N.J. Public Worker Benefits, Pension Would Be Revamped Under Proposed Legislation

Over the strong objections of labor unions, lawmakers tonight introduced reforms they said could drastically remake public worker pensions and benefits in New Jersey and stabilize a pension fund in crisis. Each piece of the four-bill package had at least 23 sponsors in the state Senate, above the 21-vote threshold needed for passage, Democrats and Republicans said. The state Assembly was preparing to introduce a companion version later this week, officials said. The state pension system, which includes accounts covering more than 700,000 working and retired state, county and municipal employees and teachers, was underfunded by about $34 billion as of the last official count in 2008.

The proposals would require workers and retirees at all levels of government and local school districts to contribute to their own health care costs, ban part-time workers at the state and local levels from participating in the underfunded state pension system, cap sick leave payouts for all public employees and constitutionally require the state to fully fund its pension obligations each year.

While most of the reforms would apply to future workers, current employees would have to contribute at least 1.5 percent of their base salary towards their health care costs.

Unions representing public employees were quick to defend their benefits as fair, given the lower salaries they often receive compared to the private sector.

“It’s not really a perk, it’s part of their income — part of when they decided, ‘I’m going to become a teacher, I’m going to make $35,000 a year,’” said Bill Lipkin, president of the New Jersey State Federation of Teachers.

The larger New Jersey Education Association also was cool to the reforms, saying they interfere with the collective bargaining process. NJEA president Barbara Keshishian said lawmakers are forcing teachers to pay for the consequences of the state’s failure to fully fund the pension system in recent years.

“We urge parents and all citizens of New Jersey to not let the politicians use the people we all rely upon to educate our students as the scapegoats for their own irresponsibility,” she said.

But lawmakers said they are ready to withstand a struggle with union leadership and pointed out that rank-and-file workers’ retirements are already in jeopardy.

“Something must be done and fast, if we are to save the system from collapsing under the weight of its debt and failing to deliver on its promise to provide long-term security for people who have dedicated their lives to government work,” said Sen. Barbara Buono (D-Middlesex), one of the sponsors of a bill that would cap sick leave at $15,000 for all new public employees. “Pensions under attack? Quite the contrary.”

Gov. Chris Christie had previously pledged his support for Senate President Stephen Sweeney’s (D-Gloucester) efforts to change the pension system. A spokesman for Christie, Michael Drewniak, tonight said only: “The Governor campaigned on pension and benefits reform. We look forward to seeing more details as the process moves forward.”

A spokesman for Sweeney declined to comment tonight, as did Republican legislative leaders. Assembly Speaker Sheila Oliver (D-Essex) said she expects the Assembly Budget Committee to hold a hearing on the bills soon.

“One of my priorities has been to take a hard look at the unfinished property tax reform business,” Oliver said, referring to many of the reforms first put forward during a special legislative session in 2006. “This is an important issue and it requires a thorough review.” Star Ledger