New Jersey Gov. Chris Christie will propose a new round of major pension and health benefit cuts for public employees as he delivers his budget address Tuesday, a day after a judge ordered his administration to restore $1.57 billion in delayed payments to the state's pension system.
Christie will dedicate his annual budget address to outlining the danger of the state's spiraling pension and benefits costs and propose a series of changes based on a long-delayed study commission's findings, according to guidance provided by the governor's office.
Christie, who is considering a run for president in 2016, will also announce that the New Jersey Education Association — the state's largest teachers union and long one of his main political foils — has signed onto a "road map" for further reforms. He'll call on state lawmakers to join with him.
"I know we can get this done. We have proven time and again that even when we look like we're not going to make it work and that politics and partisan interests have won, we flip the script. We do it differently. We get it done," he is expected to say, according to an excerpt of his prepared remarks.
The NJEA's executive director, Ed Richardson, told The Associated Press the group has agreed only to the concept of finding long-term pension fixes, not to many of the specifics Christie is expected to outline.
"We're trying to get to a place where we can come out of this with a secure, reliable retirement benefit for our members as well as other public employees," Richardson said.
The speech will come less than 24 hours after Superior Court Judge Mary Jacobson ruled in favor of public workers who sued Christie for slashing pension contributions he had agreed to as part of a 2011 deal struck with the Democrat-controlled Legislature. The deal increased public workers' contributions and raised retirement ages in exchange for the state paying more into the funds.
The administration is appealing the ruling and does not appear to be taking it into consideration as Christie prepares for his address.
Christie is expected to propose a $1.3 billion payment into the pension system in fiscal year 2016 — a number his office is touting as the largest in history but which still doesn't come close to the $2.25 billion that the earlier deal called for this year. Christie had been on board with the higher figure before cutting it back amid a surprise state revenue shortfall. The full payment for fiscal 2016 under the old agreement would have been around $3 billion.
Christie has said that delaying payments last year and this year was the only reasonable way for the state to balance its budgets after tax revenue fell short of expectations. According to his office, New Jersey is on track to have to pay out more than $4 billion in annual pension payments by 2016, in addition to nearly as much in health care costs, crowding out other spending.
The 2011 pension deal was touted as one of Christie's signature accomplishments as governor and was used as evidence that he could work with Democrats to solve one of New Jersey's persistent financial issues. He appears to be trying to reclaim success and his status as a Republican who can work across the aisle as he prepares for a likely presidential run.
The olive branch to the teachers union is a big part of that, though Richardson said it's important that the state make larger pension fund contributions now — and he does not believe $1.3 billion is enough.
Christie's speech is likely to coincide with the release of a report by a study commission he appointed to examine the state's ballooning benefits payouts. A preliminary report released in September warned that the public employee pension and health benefit systems face "dire" problems that are "likely to worsen" without action.
Previewing his budget priorities last week to New Jersey lawmakers, lobbyists and business leaders in Washington, Christie urged union leaders and members to work with him to ensure the funds' long-term health.
"What we need to do going forward is to avoid, if we can, confrontation on this issue, and to reach out and cooperate," he said. "What I want the public sector union leadership and employees to understand is that ultimately this is as much their problem as it is our problem.
"If these funds do not have the money to be able to keep the promises to their members, if we cannot continue to have them have a pension, their members will suffer as much or even more than the reputation of the state in general. "
Christie will kick off a town hall-tour Wednesday to sell his plan.
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