Unions claim N.J. violated state and federal constitutions by suspending cost of living adjustments and failing to make payments into the pension system for the last decade
TRENTON — A court battle over benefits began in earnest today, as dozens of the state’s public sector unions, workers and retirees filed a lawsuit in federal court to overturn the newly enacted overhaul of pension and health benefit care benefits.
The suit challenges several aspects of the new bill — a major victory for Gov. Chris Christie — including the suspension of cost of living adjustments until the fund is 80 percent financed, which is estimated to take 30 years. The unions say employees and retirees have “non-forfeitable rights” to the adjustments.
“This lawsuit is about basic fairness and justice,” said Barbara Keshishian, president of the New Jersey Education Association. “Governor Christie and the Legislature passed a law which illegally takes away benefits that school employees and others have already earned through their service to the people of New Jersey.”
The 17-count lawsuit was filed by the New Jersey Education Association (NJEA), Communications Workers of America (CWA), and public safety worker unions, among others. David Fox, an attorney for several of the unions, said they plan to file a similar lawsuit next week in state court.
In addition to suspending cost-of-living increases, the law requires all of the approximately 800,000 current and retired public workers — including police officers, firefighters and teachers — to pay significantly more for pensions and health benefits and raises the retirement age for new employees.
“The average state pension, including managers, is $23,000 a year, and just $14,000 for local government workers,” Hetty Rosenstein, New Jersey director for the CWA, said. “But hundreds of thousands of public service professionals planned their lives around that deal. The State of New Jersey, however, has not lived up to its end of the bargain.”
Rosenstein’s union is currently engaged in contract negotiations with the Christie administration.
The unions also contend the state’s underfinancing of the pension system over the last decade violates workers’ contractual rights and that the new system gives “unrestrained authority” a committee made up of union officials and state managers to make changes to pensions.
A more narrowly focused lawsuit has already been filed in state court by a Superior Court judge who says the new law shouldn’t apply to state judges because the New Jersey Constitution says their pay “shall not be diminished during their term of appointment.”
The overhaul, pushed through the Legislature with the help of Democratic legislative leaders and signed by the governor with much fanfare in June, seeks to cut costs because the pension and health benefit systems are underfunded by a combined $120 billion.
“Another lawsuit won’t change the fact that the public employee pension system was on a collision course with collapse without the governor’s and the legislature’s bipartisan intervention,” said Michael Drewniak, a spokesman for the governor. “The union leadership is unaccountably oblivious to that. So fine, file another lawsuit, keep your heads in the sand and ignore the problem; we will defend as necessary our pledge to fix the public employee pension system for all employees, former, present and future.”
Chris Donnelly, a spokesman for Senate President Stephen Sweeney (D-Gloucester), said the legislative leader is confident the law is “on sound legal footing.”
“He believes it is time to move on and tackle the next big issues impacting New Jersey, like getting people back to work and kick starting the economy,” Donnelly said.
The unions organized large rallies to protest the law as it made its way through the legislature and vowed political retribution for lawmakers who supported it.
Indeed, the unions have already withheld campaign funds and endorsements for the legislative leaders who supported the legislation. They say it does away with their rights to collectively bargain for medical benefits.
“Taxpayers will pay the price, both in the cost of defending the state’s illegal action and in the time lost when we should be coming up with real solutions to the problems New Jersey’s politicians have created through their irresponsibility with the pension system,” Keshishian said.
Related coverage:
• Moran: Real leadership sang louder than N.J. unions' tired refrains
• N.J. Assembly passes landmark employee benefits overhaul
• Protesters create spectacle at N.J. Statehouse throughout pension, benefits overhaul vote