Budget showdown in Trenton

June 12, 2008 1:33:53 PM PDT
Senators on Thursday advanced plans to cut taxpayer-paid retirement benefits for new employees despite protests from hundreds of teachers and government workers who descended upon the Statehouse. Teachers and state and local government workers jammed into a hearing room and protested outside as a Senate panel approved bills that would bring cuts for new employees.

Supporters contend the measures would save taxpayers hundreds of millions of dollars and help pay for state worker retirement incentives that are a central part of Gov. Jon S. Corzine's $32.8 billion budget proposal.

"The budget is a fraud if we don't replace increased costs associated with early retirement with savings from these pension reforms," said Senate Budget Chairwoman Barbara Buono, D-Middlesex.

Legislators and Corzine have until July 1 to adopt a budget.

Corzine and legislative leaders met Thursday to discuss the budget but reached no agreement.

The bills can now be heard by the full Senate. Senate President Richard J. Codey, D-Essex, predicted that would happen before month's end.

Unions representing teachers and government workers vowed an aggressive fight to kill the bills, a move that could possibly make it more difficult to adopt a budget.

"You are willing to punish hundreds of school employees, many of them the lowest-paid people with the smallest of pensions, to make political hay," said Joyce Powell, president of the New Jersey Education Association, the state's largest teachers union.

The legislation proposes:
- Basing pension calculations on a five-year average instead of three years.

- Requiring people with multiple public jobs to collect only one pension.

- Eliminating pension and health benefits for part-time employees.

- Allowing the state to offer incentives to workers to opt out of health benefits.

- Prohibiting state pension system credit for out-of-state service.

Police and firefighters wouldn't be affected.

New Jersey's pension fund faces a $25 billion deficit, and the state is obligated for $58 billion in medical benefits for retired government workers.

Public worker benefits costs have been cited as a leading reason for New Jersey's highest-in-the-nation property taxes that average $6,800 per homeowner, and other state budget woes.

"State government has serious problems and we need to fix them," said Senate Majority Leader Stephen Sweeney, D-Gloucester.

Carla Katz, president of Communications Workers of America Local 1034, which represents about 10,000 state workers, called the bills "extremely offensive."

Unions contend the proposals would break contracts agreed to last year under which they contribute more money to their pensions and health care.

"They violate the principles of collective bargaining, principles that we hold very dear," Katz said.

Assembly Speaker Joseph Roberts Jr., D-Camden, said Assembly leaders would watch how the bills proceed through the Senate.

"We will be prepared to consider them when they're considered by the Senate," Roberts said. "We need to see what the finished products look like, but I've said all along that I support the concept and need for pension reform."