NJ Court Writes Hypocrisy Into Pension Law. Retired Workers Face “Pauperization.”
Updated On: Jun 20, 2015
The NJ Supreme Court: A “staggering loss of public trust.”
The most distressing feature of Tuesday’s state Supreme Court ruling on pensions is its breathtakingly cruel hypocrisy. The majority, in an opinion written by Associate Justice Jaynee LaVecchia, reassures public employment retirees that it is not taking away their pensions but, at the same time, it all but prevents the state from funding those same pensions. Funding those pensions, in the words of the dissenting opinion, is now “optional.”
But there is more to find despicable in the majority’s decision that the state Constitution’s rarely used Debt Limitation Clause–a nearly 200-year-old provision aimed at preventing land speculation by government–prevents enforcement of the law requiring full funding of public employee pensions. The court trivializes the very real financial hardship that will be imposed on public workers now that Gov. Chris Christie and the Legislature can ignore the need to fund pensions. LaVecchia sarcastically dismissed the consequences of the ruling as a “list of horribles” imagined by an “emotional” dissent written by Associate Justice Barry Albin.
It’s clear that LaVecchia and the four other jurists who voted for her ruling have very little idea of what it is like to live as a public pensioner–and even less sympathy. Four of the five were appointed by Republican governors, three by Christie himself who, in his wrecking of the court to twist it to his own ambitions, managed to fire its only African-American member. The fifth vote came from a Superior Court judge on temporary assignment to the state’s highest court.
Let’s be honest about this decision: As in most important court cases, there was no objective search for a mythical right answer stripped of politics. The issues were so technical and so susceptible to varying interpretations that the court majority could easily have found a way to vote on the side of working people who need their pensions by upholding the law.
But, instead, it ruled for the benefit of others who consider cutting taxes the primary role of political leaders.
Clearly, the majority–the Republican-appointed majority–sided with the more affluent. It’s been a bad season for the poor and working class for the last 30 years. The grand march toward Gilded Age inequality moves on with a boost from New Jersey’s highest court.
The saccharin–and patently false– concern for workers found in this decision is maddening. In the very first paragraph of the ruling, LaVecchia wrote:
“The individual members of the public pension systems, by their public service, earned this delayed part of their compensation….That those men and women must be paid their pension benefits when due is not in question in this matter.”
Sorry, but given the rest of the ruling, those words are utter nonsense. By its very decision, the court gives Christie and the Legislature a free hand not to fund the pensions–who will raise taxes on the rich now?– and takes away the employees’ remedy to force their hand. How in the world can the pensions be funded?
Or, as Associate Justice Albin wrote in his dissent, “The majority has not explained how they will be paid when the pension fund is empty.”
The 68-page majority decision digs a deep grave for the law that required Christie and the Legislature to fund the pensions. Paragraph after paragraph concedes the law constituted a contract–not a hard thing to do considering the words “contract” and “contractual” appear incessantly in the language of the statute.
This is from the second paragraph of the decision. The court majority noted that the law–called Chapter 78–”introduced contractual terms in connection with the State’s payment of its annual required contribution to the various pension funds. The contractual terminology creates an expectation that the State would contribute timely, annually scheduled, required payments to the pension funds, thereby addressing the alarming current unfunded accrued liability and restoring the various funds to fiscally sound levels.”
Clearly–and the court concedes this–the law was intended as a contract and both the Legislature and Christie meant it to be enforced as a contract. The workers would contribute more and, in return, the state would fund its share and the retirees would receive the pensions they worked for. Sounds like a contract–and, of course, both the state and federal constitutions forbid government interference with contracts.
But–and here is the con game the majority relied on to shaft public workers–the court unearthed the musty old Debt Limitation Clause to rule that:
“Although plaintiffs correctly assert that a promise was made by the legislative and executive branches when enacting Chapter 78, and morally their argument is unassailable, we conclude that Chapter 78 could not create the type of legally enforceable contract that plaintiffs argue…is entitled to protection under the Contracts Clauses of either the State or Federal Constitutions. The Debt Limitation Clause of the State Constitution interdicts the creation, in this manner, of a legally binding enforceable contract compelling multi-year financial payments in the sizable amounts called for by Chapter 78.”
Got that? The position taken by unions and others who demanded that Christie fund the pensions–as the law required him to do–was “morally unassailable.” Which means, of course, that–in this case at least–morality has nothing to do with the law. Why can’t we have decisions that are both morally and legally unassailable?
So what is the “Debt Limitation Clause”? It’s a clause in the state constitution that prevents the Legislature from committing to annual funding of large expenditures into the future without a public referendum. But that is a simplification. Most of the 109 pages of majority and minority ruling are devoted to discourses about this arcane bit of law. Clearly, two interpretations are possible–because LaVecchia provided one that helped Christie and Albin provided one that helped the workers.
Christie had a majority on the court. He wins.
So what does it all mean? It means Christie and the Legislature might, but need not– under the New Jersey Constitution–fund pensions fully. It’s laughable to imagine a public referendum on public employee pensions. Many in the private sector already have seen their pensions disappear and this would give them the chance to knock down their fellow men and women. The politics of envy, a specialty of Chris Christie. Remember how he called teachers “selfish” because they wanted a raise?
Will current retirees suffer reductions? Impossible to tell now because no one knows what the Legislature will do. But Albin clearly believes the majority opinion will lead to a disaster for men and women working in the public sector. He says the pension crisis is on a “trajectory” that will leave the fund “insolvent.”
Albin wrote that the ruling means “the political branches cannot be compelled to fund the pension system. The dismal logic of the majority’s decision is that the political branches, in accordance with the State Constitution, can let the pension fund run dry and leave public service workers pauperized in their retirement.”
Perhaps the most sickening words of the majority decision came in a passage in which LaVecchia seems to be trying to express some sympathy for those who may very well be “pauperized” by her decision and that of her four colleagues on the court. She wrote: “The loss of public trust due to the broken promises made though (sic) Chapter 78’s enactment is staggering. ”
But so is the loss of public trust in what had been one of the finest state supreme courts in the nation. It, like everything else Christie touches, has been turned to lead and put to the service of his ambitions.
The decision was a tragedy. For public workers. For the court. For those who seek the morally unassailable.