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TRENTON -- After a day of haggling over details, Gov. Chris Christie tonight signed into law broad changes to pensions and benefits offered to public workers. The changes, which will largely affect future workers and won’t have much of an immediate impact on the state’s $46 billion pension hole, faced stiff opposition from labor unions every step of the way since being announced in January...
N.J. Gov. Chris Christie signs pension, benefits changes for state employees
March 22, 2010, 8:35PM
TRENTON -- After a day of haggling over details, Gov. Chris Christie tonight signed into law broad changes to pensions and benefits offered to public workers.
The changes, which will largely affect future workers and won’t have much of an immediate impact on the state’s $46 billion pension hole, faced stiff opposition from labor unions every step of the way since being announced in January.
"I’m thrilled," Christie said after signing his first laws as governor. "Today is a great day for the taxpayers of the state of New Jersey."
Though the package of three bills swiftly passed through the Senate, they had a rocky ride through the Assembly, where some members fought to make changes.
At one point today, Assembly Speaker Sheila Oliver (D-Essex) said she did not think the chief bill in the package would pass until May. But after last-minute negotiating, including an intervention by Christie, the Assembly passed that bill after lawmakers removed a provision to let full-time workers with fewer than 10 years on the job switch to a 401k-style plan. Some lawmakers worried that could hurt the stability of the pension system.
The bill was shuttled over to the Senate, which approved the change after 7:30 p.m., signed by Christie after 8:15 p.m. He called the bills the beginning of "fundamental reform."
Lawmakers said they were pleased they were able to resurrect pension reforms they were unable to pass in 2006 and 2008.
"Senator (Barbara) Buono and myself in 2008 took a stab at it and got our heads banged in," said Senate President Stephen Sweeney (D-Gloucester). "The fact that we’re finally moving forward with this unfinished business, I think the people of New Jersey are big winners today."
Over the past few weeks, labor unions representing teachers, police and firefighters, and other public workers argued the bills would undermine collective bargaining, lead to mass retirements of experienced employees and punish workers for a problem they did not create.
"It wasn’t a surprise, and we were disappointed a long time ago," Hetty Rosenstein, state director for the Communications Worker of America, said after the bill signing. "There isn’t a long-lasting impact in terms of savings. ... They targeted the lowest-wage workers for the greatest cuts. That leaves a very bitter taste in our mouths. It really is just for a soundbite and political expediency."
The state’s pension gap — calculated at $46 billion as of June — is largely the result of stock market losses and the state failing to make payments into the investment fund. But the number of workers in the system has soared by 20 percent since 1999, while retirees have increased 43 percent, placing a greater burden on state and local governments.
The new laws ban future part-time workers from the pension system, instead requiring part-timers who make more than $5,000 to join a 401(k)-style plan. It also makes pensions for future hires less generous, rolling back a 9 percent increase granted in 2001, requires pension payments to be based on one job, and limits payments of accrued sick leave for future workers to $15,000. The bills do not affect those already retired.
The only bill with a tallied savings is one that would require public workers to pay at least 1.5 percent of their salary toward their health care. That is expected to save local governments at least $314 million a year.
Teachers at the Statehouse today said it was unfair to require everybody to make the same percentage payments, no matter what kinds of benefits they received or the size of their family. "There’s not any equitable factor in there," said Patricia Kelly, a basic skills teacher with East Rutherford.
The Senate also approved a measure to place a constitutional amendment on the ballot in November asking voters to ensure the state pays its pension bill. The full payment would be phased in over seven years. The measure must be approved by the Assembly, but does not need Christie’s signature.
By Matt Friedman and Lisa Fleisher/Statehouse Bureau
Claire Heininger contributed to this report.
