By John Celock
Returning to one of his favorite gubernatorial subjects, New Jersey Gov. Chris Christie (R) used his budget address Tuesday afternoon to call for an overhaul of the state’s pension system.
In the speech to lawmakers, Christie proposed transferring control of the teacher pension plan to a trust fund controlled by the teacher’s union that would include a state payment. He also called for a constitutional amendment to guarantee minimum pension funding from the state, along with calling for changes to the health benefits plan for state employees. The calls come a day after a state judge said that Christie had underfunded the pension system by $1.57 billion last year and on a day when the New Jersey Education Association had said they had not agreed to an overhaul.
“If we continue to do nothing, spending on pensions and health benefits will make up 23 percent of New Jersey’s budget and in years ahead that percentage will grow larger,” Christie told larger.
The teacher pension overhaul proposed by Christie would shift the teacher’s pension plan to union control. He said that the plan was developed during months of negotiations between the NJEA and a pension and benefits study commission he appointed. After word leaked out earlier Tuesday about a deal between the union and Christie, the NJEA said that a deal was not struck and that the two parties had only agreed to talk about possible reforms. Christie and the NJEA have been long time enemies.
Christie spoke of the overhaul as a done deal, calling on lawmakers to pass it as part of his budget plan. He said the commission is providing a roadmap for the state to address the pension and benefits issue that has been among the top ones he has addressed since taking office five years ago.
Christie says that the plan would allow the teacher’s union to control the pension and have control of the investments in the plan for their members. He said the state would continue to pay into the plan and that a constitutional amendment for payments would set a guarantee. Christie’s proposal only covers teachers and not other public employees.
“Inaction is unacceptable,” he said. “Repeating the mistakes of the past is irresponsible.”
Christie also said that changes to health benefit plans for state employees are needed to reduce costs. He noted that this can include redesigning the plans to address costs, along with creating wellness programs and other initiatives to encourage state employees to stay healthy.
Christie did not address Monday’s court ruling on pensions. His administration had said the state will appeal the case, which could hand lawmakers another budget hole to plug during this year’s negotiations.
Christie spent the beginning of his speech focused on his fiscal record, touting what he says are record investments in the pension system and savings for taxpayers. He touted his record on holding firm in taxes and also said that his budget has seen cuts from the budget proposed eight years ago by then Gov. Jon Corzine (D).
Towards the end of the speech, Christie held firm on tax issues, saying that he would need to raise the state sales tax by 10 percent and income taxes by 29 percent to address the pension liability. Republicans greeted his tax remarks with a standing ovation while Democrats remained seated on the floor of the Legislature.
Christie said that lawmakers need to address pensions now and not leave the decision for future legislators. He said a delay will cost the state in other areas including education, drug addiction and economic development.
“That is the cost of inaction. That is the cost of doing nothing,” he said. “That is the cost of pushing this off to someone else. There is no one else. There is no one else but us.”