N.J. Assembly passes landmark employee benefits overhaul
Published: Thursday, June 23, 2011, 10:00 PM Updated: Thursday, June 23, 2011, 10:00 PM
More than 8,500 protesters, the most this year, poured into Trenton’s streets today morning with signs, speeches and their trademark inflatable rat. But most had dispersed by the time Democrats emerged from their hours-long caucus meetings where they debated the bill’s details and a separate budget proposal. The Assembly convened for a vote at about 6:15 p.m., more than five hours late, and lawmakers delivered speech after speech on the bill for nearly three hours.
"We cannot afford to put off these needed reforms for another year," said Assemblyman Lou Greenwald (D-Camden), a bill sponsor. "Kicking the can down the road and doing nothing will only require more sacrifice from taxpayers and public workers in the future."
The bill passed the Assembly 46-32 and will be sent to Christie’s desk for his signature. After the vote, protesters in the chamber shouted "Shame on you!"
Unions have blasted the bill for ending their ability to collectively bargain their medical benefits. Health care plans for 500,000 public workers would be set by a new state panel comprised of union workers and state managers, rather than at the negotiating table.
A sunset provision would allow unions to resume collective bargaining after increased health care contributions are phased in over four years.
In addition, police officers, firefighters, teachers and rank-and-file public workers would all pay more for their pensions and health benefits. The bill would also eliminate cost-of-living increases to pensions for retirees and raise the retirement age for new workers.
Supporters of the bill — including Senate President Stephen Sweeney (D-Gloucester) and Assembly Speaker Sheila Oliver (D-Essex) — have said the state needs to cut costs because the pension and health systems are underfunded by more than $120 billion in total.
Christie, who has staked his reputation on shrinking government costs, has called the bill an example for the rest of the country. New Jersey is one of 23 states that have asked employees to pay more for their pensions since the Wall Street financial crisis battered retirement systems in 2008, according to the Pew Center on the States.
The Assembly has been widely expected to pass the bill much like the Senate did on Monday. Democrats voting for the bill have been either from South Jersey and allied with that region’s power broker, George Norcross, or from North Jersey and tied to Essex County Executive Joseph N. DiVincenzo Jr.
Despite opposition from the majority of Democrats who control the Legislature, Sweeney and Oliver scraped together enough Democratic votes to join with Republicans to advance the bill. Assemblyman Joseph Cryan (D-Union), a union ally, called it "one of the most stunned and disheartening times" of his career.
Today’s union protest, like other recent demonstrations, did nothing to stop the bill. But it did highlight the growing fissures in the state Democratic Party, which has struggled to counter Christie.
While Sweeney and Oliver were inside the Statehouse pushing the bill, the chairman of the state party, Assemblyman John Wisniewski (D-Middlesex), was rallying protesters with two-dozen other Democrats. "I represent the Democratic wing of the Democratic Party," he said.
Bob Master, a leader in the Communications Workers of America, said Democrats should not be "collaborating" with the right-wing Christie administration. Protesters drove down State Street in a hearse carrying the "soul of the Democratic Party."
Later, on the Assembly floor, Republicans heaped praise on Oliver while her Democratic colleagues condemned the bill.
Assemblyman Joseph Malone (R-Burlington) said Oliver showed courage to stand against her party, saying "I’ll remember your actions for the rest of my life."
Sweeney, who has urged cuts to public worker benefits for years, said the legislation would help save the state’s overburdened retirement system.
"Nobody is talking about how we protected 800,000 people’s pensions," he said today. "I don’t apologize for that."
The state Treasury estimated today’s bill would save $3 billion in health benefits over the next 10 years and $120 billion in pension costs over 30 years. Much of the pension savings are from the controversial elimination of the cost-of-living adjustments for retirees, which unions have threatened to challenge in court.
Over the years, lawmakers and local leaders from both parties have offered increased benefits to public employees, often in exchange for political support. But even as benefits improved, the state and municipalities failed to meet its financial obligations. Since 2004, the state has not made $15.11 billion in required payments to the pension funds, while the municipalities have skipped $1.9 billion. Public employees, meanwhile, have fully paid their required contributions.
As a result, the state has a $54 billion shortfall in its pension system, among the highest in the nation. New Jersey’s health benefit system is in even worse shape than the pension fund and is the most poorly funded in the nation at $66.8 billion in the hole, according to the Pew Center on the States.
By Chris Megerian and Jarrett Renshaw/Statehouse Bureau
Christopher Baxter, Megan DeMarco, Ginger Gibson and Salvador Rizzo contributed to this report.
Previous Coverage:
• NJ unions rally in Trenton, Assembly votes on pension and health benefit overhaul - live coverage
• N.J. public workers to stage large protest over pension and health insurance reform
• Effort to cut N.J. public worker benefits advances despite 'revolutionary' opposition
• Health and pension overhaul clears N.J. Assembly Budget Committee
• N.J. Senate approves pension, health care reform bill
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TO BRIGHT COLLEGE STUDENTS WHO ARE CONSIDERING BECOMING NEW JERSEY TEACHERS: Please reconsider. Teaching in New Jersey is no longer attractive.
Your raises each year will be small, due to the 2% property tax cap. Your raises will not be enough for you to stay ahead of inflation. You could be nearing age 50 by the time you reach the top of your school's salary scale.
You will no longer have good benefits. You will have to pay up to 30% of your health care premiums, which will cost you thousands every year. There is nothing keeping the insurance companies from jacking up these premiums every year.
You will have to pay more into the state's pension fund. Currently teachers pay 5.5% of salary into the fund, but in a few years you will have to pay 7.5%.
At age 55, after you've taught for 33 years, you may be ready to retire. The retirement age is now 65, however, and you will pay a 30% penalty in your pension if you retire at 55. You probably won't be able to afford this penalty, so you will have to keep teaching for years beyond when you wanted to retire.
When you finally complete your 43-year teaching career, at age 65, you may not be able to collect your pension. The pension fund has been ignored and mismanaged for 17 years and the money may not be there for you.
If you do get your pension, you will see no cost-of-living increases in retirement.
Teaching in New Jersey is no longer attractive.
Bottom line: Seek a job in the private sector if possible.
If you must be a teacher, teach in another state.
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For 10 years they robbed, or in the words of our esteemed governor, "They stole" the pension funds of billions of dollars and spent the money on things they should not have by law. They gave our towns "Pension Holidays" and allowed them to skip their required payments for their employees, in an effort to lower property taxes. Now they decalre the pension system is unsustainable and needs a major overhaul or it will fail. Our governor grandstands throughout the state and he gets the public to buy into his b.s. that the public worker is to blame for all of the State's fiscal woes and they buy it, hook, line and sinker. If you had just kept your hands out of the cookie jar and made your legally required payments into the system this would have never happened. But all of you teacher, firemen, cop and public worker haters keep believing the b.s. they're feeding you.
This is the truth not like the fairy tale the governor and his buddies have been reading to you.
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