June 16 (Bloomberg) -- Governor Chris Christie and New Jersey legislative leaders agreed to raise government workers’ payments for pensions and health care, as unions protested and three high-ranking Democrats pledged to oppose the plan.
Christie, a first-term Republican, told a gathering of the New Jersey Association of Counties in Atlantic City that the proposal may pass as soon as June 24 and called it “historic.” The Senate Budget Committee voted 9-4 for the measure today as thousands of employees picketed outside the Statehouse.
“These reforms are needed now, we have a pension system that is in crisis and teetering on the brink of collapse,” Senate President Stephen Sweeney, an ironworkers union official, said during testimony on the bill. “The taxpayers are tapped out, and we can’t go down that road anymore.”
The proposal pending in the Legislature would overhaul pensions by raising the retirement age to 65 and freezing cost-of-living raises. Workers would also be forced 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. Unions protested that the payments should be negotiated.
Sweeney, 52, and Assembly Speaker Sheila Oliver, both Democrats, and Senate Minority Leader Tom Kean and Assembly Minority Leader Alex DeCroce, two Republicans, all said yesterday they planned to advance the proposal. The full Senate will vote on it June 20, followed by the Assembly, they said.
Three Democrats Oppose
Democrats including Senate Majority Leader Barbara Buono, Senate Budget Committee Chairman Paul Sarlo and Assembly Majority Leader Joseph Cryan said they oppose the measure because it would gut collective-bargaining rights. Buono, from Metuchen, said she doesn’t support packaging health-care and pension changes in one bill. She and Sarlo joined two other Democrats on the budget panel in voting against the proposal.
“This isn’t about the next election, this is about the next generation,” Christie, 48, said today in Atlantic City. “What you are watching I am going to guarantee you when it’s finished next Thursday will become a national model and will be hailed across the country.”
Christie has said the overhaul is needed to shrink a pension deficit that increased 18 percent in a year to $53.9 billion as of June 30. The state hasn’t made contributions for most of the past decade, including a $3 billion payment skipped last year. The government will make a $759 million contribution to the plan once lawmakers approve the benefits overhaul, Treasurer Andrew Sidamon-Eristoff said last month.
Hissing and Booing
Union members hissed and booed as Sweeney, a Senate sponsor of the measure, testified on the proposal in the budget hearing.
“You’re not my brother,” one observer yelled from their midst, a reference to Sweeney’s union position. Outside, rallying Communications Workers of America members heard more heated words.
“My brothers and sisters, welcome to Nazi Germany,” Chris Shelton, vice president of the union’s District 1, told the demonstrators. “We have Adolf Christie and his two generals trying to make New Jersey into Nazi Germany.”
The union was granted a permit for 5,000 people to rally in front of the Statehouse Annex office building where the vote was to occur, State Police Sergeant Brian Polite said yesterday.
Speaking later about Shelton’s comments, Sweeney said he was “very disappointed for educated people to resort to that kind of rhetoric.” Shelton subsequently apologized, the Associated Press reported.
Inside the capitol, the hearing was delayed as police led out dozens of union members chanting “union rights are human rights” and “kill this bill” as Bob Master, the CWA’s political director, testified against the measure.
“Real Democrats would have killed this bill,” Master said. His union represents about 40,000 state workers, the largest among New Jersey government employees, and has urged lawmakers to let changes in health-care contributions be handled through contract negotiations rather than with legislation.
Members of his 24-member Senate Democratic caucus are free to “vote their consciences” on the proposal, Sweeney said. He said he’s confident the measure will get the 21 votes needed to pass. The chamber has 16 Republicans.
Once the overhaul has passed, Sweeney said he anticipates rapid action on the budget and passage before a June 30 deadline, when the fiscal year ends. He said a new tax on residents with million-dollar incomes may be included.
Christie vetoed a so-called millionaire’s tax last year and has said he’ll reject a spending plan that increases levies.
Changing the way pensions and health insurance costs are borne will make New Jersey more affordable for businesses and residents by curbing government personnel costs, which have driven up property taxes, Christie said.
“The only way to do that is to control spending -- there is no magic wand,” Christie said. “Affordability comes at a price: There are choices to be made and sacrifices to share.”
The overhaul includes a provision sought by Oliver to let unions seek lower health-insurance payments for members after four years.
“The pension system as it exists now is unsustainable,” said Senator Joseph Pennacchio, a Republican from Morris Plains who voted in favor of the package. “The worst thing we can do is nothing.”
Union leaders condemned the agreement as soon as it was announced yesterday, while a business group gave Christie a standing ovation last night when he described the accord.
“Senator Sweeney and Sheila Oliver are doing much more than throwing working families under the bus and into chaos: They’re attacking workers’ time-honored right to have a voice in the decisions the government makes about their jobs,” Hetty Rosenstein, state director for the Communications Workers of America, said yesterday in a statement. “We expected this from Governor Christie, but we did not expect so-called Democratic leaders to abandon working families.”
At least 3,000 government workers, public safety officers and firefighters assembled outside the capitol annex where the budget panel met, State Police said. Cars traveling below the speed limit choked traffic on Route 29, a main road into Trenton, as unions urged workers to try to delay the arrival of lawmakers at the Statehouse.
“We’ve heard a lot of lip service about collective bargaining from members of the Legislature, but they’re ramming health care at us,” said Sherryl Gordon, executive director of New Jersey Council 1 of the American Federation of State, County and Municipal Employees.
Freezing pension raises would prove harsh for retired workers, said Bill Lavin, president of the Firemen’s Mutual Benevolent Association.
“It’s absolutely a betrayal by government of people who put their lives on the line,” Lavin, an Elizabeth firefighter, said in an interview. “This gets us on a course to have an ever-declining standard of living for the rest of our lives.”
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