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6-8-15 Pension Decision To Be Released Tomorrow - Tuesday June 9 2015

Star Ledger - Supreme Court ruling in N.J. pension legal fight coming Tuesday  ‘…The decision will have far-reaching implications for hundreds of thousands of workers and the current budget — which expires in three weeks — and future budgets…’

Samantha Marcus | NJ Advance Media for NJ.com

By Samantha Marcus | NJ Advance Media for NJ.com The Star-Ledger Email the author | Follow on Twitter
on June 08, 2015 at 1:08 PM, updated June 08, 2015 at 1:52 PM

TRENTON — The much-anticipated Supreme Court decision in the battle between Gov. Chris Christie and public worker unions over billions of dollars in pension funding will be released Tuesday.

The decision will have far-reaching implications for hundreds of thousands of workers and the current budget — which expires in three weeks — and future budgets. It could also have an impact on Christie's reputation as governor as he readies a run for the White House.

THE ISSUE

The court has been asked to determine whether Christie broke his highly touted 2011 pension law when he slashed funding to the system by $1.57 billion for the current fiscal year to close a budget gap.

Under that law, which Christie promoted on the national stage, public employee unions began contributing more to their pensions, the retirement age was raised, and cost of living increases for retirees were frozen. Christie, in turn, promised the state would greatly increase its contributions to the long-underfunded pension system.

Public employee unions sued when Christie sliced the contribution by $1.57 billion, and a lower court judge ruled in February that the governor violated workers' "constitutionally protected contractual right" to pension funding.

Christie appealed to the state's highest court, arguing that the parts of his pension law were unconstitutional, he couldn't be bound to make the increased payments, and that governors shouldn't have to contribute to the system when there isn't enough money in the budget.

In more than three hours of oral arguments, the justice questioned whether the law created a contractual right for public workers — and how that should be balanced against the state's other spending priorities.

WHAT IT MEANS

The ruling could have an immediate impact on the current state budget — and a long-lasting one for budgets to come.

With the end of the fiscal year nearing, Christie's treasurer and the head of the Legislature's chief budget analyst said the state has virtually run out of money to make the full contribution this year.

David Rosen, legislative budget and finance officer for the nonpartisan Office of Legislative Services, said most of the state's large pots of money are out of the door, and it may be "fiscally or physically" impossible to pull the funds together.

Christie also recommends shorting next year's payment by $1.8 billion in his proposed budget. Lawmakers would also have just a few weeks to scrape together that funding before that fiscal year begins July 1.

State Senate President Steve Sweeney has proposed raising taxes on millionaires to generate the extra cash, though that would only cover a portion of the shortfall.

HOW THE COURT CAN RULE

The Supreme Court could take a range of actions, legal observers say, including upholding the law and ordering a full payment or a partial payment, endorsing the trial court's order, or striking down the law.

Robert Pallitto, a Seton Hall University political science professor and a former attorney, has said he expects the court to stop short of ordering a payment rather than risk an inter-branch constitutional showdown.

"This is a tricky case for separations-of-powers reasons," he said. "Courts don't like to order the political branches to raise funds or make payments."

But even if the justices uphold the pension law and order Christie to make this year's full payment, it still doesn't create an absolute right to a certain level of funding in the future, because exemptions exist for emergencies, Pallitto said.

Samantha Marcus may be reached at smarcus@njadvancemedia.com . Follow her on Twitter @samanthamarcus. Find NJ.com Politics on Facebook.


Garden State Coalition of Schools
160 W. State Street, Trenton New Jersey 08608
609-394-2828