Pen/Ben Court Hearing at 10:00 am AND Christie Introduces a Distraction

<<10:30 am The hearing webcast should be appearing here shortly in a Windows Media Player.>>

The N. J. Supreme Court will hear oral arguments today on the Pen/Ben case starting at about 10:00 am at the Hughes Justice Complex, 25 Market St., Trenton. Do not expect to find seating unless you have already reserved it. To watch online you can access the live webcast at njcourts.com starting at 10 am. Other outlets will also likely broadcast the hearings.  

On the evening before the court’s hearing, which includes whether the State must make an additional payment of about $1.6 billion into the the pension fund by June 30, Gov. Christie’s office issued a statement. “Encouraging state revenues might provide another $200 million to pump into the public worker pension system this year.” The timing of this announcement seems quite convenient and not coincidental. It makes for a nice headline, but it will not distract the court from the merits of the case. The $200 million is only a small piece of what is due, and “might provide” does not mean “will provide.”

The statement is based on the Tax Collection Report of March 31, 2015 which indicates year to date collections at $18.4 billion are 5.3% above last year. That is good news. However, the report goes on to project revenue for the year at $32.6 billion (a 5.3% increase) which may or may not fully materialize. To achieve the projection revenue for the year, $14.2 billion would have to be collected in the last three months. Such is not impossible as amounts due on income tax are often not paid until April 15 or later. However, with such a large sum due in a few months, any projection is highly speculative.

In effect it is still too early to determine whether $200 million more will be available, and it’s irrelevant to main issue. The issue before the court is the constitutionality of the Pen/Ben law and what payment plan the State must follow. Good try, Governor Christie.

Comment (1)

  1. Bill Orr (Post author)

    the Supreme Court will have to decide whether the 2011 law which both the legislature and the governor passed is constitutional and creates a contractual right, whether the contract has been sufficiently impaired, and if so what steps the court should take to remedy the matter. Superior Court Judge Jacobson had previously ruled the law constitutional and that state should make a full payment by June 30.

    Today the State’s lawyer called the pension payment schedule only “aspirational.” Justice Albin asked if the state’s position is not similar to “bait and switch.”

    Much of the later discussion revolved around the complexity of the remedy and the specific involvement of the courts if underpayments are made in succeeding years. The union lawyer argued that if there is no remedy soon that the court will still have to face the problem when the pension fund nears insolvency. Hence creating a remedy now is reasonable and necessary.  

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