quote from article: "...“If anyone deserves to be reprimanded for simply wishing funds into existence, it’s Chris Christie. Thats exactly how he fudges the books annually in his economic and budget projections..."”)
By George Amick/For The Times
on July 14, 2014
On June 30, Gov. Chris Christie vetoed the Democratic Legislature’s plans to amend his fiscal 2015 budget by including the statutorily required full $2.25 billion state contribution to the public employee pension funds and imposing temporary tax hikes on millionaires and corporations to pay for it.
Christie’s firm control of the Legislature’s Republican minority put the two-thirds vote in each house necessary to override a veto out of reach. But the Democrats, and their public-employee union allies in the battle against the Christie budget, hope their defeat at the Statehouse will be trumped by a victory in the courts.
The governor’s vetoes were an exclamation point on his earlier decision to walk away from a commitment he made as part of the great bipartisan pension overhaul of 2010 — an overhaul he previously had praised to national Republican audiences as evidence that, under his leadership, New Jersey was a place where elected officials put aside partisanship to achieve worthwhile results.
It provided a way to reduce the huge unfunded pension liability that was created during years in which the state of New Jersey shorted the pension funds or made no payments at all. The state would resume its annual contributions and increase them by one-seventh each year until fiscal 2018, after which it would pay the full annual amounts necessary to eliminate the deficit in the funds and meet its future obligations.
In return, public employees were required to increase their own contributions to the pension funds and their health-care costs. They’ve been doing that since 2011.
Then, last April 28, the plan collapsed. Christie again had overestimated state revenues, as the investment rating agencies had criticized him for doing in previous budgets, and the state treasury was collecting far less in taxes than he had forecast. His response was to cancel the $887 million pension contribution remaining to be made in the fiscal year that was drawing to a close and slash the payment in his fiscal 2015 budget by $1.57 billion.
A group of unions sought an injunction against Christie’s plan, contending that it would violate the 2010 pension reform law and the contract rights of New Jersey’s public workers.
Superior Court Judge Mary Jacobson heard the case on June 25, only five days before the end of fiscal 2014, and ruled that despite the language of the law, Christie had appropriately exercised his emergency powers to reduce that year’s pension-fund payment and meet the constitutional requirement that the budget be balanced.
The governor was “between a rock and a hard place,” Judge Jacobson said, and his lawyers had proved that key programs would be cut, with “severe and immediate impacts on vulnerable populations,” if the state was forced to come up with the full amount at that late date.
But Christie’s plan to whack the state’s contribution to the funds by an even bigger sum in the new fiscal year was another matter. The judge found that the 2010 law gave public employees a constitutionally protected contractual right to full pension payments, and promised to hear arguments on the fiscal 2015 budget later on. Democratic lawmakers believe they’ve built a good case for their side by sending Christie a budget that would have fully funded the pensions.
They had expected his vetoes, Senate President Steve Sweeney told The Times’ editorial board last week. But, he explained, “We wanted to prove to the court that we could pass a balanced budget that would meet all the state’s obligations.” The Democrats’ budget demonstrated that “it’s not that we can’t pay; it’s that we” – meaning the governor – “choose not to pay,” he added.
Meanwhile, the Legislature also approved another bill, S2265, requiring the state to make its contributions to the pension funds on a quarterly basis, in July, October, January and April, rather than in a lump sum at the end. The purpose, its Assembly sponsors said, was to “prevent the state from raiding the pension fund to balance the state budget at the very end of a fiscal year in the event of a revenue shortfall.” But Christie vetoed this measure, as well, throwing in a scornful message for good measure.
“This bill represents an improper and unwarranted intrusion upon the long-standing executive prerogative to … properly match the timing of large annual expenditures with the timing of the actual receipt of state revenues,” he wrote. “Simply wishing in a law that sufficient funds will be available on specific future dates does not change the fiscal realities of revenue collection during the course of a 12-month year.”
(The last sentence prompted one Democrat to comment: “If anyone deserves to be reprimanded for simply wishing funds into existence, it’s him.”)
A spokesman for Sweeney said the Senate president plans to try to override the veto of S2265. However, although the bill passed the Senate by far more than a two-thirds margin in both Houses — 36-3 in the Senate and 62-13 in the Assembly — the chances that Christie will be overridden for the first time since he took office are slim. Republican legislators have shown a willingness in the past to change their votes en masse rather than risk offending the governor.
If the effort fails, however, Sweeney will at least have the satisfaction of pointing out that his Republican counterpart, Senate Minority Leader Tom Kean Jr., not only voted for S2265, but spoke approvingly of the idea of quarterly pension payments when the two men were interviewed recently by Statehouse newsman Michael Aron. “I’ve got him on the record,” Sweeney said.
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