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Christie’s Employee Retirement-System Overhaul Passes New Jersey Senate

The New Jersey Senate passed Governor Chris Christie’s plan to scale back pension and health benefits for government workers, as unions protested and a majority of Democrats in the chamber opposed the measure.

Lawmakers voted 24-15 for the bill today, 12 days after Christie, a first-term Republican, and Senate President Stephen Sweeney, a Democrat, announced a compromise. The Assembly Budget Committee subsequently passed the measure 7-5 and the full lower chamber is scheduled to consider it on June 23.

“This is not an attack on our public workforce,” Sweeney, of West Deptford, said during more than two hours of floor debate in Trenton. “What happens to those people if we don’t save these pensions today? We have a responsibility to our public employees.”

The proposal would raise the retirement age to 65 from 62 and freeze cost-of-living increases. Workers would be required to contribute as much as 35 percent of the cost of health insurance premiums based on income, up from 1.5 percent of salaries currently. It would also require workers to pay more into pension plans.

Sweeney, 52, Assembly Speaker Sheila Oliver, Senate Minority Leader Tom Kean and Assembly Minority Leader Alex DeCroce all said on June 15 that they would support the proposal. The legislation includes a provision sought by Oliver to let unions seek lower health-insurance payments after four years through contract negotiations.

Eight Democrats

Democrats control the Senate, 24-16, and the Assembly, 47- 33. All Republicans in the Senate and eight Democrats voted for the bill. Senator Ron Rice, a Newark Democrat, didn’t vote.

“I am encouraged by the bipartisan Senate vote today and the continued display of support for common-sense pension and health-benefits reform,” Christie said in a statement. “This is a watershed moment for New Jersey, proving that the stakes are too high and the consequences all too real to stand by and do nothing.”

Christie has said the overhaul is needed to shrink a $53.9 billion pension deficit that opened as the state skipped contributions for most of the past decade, including a $3 billion payment last year. The government will add $759 million to the plan once lawmakers pass the benefits overhaul, Treasurer Andrew Sidamon-Eristoff said last month.

Unions demonstrating at the Statehouse called for the health-care changes to be made at the negotiating table. Labor groups have staged several rallies against the measure, condemning Democrats for agreeing to the measure.

Bargaining Power

Democrats including Senate Majority Leader Barbara Buono and Senate Budget Committee Chairman Paul Sarlo opposed the proposal, saying it would gut collective bargaining.

“The day we vote to undermine collective bargaining is the day we begin to erode our identity as a nation,” said Buono, of Metuchen. “This has become more about busting the unions than about solving these problems.”

During the protest, workers and union leaders said they have been unfairly targeted to make up for rising health insurance costs and the state’s failure to adequately fund the pension system.

“I can’t afford to do this job if I’m making less money in four years than I am right now,” said Yolanda Grbic, 37, who has taught school in Jersey City for 10 years. “I’m already living paycheck to paycheck. This is something we negotiated.”

To contact the reporter on this story: Terrence Dopp in the N.J. Statehouse at tdopp@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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