New Jersey’s highest court on Tuesday ruled that Gov. Chris Christie’s (R) administration is not on the hook for $1.57 billion in pension payments that a lower court previously said were owed.
The court handed a victory to the likely presidential contender just weeks before he is expected to officially launch his campaign. In a 5–2 ruling, the court found that there wasn’t an enforceable contract to require Christie and the legislature to come up with the full payment for the current fiscal year.
“This is not an occasion for us to act on the other branches’ behalf,” the court said, adding that it is the people’s responsibility to hold the elective branches of government responsible for their exercise of powers.
In 2011, Christie’s pension reform deal was heralded as a major, bipartisan success. But just a few years later, his plan had quickly deteriorated and he was targeted with a lawsuit alleging he has driven New Jersey’s pension system to the brink of bankruptcy.
When Christie failed to make the billions of dollars in payments he promised to 800,000 of the state’s working and retired public sector employees, more than a dozen of the state’s public worker unions filed suit. A lower court sided with the unions, ordering the state to pay an additional $1.6 billion into the pension funds this year.
Tuesday’s order lets Christie’s administration off the hook from coming up with the additional payments, but the pension gap will continue to plague the state and restrain spending. New Jersey’s pension system is currently $80 billion in the red. Even after a state judge found in February that Christie is obligated to fulfill his payments promise, he proposed further cuts to the pension system. A state bond sale disclosure last year reported that the state’s unfunded liability had increased by almost $30 billion since 2011 and projected that six of New Jersey’s seven pension funds will go broke by 2027. The state’s fiscal situation has led to nine credit downgrades during Christie’s tenure.
But the governor isn’t entirely in the clear — the unions have already filed another suit against the governor for shorting the pension contributions by $1.8 billion in his proposed budget for the coming fiscal year.