NJ Legislative Leaders to Join Unions’ Lawsuit Against Christie for Failing to Follow Pension Funding Law - Health Professionals & Allied Employees

NJ Legislative Leaders to Join Unions’ Lawsuit Against Christie for Failing to Follow Pension Funding Law

From the New Jersey AFL-CIO, April 20, 2015

New Jersey’s legislative leaders, Senate President Stephen Sweeney and General Assembly Speaker Vincent Prieto, will sign on as amicus curiae to the New Jersey public employees’ pension lawsuit challenging the Christie Administration’s continuing failure to make statutorily required payments to the state pension system.

A law commonly known as Chapter 78 was enacted in 2011 to reduce the unfunded liability of the pension system by extending the retirement age and exacting higher benefits contributions from employees in exchange for a commitment that the state would phase in its full annual pension contribution. The lawsuit filed by more than a dozen public employee unions, and now to be joined by Sweeney and Prieto, stems from Gov. Chris Christie’s repeated failure to obey the law he promoted and signed.

The fact that legislative leaders Sweeney and Prieto are joining the unions’ lawsuit as a friend of the court strengthens our already strong case. By committing to the lawsuit, the legislative leaders are demonstrating their belief that the governor must adequately fund the pension system to ensure its long-term viability. A superior court judge and three Wall Street ratings agencies agree.

The state has suffered nine credit downgrades under Christie, more than any other New Jersey governor in history. The continuing concerns over Christie’s fiscal stewardship mean higher borrowing and interest rates paid by New Jersey taxpayers.

The amicus brief to be filed in Mercer County Superior Court states that the Legislature fulfilled its constitutional obligation to fund the pension system by dedicating $2.25 billion to cover 4/7ths of the annual required contribution in FY15. However, Christie vetoed the revenue sources that were earmarked for the payment: an additional tax on earnings exceeding $1 million, and a one-year surcharge on corporation business taxes.

Sweeney and Prieto also make clear in the brief that the Legislature disagrees with the administration’s claim that the 2011 law the governor’s office lobbied for and reviewed is unconstitutional.

The Legislature’s inclusion in the lawsuit comes as the pension court case is about to heat up. The New Jersey Supreme Court will hear oral arguments on May 6 on the administration’s appeal of Superior Court Judge Mary Jacobson’s ruling, which stipulates that the administration owes $1.57 billion to the pension system in the fiscal year that ends June 30, 2015.

The unions will be back in Mercer County Superior Court on May 12 on a new complaint filed over Christie’s failure to include the state’s full statutorily required pension payment in the FY16 budget. It is the third consecutive budget in which Christie has violated the contractual rights of pensioners, putting at grave risk the retirement security of tens of thousands of workers.