New Jersey’s High Court Hears Christie’s Last Ditch Effort To Avoid Pension Payouts He Promised

Union members carry protest signs as they march outside the Mercer County Criminal Courthouse before arguments Wednesday, June 25, 2014, in Trenton, N.J., over New Jersey Gov. Chris Christie’s plan to use pension payments to balance the budget. CREDIT: AP PHOTO/MEL EVANS
Union members carry protest signs as they march outside the Mercer County Criminal Courthouse before arguments Wednesday, June 25, 2014, in Trenton, N.J., over New Jersey Gov. Chris Christie’s plan to use pension payments to balance the budget. CREDIT: AP PHOTO/MEL EVANS

Not long after New Jersey Gov. Chris Christie (R) took office, his 2011 pension reform deal was heralded as a major, bipartisan success of his leadership. Hopes were high for the governor and he became an early favorite for the Republican presidential nomination in 2016.

But just a few years later, the likely presidential candidate’s signature achievement may end up sabotaging his national ambitions. Attorneys for the governor appeared before the state’s highest court on Wednesday to defend Christie against 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. So the governor appealed the order to the state’s Supreme Court, which heard arguments this week in his last ditch effort to convince the courts that his own pension law is unconstitutional.

During Wednesday’s arguments, one justice asked a lawyer for the state if Christie’s cuts to this year’s pension contributions amount to a “bait and switch” — an effort to strike down part of his pension reform while keeping the part of the same law that imposed higher costs and a later retirement age on public workers.


“You’re making an argument that no contract the state enters is any good or can be enforced,” Associate Justice Barry Albin told the attorney. “You’re also arguing that the state can never be held to its promises.”

In response, the attorney argued the payout part of the law was “aspirational” and is still subject to the legislature’s appropriations.

The justices also questioned union representatives about what priority pension payments should have in the state budget. They asked an attorney for the unions about the implications of the court intervening in budget issues and whether it would have to become involved in future budget disputes as well.

Steve Baker, a spokesperson for the New Jersey Education Association, told ThinkProgress the union is confident that the law is on its side. “The law could not be more clear,” he said. “It creates a contractual right to pension funding. The legislature drafted it that way, the legislature knew that, the governor knew that and the governor signed it.”

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.


In advance of the oral arguments, a spokesperson for Christie said on Tuesday that the state could see an additional $200 million in revenues for this fiscal year, which the governor would put toward the state’s pension contributions. He did not however, explain where the unexpected revenue would come from, and even $200 million wouldn’t come close to covering the amount the unions are demanding in the lawsuit.

State officials are warning that if the unions were to prevail, it would create an immediate budget crisis that would affect future budgets for years.

Even if the court were to issue a definitive order one way or the other, Christie would still not see the end of the pension mess. 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.

The pension lawsuit is just the latest in a series of struggles Christie is facing in his home state. Last week, one of his closest allies plead guilty to his involvement in the scheme to seek political retribution against the mayor of Fort Lee, NJ by creating a traffic jam at the George Washington Bridge. Two others with close connections to the governor were also indicted for their participation and plead not guilty. The governor said Tuesday he would be willing to testify in the trial, but a recent poll found that a majority of people in New Jersey think he was personally involved in the Bridgegate scandal.

The growing list of scandals has also made the governor unpopular in his home state. His approval ratings in New Jersey hit an all-time low last month and a recent poll found that Christie is no longer the favorite among New Jersey Republicans for the presidential nominee.

And last month, Christie proposed cutting Social Security benefits, advocating a similar approach to national retirement systems as the plan that is currently failing in New Jersey. The announcement came on a recent trip the governor took to New Hampshire, one of many efforts he has made to salvage his image in early voting states.