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Star Ledger - N.J. Teachers Union Blasts ‘Dishonest’ Christie, Vows No Negotiation On Pension
Print Email By Claude Brodesser-Akner | NJ Advance Media for NJ.com The Star-Ledger
on July 20, 2015 at 4:20 PM, updated July 21, 2015 at 7:15 AM
TRENTON — The head of the New Jersey Education Association teachers union on Monday blasted Gov. Chris Christie's rejection of a proposal to spread state public employee pension payments out over several years, and vowed the union will not bow to cuts demanded by the governor.
"We have no intention of negotiating anything with this governor," said Wendell Steinauer, president of the NJEA.
"He's dishonest, unreliable and hopelessly incapable of good-faith negotiations. He's consistently lied about his pension funding intentions, and he's yet to live up to the promises he's already made. The ball is in his court to fund the pensions according to the law he signed. We will not negotiate against ourselves. We will not concede one inch to this governor."
Assembly Speaker Vincent Prieto (D-Hudson) is advancing a plan that would give the state five years to make the full contribution suggested by actuaries to keep the public employee pension plan solvent, sources told NJ Advance Media last week. The plan would not undertake the top-down refitting of pension and health benefits being sought by the governor.
RELATED: Christie won't accept public employee pension payment plan without more reforms
Christie, who has made entitlement reform a centerpiece of his 2016 presidential bid, told NJ Advance Media on Friday that he could not support a plan that simply sought to "stretch out the time requirement to make the same payment for the same bloated system."
He also called the NJEA's leaders "greedy" and "selfish," suggesting they are more concerned with retaining their high-paying union jobs than reforming a the long-troubled pension system.
Steinnauer said Monday the NJEA would continue to work with Prieto and Senate President Stephen Sweeney (D-Gloucester) to "find an achievable, sustainable pension solution" while at the same time ensuring that "the state will meet its full pension obligations to our members and to all public employees."
In a shot clearly aimed at Christie's White House ambitions, Steinnauer said the state's pension woes could only be addressed "by people whose concern for New Jersey extends beyond 2017."
"We cannot afford to waste any time discussing real solutions with a governor who only wants tweets and bumper stickers for his presidential campaign," Steinauer said.
"We have no intention of negotiating anything with this governor."
Christie was campaigning in South Carolina on Monday and will also make a swing through Iowa later this week.
In a statement emailed to NJ Advance Media, Christie's deputy press secretary, Nicole Sizemore, said the arithmetic of the failing retirement system was unassailable.
"The simple fact is this: the average NJEA member contributes $186,000 to their pension and health benefit costs over 30 years and takes out $2.5 million in benefits," wrote Sizemore.
"The math does not work and all the name calling in the world by NJEA leadership won't change that fact."
The state largest teacher's union may not be willing to talk, but, she insisted, "We're ready and waiting."
NJ Spotlight - In Wake of Ruling, Search for Funds for Pension Bailout Grows More Urgent…Major players have plans, strategies of their own, making consensus unlikely in short term
John Reitmeyer | July 20, 2015
It’s been more than a month since the New Jersey Supreme Court issued a major ruling on public-employee pension funding, finding that the state doesn’t have to follow a 2011 law that promised increased state pension contributions as a contractual right of workers. And though the high court said the payments aren’t required, the pension system’s huge unfunded liability is still a big problem that actuaries say is only getting worse.
But so far this summer, though the state’s political leaders have been searching for answers, they’ve had little success agreeing on a solution.
On one side of the debate is Gov. Chris Christie, a second-term Republican, and others who believe the only way to address the health of a pension system that is $40 billion in debt thanks to roughly two decades of underfunding is to enact the sweeping changes recommended earlier this year by a nonpartisan panel of benefits experts. Those changes included freezing the current pension funds and moving employees into a new retirement system with features of a 401(k).
But Democrats who control the Legislature, led by Senate President Stephen Sweeney (D-Gloucester), and public-employee labor union leaders have largely been holding firm to their position that the state doesn’t need to enact more reform, but simply abide by the pension-funding commitments made in the 2011 law known as Chapter 78, even if it means raising taxes to bring in more revenue.
At stake in the ongoing debate are the retirements of an estimated 770,000 current and retired public workers who are relying on the $80 billion pension system to be there when their careers end. And for taxpayers, there are also enormous consequences because the court ruling reaffirmed that employees still have a right to receive their pensions, meaning the annual payouts will have to come out of the state budget if the pension system ultimately goes broke.
There are also enormous political implications in play, including for Christie, who is now running for president after trying to make pension reform a signature issue since taking office in early 2010. And there are political considerations for lawmakers to weigh this year with the full state Assembly up for grabs in November, and with leaders like Sweeney already among those jockeying to become the next governor when Christie’s term is up in early 2018.
Waiting to enact more reform on top of the 2011 law -- which also required workers to pay more toward their pensions in addition to increasing state contributions -- would be a mistake, explained Tom Byrne, a member of the benefits-study commission, during an NJTV interview late last week. The state, he said, won’t be able to raise enough revenue to come up with the money needed to cover both what’s owed to retirees on an annual basis and still pay off the pension system’s long-term debt.
“We have about $80 billion in the state pension fund and we need another $40 (billion) in order to meet the needs of retirees down the road,” said Byrne, who has served as a state Democratic Party chairman and is the son of former Gov. Brendan Byrne.
“We pay out about $10 billion a year from the state pension fund, and it already has a negative cash flow,” said Byrne, who is also the chair of the State Investment Council, which oversees the management of the pension system. “And the actuaries say that that money will disappear within a decade.”
“In the context of a $33 billion state budget, I just don’t see how $10 billion of that is going to be devoted to pensions,” he said. “It’s not realistic.”
And while Sweeney has taken a firm stance that the seven-year ramp up to the full payments required by actuaries to restore the health of the pension system -- which was the schedule spelled out in Chapter 78 -- should be followed even if the Supreme Court didn’t require it, Assembly Speaker Vince Prieto (D-Hudson) has been more open to the idea of lengthening the payment schedule.
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Prieto gathered union leaders together in Secaucus last week to talk about pension funding, with NJ Advance Media reporting that sources said Prieto has floated the idea of taking another five years to get to the full payment required by actuaries.
In a statement provided to NJ Spotlight, Prieto said only that he and the union leaders “are exploring options and weighing alternatives” at this point. The meeting, he said, “was part of an ongoing discussion I've been having on how best to ensure the health of the pension system for our public workers while protecting taxpayers.”
Among those with the most at stake in the pension-funding debate are teachers, a point driven home late last year with the release of new financial projections that indicated the pension fund could be depleted by 2027 without more robust state contributions. And New Jersey Education Association leaders initially entertained the work of the benefits commission earlier this year before ultimately rejecting its recommendations.
Steve Wollmer, a spokesman for the NJEA, said his union is among those now open to the discussions that Prieto is leading.
“The Supreme Court ruling did not resolve the problem, and letting the pension fund crash and burn is an unthinkable outcome,” Wollmer said. “Therefore, NJEA welcomes a robust discussion of how to fund the pension system to ensure its long-term viability.”
In addition to freezing the pension system, the commission Byrne sat on also recommended forcing employees at all levels of government to accept less-generous health coverage and using the savings to help pay down the pension system’s heavy debt. Local school districts would also pick up the cost of teacher retirements, which has long been a state expense, under the commission’s proposal.
In addition to seeking the new reforms, Christie earlier this year floated his own pension-payment schedule, suggesting the full ramp up should be spread over 10 years. The new budget Christie signed into law in late June included $1.3 billion for the pension system, not the full $3.1 billion that would have been required in the fifth year of Chapter 78’s seven-year ramp up.
That $1.3 billion contribution represents 3/10ths of the more than $4 billion that actuaries say the state should be paying on an annual basis.
Christie, in his veto message said the $1.3 billion contribution would still be the largest in state history and would establish “a strong foundation for moving forward on a fiscally responsible path.” But others, including Sweeney, have raised concerns that pushing off full payment only leaves more of the burden on future generations.
An NJ Spotlight analysis of both the seven- and 10-year ramp up schedules found the extra three years sought by Christie would add $14.35 billion in liabilities over the next 30 years.
