US Supreme Court Deals Devastating Blow In Public Union Pension Case

Connor D, Wolf

03/01/2016

The U.S. Supreme Court delivered a devastating blow to New Jersey labor unions Monday by declining to hear their case against Gov. Chris Christie for cutting state pensions.

The former Republican presidential candidate cut state pensions in 2014 as part of a reform bill designed to address budget problems in the state. A group of public-sector unions, however, were quick to file a lawsuit to stop the reforms. They argued the cuts violated a contractual agreement the state had to fund retirement. The highest court declined to hear the case after a nearly two-year legal fight.

“Now it’s time to return to the hard work of coming together to find a real, long-term solution to make our pension system and public employee health benefit costs affordable and sustainable,” Christie spokeswoman Joelle Farrell told The Associated Press. “All parties need to come back to the table and work on the governor’s plan to find a solution that is fair for all taxpayers.”

At the center of the conflict is a 2011 budget provision known as Chapter 78 which Christie agreed to. The provision legally compelled the state to pay retirement pensions in full. Nevertheless, Christie signed Executive Order 156 in 2014 which cut pension benefits from the $2.25 billion required to only $681 million.

The New Jersey Supreme Court ruled June 9 the pension cuts were legal and did not violate the previous agreement. State unions vowed to continue fighting and appealed their case to the Supreme Court. The appeal was signed by the Communications Workers of America, the New Jersey Education Association and the American Federation of Teachers among others.

The administration has defended the cuts by noting it simply means state employees have to help fund their personal retirement plan. New Jersey is among several states being put at risk of massive debt because of pension benefits, according to a 2014 report from the New Jersey Pension and Health Benefit Study Commission.

National and state labor unions have relentlessly attacked Christie since the legal dispute began. Christie fueled the union hate while running for president before dropping out.  The New Jersey AFL-CIO said Christie would make a horrible president because of how he managed the state.

Christie himself touched upon the union attacks in a recent speech. He noted unions are most upset about not being able to take whatever they want from state taxpayers. Labor unions in the state enjoyed four Democratic administrations before Christie took office in 2010.