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June 25, 2014 01:00 AM

Gov. Christie wins court ruling on pension contribution cuts

Bloomberg
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    Andrew Harrer/Bloomberg
    New Jersey Gov. Chris Christie

    New Jersey Gov. Chris Christie won a key ruling when a judge ruled that he was within his rights to cut contributions to the $76.8 billion New Jersey Pension Fund, Trenton, for the year ending June 30.

    More than a dozen unions sued to block Mr. Christie's plan to reduce pension contributions by $887 million in this fiscal year and by $1.57 billion the next fiscal year. Mr. Christie said a drop in anticipated revenue forced him to trim pension contributions to balance his $33 billion 2014 budget.

    Unions for teachers, firefighters and other state workers claim Mr. Christie ignored a 2010 law by shrinking contributions to the pension system, which is underfunded by more than $50 billion. Superior Court Judge Mary Jacobson in Trenton asked union lawyers about Mr. Christie's position that she can't usurp his role in budget balancing.

    “For 2014, it doesn't appear that the money is available,” Ms. Jacobson told Steven Weissman, an attorney for the Communications Workers of America, during the hearing. “So how could I order the funding of an unfunded liability when the money isn't available?”

    Mr. Weissman said the state should make pension contributions of at least the $300 million that he said represents the budget surplus this year. Pension recipients have a contractual right to contributions to their funds, he said.

    Assistant Attorney General Jean Reilly argued that Mr. Christie's constitutional responsibility to balance the budget trumps any contractual rights that workers may have to pension contributions. She said the $300 million figure is only an estimate, and the size of the surplus won't be known until at least December when the state's books are reconciled.

    “If the state didn't start the year with this cash on hand, it would jeopardize its ability to exercise its core function,” Ms. Reilly said.

    Mr. Christie said he would make a payment of $696 million this year. He also previously announced the fiscal year 2015 contribution would be $681 million, a reduction from the previously pledged $2.25 billion.

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