percent, teachers put in 5.5 percent, state police 7.5 percent and police and firefighters 8.5 percent.

Sweeney’s proposal would expand the number of available health insurance plans, and it calls for workers to contribute 12 percent to 30 percent of the cost of the premium, depending on their income. The plan would be phased in over seven years for families and four years for single-coverage employees. Those making up to $30,000 a year would be expected to pay up to 12 percent of their premiums at full phase-in, while those making $100,000 or more would be required to contribute 30 percent. Sweeney’s plan shields retirees, but would require future retirees to contribute a fixed amount each year, between $2,280 and $5,700, based on pension level.

Christie wants benefits changes that make the health insurance system more like the private sector or the federal government, with employees paying about one-third of the costs of whatever benefits plan they choose and the government picking up the other two-thirds. Automatic cost-of-living increases would be eliminated.

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As reported by nj.com, Governor Chris Christie began a town hall push to press lawmakers to make state employees pay more for benefits or be blamed for scotching property tax relief. The first meeting took place on February 24, 2011 in West Deptford, the hometown of Senate President Stephen Sweeney.

Speaking to a receptive crowd, Christie said residents needed to pressure lawmakers to take his deal. “Here’s the deal I offered the Legislature: If they pass my reform, which is very simple-have employees pay 30 percent of their costs that would save us this year alone $300 million-I will take that $300 million and I will use it to double your property tax relief,” Christie said. He also stated, “The public employee unions will go crazy-they already are. They need to pass that reform…If they don’t, then you know they’re taking the side of the special interests over the side of the property taxpayers in the state.”

The Governor’s proposed budget fell just short of doubling the relief. He recommended allocating $458 million, an increase of 70 percent, or about $189.8 million, from last year. Property tax relief would double if Christie dedicates all $300 million he says could be saved by hiking the health insurance payments.   

The increase in property tax rebates would be for households making less than $75,000 a year or seniors and the disabled making less than $150,000 a year. Christie did not make those distinctions when talking to the crowd in West Deptford. 

Sweeney did not attend the town hall meeting. Under Sweeney’s proposals for benefit changes, the health contributions would be phased in over several years and would be based on an employee’s salary. Sweeney dismissed Christie’s comments. “It is nice that the governor took time out from his busy schedule of raising property taxes, underfunding education and pitting New Jersey residents against one another to visit somewhere that is actually in New Jersey,” his spokesman Chris Donnelly said. “Senate President Sweeney hopes he enjoyed his time in the great town of West Deptford.”

Assembly Democrat spokesman Tom Hester reiterated charges that Christie is encouraging class warfare by juxtaposing health cost increases against property tax relief. “The governor’s pitting of neighbor against neighbor-teachers against senior citizens, police officers against retirees, firefighters against the disabled-is abhorrent politics,” Hester said. “Senior and disabled citizens shouldn’t be pawns in this governor’s awful political theater.”

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As reported on trentonian.com, New Jersey Governor Chris Christie held fast to his national reputation for fiscal discipline amid the widespread financial crisis that has hit the United States, unveiling a $29.4 billion state budget that calls for heftier contributions from state workers for pension and health care benefits.

Christie proposes paying $500 million into the state’s severely underfunded pension system, the minimum required under a new state law to get the state to quit skipping its payments. But Christie says he’ll make the payment only if the Democratic Legislature agrees to reforms that require government workers to delay retirement and pay more. Union workers, a powerful Democratic constituency in a legislative election year, oppose the plan.

Christie’s carrot-and-stick budget plan also targets public workers’ health care. His plan calls for additional property tax credits to poor, disabled and senior households, but only if the Legislature significantly increases public workers’ health insurance contribution. Specifically, Christie wants legislation that would push one-third of the cost of health insurance onto state workers by 2014, up significantly from the 1.5 percent of their salary they pay now. Christie would apply the $323 million in savings to property tax relief for low-income, senior and disabled homeowners.

Unions plan to rally at the Statehouse on February 25, 2011 in support of public workers in Wisconsin, where protests have erupted over collective bargaining rights and public employees’ benefits are among the issues raising ire. In a speech at the American Enterprise Institute in Washington, Christie urged elected officials to follow his example in addressing spending and debt, and big-ticket items such as pensions and other benefits. “It’s time to do the big things-the really big things,” he said.

In New Jersey, Democratic leaders in the Legislature complained that Christie, through his budget, pits one group of middle-class residents against another. However, the League of Municipalities, an association of municipal mayors, says it’s pleased Christie’s budget proposal holds the line on spending and aid to towns.

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As reported by nj.com, with contracts for 49,000 state workers due to expire this June, Governor Chris Christie has publicly proclaimed he wants no pay raises and expects state workers to fork over much more for health and pension benefits. Union leaders say they have had no meetings with the governor’s office and worry this does not bode well for getting a deal before the current contracts are up.

At stake in this year’s talks are two of Christie’s signature issues: health and pension reform for state employees. Christie has declared there will be no pay increases for state workers, recently making the commitment in an interview with Fox News. He also has made clear his expectations for cuts in employee benefits: increase pension contributions for all employees to 8.5 percent of salary, require state workers to pay 30 percent of their health care premiums, raise the retirement age, and eliminate cost of living adjustments for pension recipients.

David Cohen, head of employee relations, will negotiate for the governor’s office, Christie said. “If and when he needs me to come in from the bullpen to help, I’m prepared to do it,” Christie said. Union leaders say they were told no meetings would be scheduled until after the governor’s budget presentation on February 22. In past contract negotiations, discussions have begun the fall before.

The governor’s office has gotten tough in negotiations with toll collectors who officially bargain with the New Jersey Turnpike Authority. The talks began in anticipation of a move by Christie’s office to privatize the operations and eliminate publicly funded collectors. Franceline Ehret, head of the toll collectors union, said the talks have been unlike any in the 10 years she had headed the group. She said in the past, the Turnpike Authority was empowered to make decisions about contracts, but this year all decisions are being routed through Christie’s office. She said the administration wants $12 million to $14 million in concessions, not including health and pension benefits changes.   

If the administration and the state workers unions cannot reach an agreement in June, the employees are barred from striking, but could use tactics to slow work productivity. The Governor, as employer, could initiate punishment if rules are not followed. Christie could opt to keep benefits out of the collective bargaining process and instead change the health benefits and pensions through legislation. That’s an option he said he would consider, but stressed his administration will bargain in good faith.

As one can expect, the upcoming contract negotiations with the Christie administration will have an enormous impact on all New Jersey public employees, to include public safety officers, and their successor collective bargaining agreements. Please continue to check this blog periodically to ascertain updates regarding the negotiations as they become available.

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As reported by app.com, New Jersey’s credit rating was downgraded by a major Wall Street rating agency, whose concerns over state debt and obligations for public retirees’ benefits now mean higher costs for the state to borrow money. Standard & Poor’s moved New Jersey’s bond rating down a notch to its fourth highest level. The move ignited an immediate partisan skirmish over which party is to blame and upped the pressure for pension and health benefit changes.

“The clock is ticking away on a pension and benefit bomb that can damage the health of the finances of our state,” Governor Chris Christie said at a town-hall meeting in Union City. Democrats said Christie aggravated the situation by not putting any money into the pension fund in the current budget year, when $3 billion was due. This coming year $3.5 billion is due, though a state law says that roughly $500 million will be required.

“Gov. Christie inflicted severe damage last year when he skipped the state’s pension payment,” said Assemblyman Louis Greenwald. “It was reckless and made the problem much worse. It was so short-sighted, in fact, that it wiped out all the benefits from the bipartisan pension reforms ushered into law early last year.” 

Standard & Poor’s said in its report that pension funding “remains the most significant risk to the state’s long-term credit quality.” Christie and fellow Republicans want to increase the retirement age, reduce benefits and boost employees’ contribution to the pension fund. Democratic leaders have a counterproposal that would reduce benefits and give unions input over managing pension investments.

The change is expected to have little immediate impact on state costs, as the state’s financial difficulties have been well documented and taken into account in recent borrowings. One recent bond sale was reduced in size because the rates were not meeting expectations.

Credit ratings for various state agencies dependent on appropriations from the state budget were also lowered by Standard & Poor’s. “We understand that Gov. Chris Christie has recently announced various reform initiatives that, if approved, could help begin to manage the state’s pension liability,” said the report. “We will continue to monitor this, but in our view progress on this front is likely to be gradual and we expect the state’s debt and liability profile to remain weak and continue to be a source of budget pressure.”

Standard & Poor’s said New Jersey’s pension system was 56 percent funded as of last June and that it expects the “pension funding ratio will weaken further as a result of the failure to fund” the required payment this budget year, though solid growth in investment income could offset that. The State’s long-term obligation for health benefits for retirees, which it finances on a year-by-year basis, is estimated at close to $57 billion.

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As reported by nj.com on February 8, 2011, Governor Christie’s plan to drastically change the State’s troubled pension system was introduced by Republican lawmakers on February 7, 2011, but Democrats who control the Legislature indicated they will push their own plan instead.

Assemblymen Declan O’Scanlon and Gary Chiusano sponsored Christie’s proposals in the lower house, while State Senator Joseph Pennacchio said he would introduce them in the upper house. The 139 page bill mirrors ideas Christie first laid out in the fall and would only affect future retirees. “We’re in dire shape and we’re trying to save the system,” said O’Scanlon.

The State’s pension fund faces a $54 billion shortfall, brought on by investment losses, increased benefits, growth in the number of public employees and the State’s decision over the years to repeatedly reduce or skip payments. Last year, Christie skipped a $3.1 billion payment. The proposals would not affect already-retired workers. Among the biggest changes:

·         All public employees would pay 8.5 percent of their wages towards pensions

·         The retirement age would be raised to 65 for most workers. To retire early, employees would need to have accumulated 30 years on the job, rather than 25, and would be docked one-quarter of 1 percent for every month of their age under 65

·         Pensions for most workers would be calculated on a five-year average of their highest salaries, up from three

·         The 9 percent pension bump given to employees 10 years ago would be rolled back for current and future employees

·         Police and firefighter retirees would see their maximum benefit shrink from 70 percent to 65 percent of their salaries

·         Annual cost of living adjustments would be eliminated

Democrats also promoted their own proposal outlined in January. That plan would create joint labor/management boards to administer the system; force employees to pay more if the fund’s fiscal health declines; roll back the pension boost or make employees pay more for it; and eliminate cost of living adjustment for new and recent hires.

“The Senate President has put forward a plan that would blow up the pension system as it currently exists and recreate it so it works and is no longer a political football,” said Chris Donnelly, a spokesman for Senate President Stephen Sweeney. “The Governor’s plan is simply more of the same that got us to where we are now.”

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On Thursday, February 25, 2010, Assembly Speaker Sheila Oliver and Assembly Republican Leader Alex DeCroce announced bipartisan Assembly legislation to reform public worker pensions and health benefits has been introduced.

They also said additional legislation to target pension and benefit reforms at state authorities and agencies and to close a loophole that allows public employees to collect a full pension while collecting an additional public salary are being finalized and will soon also be introduced.

Oliver and DeCroce sponsored the bills introduced, but additional sponsors will soon be added. The following bills were introduced:

A2461, which would:

• Limit pension system enrollment to new full-time employees who work at least 35 hours per week for the State or 32 hours for local government and schools;
• Base pensions for new police and firefighters on the three highest salary years rather than the highest single year;
• Impose a pensionable salary cap for new employees of the Police and Firemen’s Retirement System and the State Police Retirement System; and
• Repeal 2003 legislation that allowed a police or firefighter to retire at any age with 25 years of service credit on a special retirement allowance of 70 percent of final compensation.

A2460, which would:

• Require all public employees to pay at least 1.5 percent of their salary toward health benefits after the expiration of a current contract;
• Require new state workers to work at least 35 per hours per week to qualify for health benefits; and
• Require all newly-hired employees to pay at least 1.5 percent of their base pension toward health benefits upon retirement.

A2459, which would:

• Eliminate the sick leave injury program; and

ACR115, which would:

• Ask voters during a November election to amend the State Constitution to eventually require the State to pay the full amount of its required pension fund contribution.

This legislation serves as a companion to the legislation that was recently introduced in the State Senate. As such, please continue to check this blog periodically to ascertain updates regarding the same as it has tremendous implications for New Jersey Public Safety Officers.

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As reported in the Trentonian on February 9, 2010, legislation requiring public workers to assume a portion of their health benefits costs and providing relief to the State pension system has been introduced. The package of bills introduced follows vows by Democratic leaders in the State Senate to revisit pension reform recommendations made four years ago.

One bill requires state, local, and school district workers to contribute at least 1.5 percent of their salary toward their health care costs. Another caps at $15,000 the amount of unused sick time that can be cashed in at retirement. A third bill repeals the 9 percent pension benefit increase put in place in 2001 by changing the way pensions are calculated. The last bill in the package requires the State to make its annual payment to the pension system, not skip it or short it, as has been the custom in recent years.

Most of the proposals would affect new hires, not those already in the pension system. However, the measure requiring public workers to contribute toward their health care costs would take effect when their current contract expires. No figures were immediately available on the potential savings. 

The pension system is underfunded by about $34 billion and is in danger of becoming insolvent unless fixes are made. The proposals were first made in 2006 after the Legislature met in special session to come up with ways to lower New Jersey’s property taxes, which average $7,045 a household and are the highest in the country. Pension and health care costs are major drivers of property taxes. 

Former Governor Jon Corzine halted some of the legislative-driven reforms, arguing that they should be part of the collective bargaining process. The State’s Unions, which have long resisted pension reforms, supported Corzine’s position. 

Other highlights of the bills include: (1) limiting enrollment in the pension system to those considered full time; (2) enrollment in a defined contribution plan for part-timers; (3) calculating pension benefits based on the 5 highest years of salary, instead of the 3 highest years, for future public workers, and basing benefits on the 3 highest years, instead of the highest year, for future State Police employees; and (4) allowing pension benefits based on one job, not multiple positions.  

Please check this blog periodically to ascertain updates with regard to this proposed legislation. Were the bills ultimately passed, there is no doubt they would have a drastic effect on New Jersey Public Safety Officers.

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