Unions representing teachers, firefighters, police, municipal and county workers filed a joint lawsuit against Governor Christie over his plan to pull back nearly $2.5 billion from the pension system to close a looming budget gap.
The governor said the state won’t pay $887 million due to the fund, abandoning a pension-payment plan that he had touted as one of his top accomplishments in office. Christie also plans to withhold an additional $1.6 billion in the next fiscal year, which begins July 1, but is seeking approval from the Democratic-controlled Legislature for that move.
Union leaders said the actions violated pension law that the governor signed three years ago and reversed his earlier promises to increase pension contributions.
“Everyone in New Jersey is subject to the laws of New Jersey, including Gov. Christie,” said Wendell Steinhauer, president of the New Jersey Education Association, the state’s largest public employee union. “Our lawsuit seeks to hold him accountable to follow the law that he signed in 2011.”
Under that law, union members accepted larger pension contributions, a freeze on cost-of-living increases, and a reduction in their benefits, Steinhauer said.
“They did not get to choose whether to comply with the law and we will not allow Governor Christie to treat his obligations under the very same law as optional,” he said.
Christie said Monday that he had no backup plan to fill the budget gap.
“There is no plan B,” the governor said at a news conference in Camden. “This is the plan and I am completely confident that this plan will be supported from whatever legal challenge that goes after us.
“I’ve said that from the beginning. This is not something I want to do, but when revenues fall as far short as they have, we have little or no choice.”
He added that he has “not heard one other idea of how to raise the approximately $1.7 to $1.8 billion from anyone in a position of responsibility in this state.”
Christie had touted the pension law as an example of his ability to work across party lines — a selling point for a governor viewed as a potential presidential candidate. The union givebacks, he said, would help right the struggling pension system.
Christie skipped the pension contribution altogether during his first year in office, but then committed to the stepped-up payments starting in 2011.
The law signed by Christie requires pension contributions to be increased over seven years, when they are to reach 100 percent of the recommended full contribution. The law gave workers the standing to sue if the payments were not made.
The lawsuit, filed in state Superior Court in Mercer County Friday, was also filed against state Treasurer Andrew Sidamon-Eristoff. The unions claimed in the lawsuit that their contractual and constitutional rights are being violated. They are asking the court to declare the governor’s actions illegal and to direct the treasurer to pay the contributions to the pension system.
Steve Baker, a spokesman for the teachers’ union, said he expects the lawsuit would be combined with a similar suit filed last week by three unions representing state troopers.
Financial experts have warned that, without full payments or further reforms, the fund might not have enough money to cover its obligations to retirees in 15 to 20 years.
The New Jersey pension system, currently valued at $76.76 billion, is one of the nation’s largest, with nearly 800,000 receiving benefits. But after years of skipped or partial state payments, it is also grossly underfunded, by roughly $52 billion, counting both state and local government obligations.
Keith Dunn, vice president of the New Jersey State Policemen’s Benevolent Association, said the union will pursue every legal and legislative option to strengthen the pension system and to ensure the state pays its debts “caused by a decade of skipped pension payments.”
“The years of blaming employees for the failed financial planning of the state and local government must end,” he said.
The Firefighters’ Mutual Benevolent Association, AFSCME, the AFL-CIO and 10 individual public workers are also parties in the lawsuit.