In a battle royale with huge stakes in late February the NJ Superior Court upheld the unions’ claim of pension contract impairment. It ruled that the governor had to make a full contribution to the pension fund by adding an additional $1.6 billion to the fund by June 30, 2015. Governor Christie first appealed the decision to the NJ Appellate Court and then asked the the NJ Supreme Court to intervene, to which it agreed. The case now before the Supreme Court focuses on whether the Superior Court’s award remains binding. Gov. Christie is hoping he will get a pass while the unions hope he will not. In the meantime Christie has sought delay and has not engaged with the legislature on a solution, so the unions continue to insist on the full payment per the 2011 law agreed to by both parties.
In the State’s brief to the Appellate Court on March 31 it argues that the Superior Court’s “contrivance of a constitutional right to billions of dollars in annual appropriations trespasses on the Legislature’s power to appropriate, the Governor’s constitutional veto power, and the constitutional right of citizens to ratify or reject all legislative decisions that purport to bind future legislatures and taxpayers with regard to appropriations. The constitution makes no provision for judicial participation in the annual budget process. The decision cripples the State’s ability to deal with pressing societal needs. Now by calling a statutory right “contractual” any given legislature may evade constitutional limits on its power and bind its successors in perpetuity. As time goes by more of the State’s budget will be frozen in this way.”
The unions’ response appears below the fold.
Different parties in support of the unions responded yesterday. The main brief argues: “The Superior Court properly enforced a contractual right to a pension. The intention was that the contractual right and the vehicle to implement that right should not be impaired where duly created by law. The court interpreted the constitution and statute without amending either or creating new rights. The Court’s interpretation does not interfere with the budget process. The enacting law was not creating a new debt nor was it borrowing money, but instead it was guaranteeing that the State would pay down it’s pre-existing obligation through creation of a new payment plan. It did not impermisssibly constrain the Executive’s constitutional veto power as the Executive is checked by the Legislature and the Courts. The Court recognized the Governor has the authority to exercise veto power, but that he must also take care the laws are faithfully executed. The State substantially impaired plaintiffs’ contractual right by failing to meet their contractual obligations. There is some force in the State’s argument that compliance will be costly but as with many other obligations this is not an existential strangling obligation. The Legislature last year had provided a solution which the Governor vetoed.”
The State must respond by Friday and oral arguments are set for May 6.