 Feb. 8, 2010 You know, this $11 billion or so deficit might in the long run be the best thing that ever happened to New Jersey. Can you imagine any other event that would bring Democrats and Republicans together to overhaul the state's pension and health benefit system? We're still waiting on details, but the Star Ledger reported Sunday that Gov. Chris Christie and legislative leaders are going to unveil sweeping new reforms, to include: 1) Requiring all current public employees to contribute at least 1.5 percent of their annual salaries toward their health benefits, and all future retirees to contribute at least 1.5 percent of their base pension to their health benefits. State employees were required to contribute at that rate beginning in 2007 under then-Gov. Jon Corzine, but many local governments and school districts do not require any health care contributions. The minimum threshold would be incorporated into upcoming local contracts, and governing bodies could try to negotiate it higher.2) Offering for voter approval a constitutional amendment forcing the state to fully fund its pension obligations in each year’s budget. While the requirement would not yet be in effect, a full payment for the upcoming budget would be about $2 billion out of a budget in the $28 billion range. Payments have dwindled to cope with budget woes, including Corzine eliminating this fiscal year’s contribution entirely. Corzine also allowed local governments last year to postpone part of their pension payments, arguing that covering the full cost would drive up property taxes in a recession. 3) Changing how pension payments are calculated, and who qualifies for a pension, for future employees at all levels of government. That includes repealing a 9 percent increase in benefits put in place in 2001, factoring in the highest five years of salary instead of three years to determine pension payouts, and banning part-time workers from participating in the pension system. State employees would have to work 35 hours a week and local employees 32 hours a week to qualify. 4) Enrolling future part-time employees at all levels of government in a defined-contribution plan instead, and raising the minimum annual pay to participate to $5,000 from $1,500. Current part-timers would continue in the pension system as long as they remain continuously employed. 5) Capping payouts for unused sick leave at $15,000 for all public employees, mirroring the limit already in place at the state level, and limiting stored vacation time. Retirement packages have sparked taxpayer outrage, including a 2008 deal to give a former Keansburg superintendent $740,000 in severance pay, including $184,586 for unused sick leave.
These changes go beyond even what the Legislature was considering in 2006 -- before then-Gov. Jon S. Corzine pulled the rug out from under the reforms by insisting that change needed to be done through contract negotiations. Which of course, was a cover. (Much like his insistence on early retirement, which apparently also didn't live up to its billing in terms of savings, according to the Star Ledger.) But if Christie and Democratic leaders are able to push through these reforms, over the likely objections of union leaders, they will not only go a long way toward fixing the state, but to ensure that public employees will be able to count on the pension they've been promised. Of course, the devil's in the details, and there are many battles to come. But you know what the difference is? It's a key player, who for the first time in years -- maybe decades -- will have a seat at the table. It's the taxpayer, who voted Corzine out of office in New Jersey. And whose cousins shocked the nation in Massachusetts. There's nothing that politicians can't accomplish when they have the people behind them. Even fix the state of New Jersey.
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