TRENTON, N.J. (AP) — The nation's financial downturn has forced many states to make tough decisions on expensive but long-untouchable public employee benefits.
Nowhere was the breakthrough more evident than in union-friendly New Jersey, where a Republican governor aided by Democrats enacted sweeping cost-saving changes.
Experts say the overhaul of pensions and health care benefits simultaneously was significant in scope and marked a pivotal moment for other states looking to do the same.
All 50 states have combined unfunded retiree obligations that top $1 trillion. And a recent study found that only 5 percent of states saved toward their obligations for retiree health care benefits.
Union officials say politicians have been effective at deflecting blame for years of irresponsible behavior and are using the economic downturn to portray public workers as the problem.
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