New Jersey's top court sides with Gov. Chris Christie on pensions

TRENTON, N.J. -- New Jersey's top court sided with Gov. Chris Christie on Tuesday in a fight with public worker unions over pension funds.

The state Supreme Court overturned a lower-court judge's order that told the Republican governor and the Democrat-controlled Legislature to work out a way to increase pension contributions for the current fiscal year, which ends June 30.

In a 5-2 ruling, the court said there wasn't an enforceable contract to force the full payment.

One of Christie's signature achievements as governor has been a 2011 deal on pensions for public workers. Employees had to pay more and the government was locked into making up for years of skipped or reduced contributions.

The state agreed to escalating payments over seven years to make up for all the times it has skipped contributions or put in less than what's required to keep the funds healthy. Retirees saw their cost-of-living increases suspended, and current workers had to put in more and had retirement ages raised as part of the deal.

But last year, state tax revenue unexpectedly came in short of projections, setting off a budget scramble.

Christie, who is considering seeking the Republican presidential nomination, solved it by reducing the planned contributions by more than $2.5 billion over the fiscal 2014 and 2015 budgets. Most of that amount - nearly $1.6 billion - is for the current fiscal year. Christie's administration says it intends to put about $200 million in unexpected revenue and nearly $100 million in money that was budgeted this year but is not being spent toward pensions by June 30.

His budget proposal for the fiscal year 2016, which starts July 1, calls for a record $1.3 billion contribution. But even that amount is less than half the $3.1 billion called for in the 2011 deal.

The governor says he has a new plan to reduce health benefit costs and use the savings to stabilize pension funds - but over a longer time. Current workers would also have their defined benefit plans frozen and replaced with 401(k)-style plans.

In court arguments and filings, Christie's lawyers were in the unusual position of arguing that the pension overhaul the governor signed was unconstitutional - or at least it was the way the unions that were suing were interpreting it. An attorney general's office lawyer arguing the case said the escalating contributions were "aspirational," a notion that state Senate President Steve Sweeney disputes.

Christie's lawyer also warned that if the court ruled against the administration, it could be setting itself up for getting dragged into many future budget disagreements.