Christie Breaks Out Pension Playbook as Democrats Resist

Photographer: David Paul Morris/Bloomberg

For New Jersey Governor Chris Christie, the appeal to rein in what he calls a lavish retirement system may still hold value as he seeks to win back Republican support and recover from controversy over lane closings at the George Washington Bridge. Close

For New Jersey Governor Chris Christie, the appeal to rein in what he calls a lavish... Read More

Close
Open
Photographer: David Paul Morris/Bloomberg

For New Jersey Governor Chris Christie, the appeal to rein in what he calls a lavish retirement system may still hold value as he seeks to win back Republican support and recover from controversy over lane closings at the George Washington Bridge.

Chris Christie is returning to the political playbook that helped make him a national Republican figure during his first term.

Just as in 2010, the New Jersey governor is blaming Democrats and public-employee unions for the state’s pension-funding hole and pushing for cutbacks to help solve a budget crisis. The attacks have dominated Christie town-hall meetings and national speeches as the governor faces criticism for the state’s deteriorating fiscal condition.

For Christie, the appeal to rein in what he calls a lavish retirement system may still hold value as he seeks to win back Republican support and recover from controversy over lane closings at the George Washington Bridge. Yet this time around, Democratic leaders emboldened by his lower approval ratings are refusing to negotiate more benefit changes.

Feeling The Pension Pinch

“I don’t think he really wants this solved -- he wants the political points,” said Senator Ray Lesniak, a Democrat from Elizabeth. “Beating up on public workers is a popular thing to do. His approval ratings dropped dramatically since the bridge scandal. They’ve stabilized and now he’s trying to get back with this.”

Christie renewed his attack on government workers in February when he proposed a $34.4 billion state budget that he said was bloated by rising costs for pensions and benefits. The overhaul that Christie convinced Democrats to support during his first term didn’t go far enough, he said.

Fiscal Gimmicks

Since then, Christie has continued to call for more unspecified changes. In May, as income-tax collections fell short of his forecasts, he reneged on promised pension contributions. Christie has cited similar lapsed contributions by predecessors as gimmicks that contributed to the state’s poor fiscal health.

Senate President Stephen Sweeney, the West Deptford Democrat whose support helped Christie win approval for his pension overhaul, said he’s not asking workers for more concessions. The governor has allowed his national ambitions to creep into Trenton policymaking, Sweeney said.

“He’s looking beyond New Jersey and running for president,” said Sweeney. “It’s absolutely not going to happen. He made an agreement to that funding and the avenue was there for that funding but he chose not to do it. Why would anybody agree to go back for another round.”

Round Two

The pension measures enacted during Christie’s first term boosted employee contributions, raised the minimum retirement age for new workers and froze cost-of-living adjustments. He also signed a law that required the state to make one-seventh of its pension payment in fiscal 2012, and then raise it each year until it hit the full amount in 2018.

New Jersey’s pension deficit, which reached $53.9 billion in 2010 after a decade of skipped payments and expanded benefits, fell to $36.3 billion. It then grew to $47.2 billion in 2012 as Christie made only partial contributions.

The pension burden, along with a sluggish recovery, have led to six credit downgrades under Christie, tying him for the most of any New Jersey governor. The three major rating companies have signaled the potential for more downgrades.

At a July 1 town hall in Caldwell, Christie pushed for additional pension and benefit changes. He said he would present a plan this summer that would “inflict pain” and be “universally criticized.”

Approval Ratings

“This is an unsustainable system and we need to get back to fixing it,” he said. “People don’t want to hear that down in the state capitol but it is the truth and the numbers show.”

Christie won re-election in November after defeating his Democratic challenger by 22 percentage points. Then e-mails surfaced in January that showed aides used the closing of bridge access lanes to punish a mayor who didn’t endorse the governor.

Revenue shortfalls and credit downgrades have also dogged Christie this term. His approval rating among New Jersey adults was 50 percent in June, down from 70 percent in February 2013, according to the Monmouth University Polling Institute. A national poll of potential 2016 presidential candidates this week by Quinnipiac University found 38 percent view Christie unfavorably, compared with 18 percent a year ago.

Christie in recent weeks has ramped up his political travel as chairman of the Republican Governors Association. The trips brought him to New Hampshire and Iowa, two early-voting states in the Republican selection process, and exposed him to party donors. He’s also traveled boardwalks across the Jersey Shore to mingle with the tourist crowds.

‘Great Message’

“His campaign rhetoric will be that Democrats wanted him to raise taxes so union bosses could have cushy pensions, and he refused,” said Ben Dworkin, the director of the Rebovich Institute for New Jersey Politics at Rider University in Lawrenceville. “This is a great message to take before a conservative presidential primary electorate.”

Brigid Harrison, a professor of law and government at Montclair State University, said the television appearances on “The Tonight Show Starring Jimmy Fallon” and CNBC coupled with calls for a new pension clampdown are aimed more at shoring up support with a national Republican constituency.

“He’s gone past sticking his toe in the water and his whole foot’s in,” Harrison said. “There’s very little for him to gain within New Jersey -- he’s already won his last election here and he violated a policy he created. It’s all allowing him to travel the country and say he’s taking on these public unions.”

Full Funding

At a Hurricane Sandy-related event in Keansburg on July 7, Christie denied allowing his possible presidential aspirations to intrude on state policy, and said it’s too soon to make a decision on a potential bid.

“You all have been asking me about running for president since 2010,” Christie told reporters. “So is every action I’ve taken since 2010 being viewed through the prism of the presidency? I don’t think so.”

Assembly Speaker Vincent Prieto said any future pension talks would need to start with full funding. New Jersey doesn’t have a spending problem, he said. The larger issue is the state’s stagnant economy and the need to find a way to cover costs already incurred, said Prieto, a Democrat from Secaucus.

Lawmakers last month passed a fiscal 2015 budget that would have made the full $2.25 billion pension contribution by raising taxes on millionaires and corporations. Christie cut the payment to $681 million and vetoed the tax increases.

Because of Christie’s lower payments, the state’s share of the pension gap, now $38 billion, will exceed $40 billion by 2016, Treasurer Andrew Sidamon-Eristoff said in May.

“Let’s fully fund what we have before we cut back,” Prieto said. “We’ve already asked those individuals to pay more and to put more skin in the game, which they did. We’ve got to figure out first how we’re going to fully fund this.”

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

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Stacie Sherman, Alan Goldstein

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.