BY TOM HESTER SR.
The state Senate on Monday afternoon approved by a vote of 24-15 legislation that will make New Jersey’s 500,000 state and local government employees and teachers pay more for their health insurance and pensions.
Senate President Stephen M. Sweeney (D-Gloucester) had to rely on the support of 16 Republicans to reach the 21 votes needed for passage. Seven of the 24 Democrats joined Sweeney in providing the remaining eight votes.
Joining Sweeney and the 16 Senate Republicans were Senators James (D-Camden), Fred Madden (D-Camden), Donald Norcross (D-Camden), M. Teresa Ruiz (D-Essex), Brian P. Stack (D-Hudson), Jeff Van Drew (D-Cape May), and Jim Whelan (D-Atlantic).
Sen. Ronald Rice (D-Essex) did not travel to Trenton for the vote.
The vote came as the Assembly Budget Committee held a hearing on the bill (S-2937/A-4133) in preparation for a vote by the full lower house on Thursday. After a day-long hearing, the Budget Committee Monday evening also approved the legislation.
The controversial bill, which has been strongly opposed by government workers and many Democratic legislators, is a centerpiece sof Gov. Chris Christie’s effort to reduce state and local government spending and bailout the financially unstable state-run pension plans
“I am encouraged by the bipartisan Senate vote today and the continued display of support for common-sense pension and health benefits reform,” Christie said after the vote. “This is a watershed moment for New Jersey, proving that the stakes are too high and the consequences all too real to stand by and do nothing. As a result of Democrats and Republicans coming together to confront the tough issues, we are providing a sustainable future for our pension and health benefit system, saving New Jersey taxpayers hundreds of billions of dollars and securing a fiscally responsible future for our state.”
Sen. Nia H. Gill (D-Essex) voted against the bill. “I support collective bargaining," the senator said. "Not only because it is a Democratic principle, but because it is an American principle, that has advanced the lives of working people throughout our country and beyond our borders." Gill added, "However, the Legislature should not legislate away the public employee’s right to sit at a bargaining table and negotiate. We should let the bargaining process run its course. By voting on this bill, the Legislature is now complicit in allowing Governor Christie to abdicate his responsibility to collectively bargain with state workers."
The pension system faces a $53.9 billion deficit. Health care costs also have climbed, and there are $66.8 billion in unfunded liabilities. Christie maintains the system will face insolvency by 2020.
"We're not sure whether it's going to save money or not, we've got to design it," Sweeney said at a news conference after the vote.
The legislation would double what most public employees contribute to their health insurance. The proposal also would shift the retirement age from 60 to 65 for people entering the workforce.
It would eliminate cost-of-living increases that help workers offset inflation and property tax hikes. And it would split insurance plans in to two areas: one for treatment primarily at New Jersey hospitals, and one that would permit workers to get out-of-state care — presumably at a higher cost — though Sweeney could not say whether one plan would be cheaper than the other.
Senate Republican Leader Tom Kean, Jr. (R- Union) said, "Today, the taxpayers won. The compromise legislation passed by the Senate will save taxpayers well in excess of $100 billion over the long term and induce a near immediate reduction of local property taxes.
"That last point is worth repeating: this legislation will result in property tax relief almost immediately without the gimmicks of the past,” Kean said. “It reduces the cost of state and local government on a scale that this state has never before seen, allowing local officials to get their budgets under control. In short, government will work for the taxpayers - not the other way around."
Sen. Joe Pennachio (R-Morris), who joined Sweeney in co-sponsoring the bill, said, “Everyone acknowledges that the state pension system is in serious financial trouble.” The senator continued, “By some estimates the state’s pension system will default by the end of this decade. That’s it, empty, nothing left for retired or soon to be retired hard-working, rank-and file-state employees.
“Future state payments into the pension funds will be far and away greater than what was put into the system over the last 20 years,” Pennachio said. “The contributions will also be contractually guaranteed, state workers will be able to challenge any no-payment in court. We can no longer delay; we must take immediate steps to rescue the pension and health benefits systems for those employees. The current and pension and health benefits system is unsustainable it is built on a foundation of sand. This fix will guarantee the solvency of the system. But we must find the courage to move forward and implement these changes. The worst possible option is to continue to do nothing. Instead, this bill will require small, incremental sacrifices.
Union leaders warned committee members that they believe the legislation raises a string of legal issues and to "expect an onslaught of litigation."