Christie's Sleight of Hand on Pension Payments | Opinion
Posted On: Jul 20, 2015
NJ.com - According to the Office of Legislative Services, beginning in July 2013 the Christie administration diverted the increased public employee pension contributions, mandated by his 2011 pension reforms, to municipalities and counties to reduce their normal cost of employer shares into the state pension funds.
The net result was less money from employers was going into the state pension funds and public employees were funding tax relief for everyone else in the state.
Gov. Chris Christie may have found a proposed millionaires tax unacceptable, but taxing middle class residents, who happen to be public employees, with involuntary paycheck withdrawals was completely palatable.
After Chapter 78 pension reforms were passed in 2011 the governor had the 1.5 percent increased employee pension contributions deposited into the pension funds as employee contributions just as everyone believed and common sense dictated.
In 2014, the OLS reported the governor changed his mind and applied the 1.5 percent toward offsets given to municipalities, counties and the state to reduce the employer contributions. This change also reduced the state's contribution by $93 million for 2014 and $153 million for 2015. It also enabled municipalities to contribute less toward the pension funds and use the savings for other local services.
Christie wanted to be seen by the National Republican Party as a tax cutter and tough on public employee unions, but in fact he actually raised taxes on a half million N.J. residents who just happened to be public employees.
The legislature, led by the Democrats, reacted by passing Assembly bill A-3310 last June. The bill's wording required "the increased employee pension contributions resulting from 2011 Chapter 78 reforms will be credited as additional contributions to those retirement systems and will not be used to reduce normal contributions of the state and the other public employers."
In other words, the new law required the 1.5 percent to remain in the pension fund as additional contributions and could not serve as a rebate. This bill was scheduled to take effect July 1, 2015. Gov. Christie vetoed the bill.
The bill passed the legislature along party lines with most Republicans voting "no," meaning they supported diverting employee pension contributions and continuing the public employee funded rebates to municipalities and counties.
Remarkably, some of these GOP legislators who had voted for the pension reform law of 2011 were now undermining it. Assemblyman Declan O'Scanlon (R-Monmouth), a sponsor of the 2011 pension reform law, voted against making sure the 1.5 percent stayed in the pension funds. One has to ask what he was sponsoring in 2011.
After the state Supreme Court voted in Gov. Christie's favor, allowing the governor to underfund the pensions, O'Scanlon said, "The courts can't order me to do something that's not in the best interests of my constituents". O'Scanlon must not consider police officers, teachers and municipal workers within his district part of his constituency, but rather sees them as an additional funding source.
Public employees were told by Gov. Christie the 2011 pension reforms would save their pensions. The governor reneged on his promise of making the seven-year graduated pension payments when his unrealistic tax revenue projections didn't materialize and defiantly stated he had no "Plan B." Now, apparently, according to the OLS, the governor hasn't kept his promise to keep the 1.5 percent increased employee contribution in the pension funds.
One has to wonder how serious a pension crisis there is if the governor can grant offsets and rebates to employers thereby reducing overall pension contributions.
When bashing public employees and pitting the private sector against them, the governor and his like-minded legislative loyalists never refer to public employees as residents, taxpayers or even voters.
Voters, including public employees, will have a chance to change that perception this November.
Edward Buttimore is a former administrator of investigations for the N.J. Attorney General's Office, Criminal Division.