Court: State Does Have To Pay Cost-Of-Living Requirements
TRENTON, N.J. (CBSNewYork/AP) -- The New Jersey Supreme Court has delivered a victory to Gov. Chris Christie and ruled the state does not owe public pensioners cost-of-living payments suspended under a 2011 law.
The ruling Thursday effectively keeps the state from having its unfunded liability increased by about $17.5 billion.
The court heard oral arguments in March in the case that reaches back to a nearly five-year-old law passed by a Democrat-led Legislature and signed by Christie that suspended cost-of-living adjustments.
It's the latest case the court is deciding in a battle between the Christie administration and pensioners and unions. The court delivered the administration a victory last year by declining to require specific pension payments required under the same 2011 law.
Pension funding is perhaps the biggest and thorniest home-front issue for Christie.
One of his signature accomplishments was the 2011 deal with the Democratic-controlled Legislature to overhaul the system. The state promised to make escalating payments intended to restore the funds lost over decades of undersized and skipped contributions. As part of the same law, worker contributions were increased and retirement ages were raised.
But in 2014, the state government found itself in a new budget crisis when tax revenues were lower than expected. Christie solved that by lowering pension contributions. That's what prompted Justice Barry Albin, the most reliably liberal member of the state's court, to ask if the administration was pulling a "bait and switch" with workers.
Unions sued over the funding reductions, and in 2015 a lower-court judge agreed with them, ordering the governor and lawmakers to put nearly $1.6 billion more into the funds for the fiscal year that ends June 30.
A group of retired prosecutors brought the case. Public unions support their effort.
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