Reporting Michael Wallace
NEW YORK (WCBS 880) - Gov. Chris Christie has been getting all the attention for signing that pension reform law in New Jersey that forces state workers to contribute a lot more for their health coverage and retirement.
LISTEN: Sweeney With Carroll And Wallace
(Download the full interview HERE)
But it was a five-year effort spearheaded in 2006 by current State Senate President Stephen Sweeney.
Sweeney joined WCBS 880′s Pat Carroll and Michael Wallace live on the air Wednesday morning.
MW: You’re a little miffed that a lot of the attention seems to be going to the governor?
SS: Of course. The governor, at the end of the day, the governor’s the governor. No matter who the governor is, they got the biggest microphone.
MW: Tell us how long a haul it’s been to try to get this done.
SS: Well, it’s been five years. It was a rough fight. I went to the unions back in ’06. We talked about this and I’m a labor leader and I saw a pension system heading towards insolvency and a health benefits system that wasn’t sustainable, and I went to them and my reward was basically inflatable rats.
They had ‘Sweeney’s a Weeny’ hot dog people, which I actually thought was a little comical, but they really attacked because they don’t want to tell their members the truth. They don’t want their members to know that their pensions are going to go broke.
They’ll just blame the legislature. That’s what one of the union leaders told me. And I can’t let that happen, not to the 800,000 people that depend on pensions and the health care system in this state.
We had a $120 billion deficit when you combine the two, and I mean not million, billion. So, everyone’s saying it’s going to be okay. This is our budget year 2012. We’re looking at the pensions going broke anywhere from 2018 to 2020. So, if the unions were willing to work and basically stand up and tell their members the truth like I do in the private sector. We tell our members. I don’t like telling my members they have to put $2 an hour more into their pension when the economy’s as bad as it is, but you know something, we tell our members the truth. And they keep telling their members the sun’s shining when it’s raining.
Well, we got a monsoon right now and my job is to do the right things for the people of this state. The pension reforms for the workers. The health care reforms for the taxpayers. And I don’t think taxpayers minded when healthcare was $10,000, $12,000 a family plan, but we’re going to go over $20,000 a plan, so we had to do something.
PC: So this is a very tough sell for you, particularly coming from a union background, and it took years. What has changed that made it more feasible now?
SS: Well, obviously the administration, you know under Gov. Corzine, he thought these changes were too extreme. In fact, he stood with the president of the AFL-CIO when I actually proposed it, and it says ‘I’m going to stand with you and fight for your contract,’ and I thought that was actually a bad decision on his part because it defined him as not standing with the taxpayers and I don’t think Gov. Corzine meant it to define that way. He believes in collecting bargaining and I have a great deal of respect for Gov. Corzine, but what got us into this problem was legislation.
We had the executive director of the teachers’ union testify when we were doing the benefit reforms. And he said, ‘We have a great teachers health plan that saves millions of dollars for taxpayers.’ That’s what he testified to. Well, that health plan was not collectively bargained with one school district. It was done through legislation, and even the deductibles were set by legislation. So you can’t talk out of both sides of your mouth. You can’t say ‘collective bargaining’ and then legislate things. That’s what got us into this trouble.
The pension system, they reduced their contributions by 40 percent – not all unions, firefighters and police officers did not play with their pensions and they were very, very fiscally sound in the way of their management of their pensions. But all the other unions, they reduced their contribution by 40 percent. They lowered the retirement age by five years. They increased the value of the pension by 9 percent for everyone including retirees. And, not putting any money in to back any of these changes and ‘Oh my God, we’re broke?’
Anyone that understands a little bit about pensions understands that any change that you make have to be tied to funding. And you just can’t give people things because they say they want them. You know, some of these public employee union leaders run for office just like I do. So it’s nice when you can come back and say ‘Look what I got you’ and they say ‘Well it didn’t cost me anything.’ ‘How’d you do that?’ ‘Well, don’t worry about it.’ Well it cost them their future.
We were at a point in time where our pension system was going to go under, we have one of the worst pension systems funding ratios in the nation, and the government failed by not making the pension payments under Democrat or Republican governors. And what we were able to accomplish in this legislation, and Gov. Christie signed, was the contractual language that forces the pension payment. So, the government can’t skip their payments anymore.
We really did something unique here and the governor agreed to a concept that I came up with which is, in the private sector we have a thing called Taft-Hartley where you have labor management boards that actually really manage the pensions and make the decisions on pensions and health benefits. Well, we’re creating those similar boards in government, where you’re going to have equal numbers of labor and management that are going to manage the pension and are going to manage and create new health plans so that we can bring down the cost of health care. So, you know, this is private sector management principles being injected into the public sector.
MW: As you were talking, Senator, the Greek Parliament passed that austerity package by a narrow margin but these are the times we live in where governments really have to cut back. You and your house and the Assembly will be passing a budget today that the governor claims is unconstitutional, where’s that going to go?
SS: Well, the governor’s claims are not accurate and unfortunately we got information from his treasurer, who is going to put on paper whatever the governor chooses to say. We have an Office of Legislative Services, it’s bi-partisan, that tells us where the revenues are, and the Office of Legislative Services has been more accurate over the last several years under Democrat and this Republican administration. They haven’t played games with either side. And they told us that they originally said they were projecting $913 million in a windfall, the governor projected $511 million. The office of legislative services, just looking at it recently said ‘Adjust it to $800 million and that’s the number you can absolutely go in with conservatively and it’s a safe number to budget.
PC: So, is it going to get wrapped up by Friday, the deadline?
SS: Well, we’re passing a budget today. I mean, it’s up to the governor now.
We’re going to put a budget on his desk that we feel is constitutional. We cut spending in other areas. We documented the spending cuts and we feel that we’ve given him a budget that looks out for seniors, the middle class and the poor, reinistates the earned income tax credit.
Last year the governor ran around saying ‘I didn’t raise income taxes,’ Well he didn’t raise them on millionaires, but he raised them on the poor. The poor people in this state – their earned income tax credit was cut. So, they had an average tax increase of $400 a year. So, he’s half-right. He didn’t raise them for the rich, but he did raise them for the poor.
He’s getting a budget that fully funds every school district in the state for the first time in history. We’ve done some very unique things in this budget, that is constitutional and balanced, and if he chooses to veto the budget, then that’s on him. We’re going to stand with our information, and we’re going to stand strong in backing up that we are on solid ground with this budget.