A lawyer for New Jersey Governor Chris Christie’s administration met sharp questioning from the state’s highest court after saying a law mandating minimum annual payments to state pension funds is “simply unsustainable.”
Assistant Attorney General Jean Reilly argued that state workers have no contractual or constitutional right to the payments under a pension law Christie signed in 2011. Rather, she said, the law violates the state constitution by binding future legislatures to make specific payments.
“You’re making an argument that no contract the state enters is any good or can be enforced,” Associate Justice Barry Albin said. “You’re also arguing that the state can never be held to its promises.”
Reilly said every contractual obligation requires the Legislature to set aside money through the appropriations process.
“Is that some sort of bait and switch?” Albin asked.
Unions representing hundreds of thousands of state workers claim Christie violated the law by failing to pay $2.25 billion by June 30 into the state’s underfunded pension system. Christie’s bid for state pension reform helped propel him into the national spotlight, and poses a political challenge as he weighs a Republican run for the White House in 2016.
New Jersey Superior Court Judge Mary Jacobson ruled in February that the state’s failure to make the full payment this year is a “substantial impairment” of the contractual rights of the police, firefighters, teachers and office workers who sued. She said Christie must work with legislators to fill a $1.57 billion gap.
Disregard Compromise
Chief Justice Stuart Rabner asked whether the state could disregard the compromise that lay at the heart of the 2011 law, which required both the workers and the state to increase contributions to shore up the pension systems.
“It may have been a political compromise but there’s nothing in the statute that makes one dependent on the other,” Reilly said.
Steven Weissman, a lawyer for the Communications Workers of America, argued the employees have a right to state pension contributions under their work contract and the court must uphold that right.
The judges questioned Weissman and other lawyers for the employees at length about whether the contractual right to the pension payments trumps other budget priorities such as Medicaid, education and law enforcement. The justices also grappled with the question of whether the courts should get involved in deciding pension payments, taxes and government spending.
“Who makes the determination as to which one of those budget priorities take priority?” Associate Justice Anne Patterson asked attorney Kenneth Nowak, who represents the New Jersey Education Association.
The case is Burgos v. New Jersey, L-1267-14, Superior Court of New Jersey, Mercer County (Trenton).
“It would lock down an ever-increasing fraction of the state budget,” Jean Reilly, who represents Christie’s attorney general, argued in the Supreme Court of New Jersey in Trenton Wednesday.
Unions representing hundreds of thousands of state workers claim Christie violated a 2011 law outlining annual pension payments, including $2.25 billion by June 30. Christie’s bid to reform the state’s underfunded pension system helped propel him into the national spotlight, and now poses a political challenge as he weighs a Republican run for the White House in 2016.
The 2011 law is “unconstitutional to the extent that it provides a right to an annual appropriation” in a fixed amount, Reilly said.
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