New Jersey Gov. Chris Christie proposed a fiscal year 2016 budget Tuesday that cuts a promised pension payment by more than half a day after a judge ruled he must contribute an additional $1.6 billion to the pension fund for the 2015 fiscal year after Mr. Christie initially withheld that payment.
Mr. Christie's 2016 spending plan includes a $1.3 billion pension payment, the largest in state history. That contribution, though, falls short of the $3.1 billion it was scheduled to pay into the underfunded system. Christie called for more worker givebacks, and said he's working with unions on an agreement.
On Monday, a New Jersey Superior Court judge ruled in favor of plaintiffs in a consolidated lawsuit against the state of New Jersey and Mr. Christie trying to prevent the governor from withholding state payments to the $76.8 billion New Jersey Pension Fund, Trenton, for the fiscal year ending June 30, 2015.
The original lawsuits by more than a dozen unions were announced in May, and were intended to prevent Mr. Christie from cutting the state's payment for the fiscal years ending June 30, 2014, and June 30, 2015.
That same month, he proposed cutting the state contribution for the fiscal year ending June 30, 2015, to $681 million from the promised $2.25 billion.
The court had upheld Mr. Christie's decision to cut the payment for the fiscal year ended June 30, 2014, to $696 million from the promised $1.58 billion as within the emergency powers of the executive branch, in order to cover a budget deficit.
However, in Monday's ruling, state Superior Court Judge Mary Jacobson sided with the unions, saying Mr. Christie broke state law by withholding $1.6 billion from the retirement system this year.
“The court cannot allow the state to simply turn its back on its obligations to New Jersey's public employees,” the ruling said, “especially in light of the fact that the state's failure to make its full payment constitutes a substantial blow to the solvency of the pension funds in violation of plaintiffs' constitutional rights, and due to the fact that the terms of the (unfunded liability) payments were set forth — and even publicly endorsed — by the governor himself. In short, the court cannot allow the state to 'simply walk away from its financial obligations,' especially when those obligations were the state's own creation.”
Craig S. Gumpel, attorney for one of the plaintiffs, New Jersey State Firefighters' Mutual Benevolent Association, did not immediately return a phone call seeking comment, and officials in Mr. Christie's office could not immediately be reached.
Bloomberg contributed to this story.
