The New Jersey State AFL-CIO is outraged that the New Jersey State Supreme Court ruled against 800,000 current and retired members of the New Jersey public pension system by overturning a Superior Court decision that Gov. Christie violated his own law when he withheld state pension payments.
“This ruling is disheartening for current and retired employees who have gone to work, lived by the rules and faithfully paid into the system,” said Charles Wowkanech, president of the New Jersey State AFL-CIO, which filed the lawsuit with 16 public employee unions. “After dedicating their entire careers to public service, this ruling leaves them more worried than ever that their modest pensions won’t be there when they need them.”
“It is important to understand that this isn’t solely a setback for public employees,” added Wowkanech. “This is setback for the entire state and in particular, our economy. The failure of the governor to act responsibly has resulted in a record nine credit downgrades and has made New Jersey the poster child for fiscal irresponsibility.”
While the ruling did not go the way we had hoped, we are encouraged by the court’s clear recognition that pensions are deferred compensation that has been earned and is an obligation that must be paid to pensioners. The court also recognized that the Legislature and the Governor intended to create a contractual right for retirees to receive their pensions.
Furthermore, the court admonished the Governor and Legislature to get the State’s financial house in order and to respect the State’s commitment to retired employees.
We’re also heartened that Senate President Stephen Sweeney and Assembly Speaker Vincent Prieto joined our lawsuit, and for their commitment to pass a budget that includes the Chapter 78 required pension contribution, just as they did last year.
“Hard working teachers, nurses and public workers’ ability to retire with dignity after long careers of caring for New Jersey’s resident has been dealt a blow by this decision,” said AFTNJ President Donna M. Chiera. “Gov. Christie created this problem by backtracking on what he claimed as his signature achievement, legislation designed to find a middle ground to funding the pension liability. On behalf of 30,000 members of AFTNJ we are joining with public workers in calling on the governor and the Legislature to find a balanced approach including raising revenues from those who can afford to pay in order to meet our obligations and gain fiscal stability.”
Unfortunately, the court ruled that Chapter 78 created long-term debt for future legislatures and governors. The only way to be sure this obligation is honored year after year is a voter approved constitutional amendment.
If the governor continues to act irresponsibly by refusing to fund the pension system according to the law, then we will call on the Senate President and the Speaker of the Assembly to approve a constitutional amendment to be put on the ballot.
“We hoped the court would uphold the basic tenet that the law is what it says it is,” said CWA New Jersey Director Hetty Rosenstein. “But the fact that they didn't rule for us is merely another obstacle that we will overcome. Governor Christie broke his word, and whatever shred of credibility he had left when he refused to fund the pension. Our union will never permit the destruction of the pension system and, as such, the destruction of New Jersey’s economy. If it is unconstitutional to meet the pension obligation, perhaps we will have to change the constitution. But one thing I know is this: we will fight, and we will win.”
It’s important to remember that everyone has been doing their part to restore the pension system to fiscal health, except the governor. Pensioners have increased their contributions, retirees have forfeited cost-of-living increases, local governments have paid their full share, and the Legislature has sent the Governor a balanced budget with full pension funding, which he of course vetoed.
“What kind of example are we setting for future generations,” asked Wowkanech. “We teach our children that our word is our bond, and yet we have the state’s highest-ranking elected official breaking his bond with the public and getting a pass.”
The New Jersey State AFL-CIO and our affiliates will continue to fight for the solvency of the public employee pension system by working with the Legislature to fully fund pensions and by holding our elected officials accountable to uphold the pension reform law they enacted in 2011.