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Budget Committee Chairman Questions Legality of Scaling Back Pension Payments

5-22-14

By Michael Aron
Chief Political Correspondent

First they schmoozed. Then they faced off.

The Democratic Senate Budget Committee chairman wanted to know from the Republican state treasurer whether the plan announced by Gov. Chris Christie this week to balance two budgets by cutting way back on the state’s pension payments is even legal.

“Members on both sides of the aisle, before they cast a vote for a new fiscal year budget, are going to want to know that there is some strong-worded legal justification to do this,” said Sen. Paul Sarlo.

“We are doing this because we think is right, appropriate, under the law and in light of all of the circumstances that we’re presented with, I’m confident of that. I am sure that the executive and the state will defend its position vigorously if called upon to do so,” said State Treasurer Andrew Sidamon-Eristoff.

Sarlo chided the Christie administration for backing away from a commitment.

“A lot of folks have been talking it up on the airwaves and around the country how we’re making the largest pension payment of all time and we’ve solved this pension problem, and quite frankly we haven’t solved it,” Sarlo said.

Eristoff pointed out it is either cutting pensions or cutting vital spending.

“We didn’t feel that it was appropriate or necessary under the current circumstances to visit that kind of disruption not only to schools, but to the hospital system, the higher education community, the nursing home industry,” said Eristoff.

It also came out here today that community providers who care for the developmentally disabled, mentally ill and homebound under contract with the state are taking a $13 million cut to help close the budget gap.

Christie has blamed his predecessors for building up the pension problem.

It was actually his ally Kevin O’Toole who introduced the following numbers.

Christie has put $2.3 billion into the system over four years.

Jon Corzine put in more — $2.4 billion.

The McGreevey-Codey years saw $303 million go in.

In Christie Whitman’s second term, the number was $402 million.

In Whitman’s first term, $592 million.

Jim Florio put in $1.9 billion.

Sarlo says what Christie wants to do is breaking a contract.

“We still have a contractual obligation. Contracts and collective bargaining agreements are not that easy to break,” said Sarlo.

They have five more weeks to sort it out.