As reported by, nearly a year after Governor Chris Christie responded to a sudden budget crisis by slashing payments into the State pension system, New Jersey’s public labor unions will fight for their right to that money before the New Jersey Supreme Court on Wednesday.  A victory for the unions could send billions more into a beleaguered pension fund.  A loss would erase any guarantee the State will contribute into the retirement system of some 800,000 people, working and retired. State officials have warned a ruling for the unions would create a staggering budget crisis this year and the ramifications would ripple through future budgets.

The fight boils down to whether a five-year old pension law requiring the State to gradually increase its payments into the pension fund is constitutional.  A lower court ruled in February that Christie violated the rights of public employees when he cut $1.57 billion from the pension payment for the current fiscal year.  Superior Court Judge Mary Jacobson ordered Christie to work with the Democratic-led Legislature to restore the payment. “The court cannot allow the State to simply turn its back on its obligations to New Jersey’s public employees, especially in light of the fact that the terms of the…payment were set forth, and even publicly endorsed, by the governor himself,” Jacobson wrote.  ‘In short, the court cannot allow the State to simply walk away from its financial obligations, especially when those obligations were the State’s own creation.”

More than a dozen public worker unions had sued Christie for violating what they argued is a “constitutionally-protected contractual right” to pension funding under a 2011 reform package that raised the retirement age, suspended cost-of-living increases and pushed higher pension costs onto workers.  At the same time, it required the State to ramp up cash flow into the pension system over seven years until reaching the full payment recommended by actuaries to keep the system solvent.

The unions challenged the cuts, while Christie has challenged whether the contract is constitutional at all.  In its appeal to the Supreme Court, lawyers for the State argued the trial court’s ruling “fabricated a constitutional right to pension funding,” and that the Court doesn’t have the power to force the Legislature or governor to approve or make an appropriation.

Much like Jacobson declined to force the State to reverse the $1.57 billion cut, opting instead to order Christie and the Legislature to collaborate to make up the difference, the Supreme Court could take a range of actions.  They include upholding the law and ordering a full payment or a partial payment, endorsing Jacobson’s plan, or striking down the law.

“I think the best hope is that (the Supreme Court) sends a very clear message to this governor…that he has to make a valiant effort, at least, and not just us the scraps that are left over at the end of the year,” said Patrick Colligan, president of the New Jersey State Policemen’s Benevolent Association.

The unions have already filed another suit against Christie for shorting the pension payment by $1.8 billion in his proposed budget for the fiscal year beginning in July.