Judge clears the way for cutting payments to N.J. pension system

A New Jersey judge has ruled that Gov. Chris Christie can cut the state’s contribution to the public employees pension system in the current budget year ending Monday.

Judge Mary Jacobson Wednesday denied a request for a preliminary injunction sought by 12 unions claiming that a pension system overhaul enacted three years ago required full pension payments.

The governor’s action to reduce the contribution and maintain funding for essential services was reasonable and necessary because of a billion-dollar budget shortfall, she said.

“The court finds that Executive Order 156 is justified for fiscal year 2014 by the broad economic and social interests that permit the impairment of contracts,” she said.

Union officials say they’re disappointed with the ruling, but are pleased the judge did not dismiss their entire case.

And Hetty Rosenstein, New Jersey director of the Communications Workers of America, said she found a silver lining in the ruling the reduced payments are a contractual impairment for public employees.

“That, to me, was hopeful … and we did know in any case that that we would be litigating this, Rosenstein said. “We’re going to move forward. We’re going to do everything we can, and we’re going to protect this pension plan for out members.”

They’re vowing to continue their legal battle against the governor’s planned reduced pension payments for the next fiscal year.

Cutting the payments due this month and next year was the only clear option for balancing the state budget after a surprise revenue shortfall, Christie has said.

Jacobson said she does not believe the executive order to reduce the pension contributions was something the governor did lightly.

“He was put between a rock and a hard place, in my view, and he went about making the prioritization of expenditures that he believed was required by him under the emergency powers given to him for budget reserves,” she said.

Senate President Steve Sweeney said legislative leaders were disappointed in the ruling “and certainly disagree with the outcome.”

The Democrat-controlled Legislature is advancing a budget plan that calls for tax hikes on corporations and high-earning individuals rather than the pension payment cuts.

That plan, Sweeney said, “keeps our commitments to retirees and middle-class New Jersey families regardless of the governor turning his back on them.”

Through a spokesman, Christie said he was pleased with Jacobson’s ruling.

“This was one of the hard choices the people of New Jersey expect me to make, and I am pleased the court recognized the necessity and urgency of this decision so that we can provide key funding for our schools, our colleges, our hospitals and other essential services,” he said.