Sen. Connors: Reform Bill a 'Necessary Action'

After a day filled with rallies and protests outside the Statehouse in Trenton, the Assembly has backed legislation that will increase contributions by public employees to their health care and pension costs, now sending the bills to Gov. Chris Christie to be signed into law.

The Assembly voted Thursday evening, three days after the state Senate’s 24-15 vote on the reform bill. Christie is expected to sign the legislation into law Monday.

“Together, we’re showing New Jersey is serious about providing long-term fiscal stability for our children and grandchildren," Christie said in a statement following the vote. "We are putting the people first and daring to touch the third rail of politics in order to bring reform to an unsustainable system."

The bill, A-4133, will require teachers, school employees and state and local government workers to pay an additional 1 percent of their salaries toward their pensions as of July 1, and an additional 1 percent phased in over the next seven years for a total of 7.5 percent.

Police and firefighters will pay an additional 1.5 percent of their salaries toward their pensions for a total of 10 percent, as of July 1.  The bill moves the retirement age for new teachers and non-uniformed employees from 60-years-old to 65. To be eligible for early retirement, the employees now have to work 30 years instead of 25.

Lacey resident Pat Gonzalez, a 32-year secretary at the middle school, said, “It’s upsetting to me that our benefits may be taken away. Most of us here, as opposed to those working in the private district, work for lower salary, and the benefits have always been very important to us.”

Retiring schools Superintendent Richard Starodub said the legislators took perhaps an inevitable step, but called for a greater look into structural reforms.

“I think the government on both sides of the issue, both the Republicans and the Democrats have been working hard, and I think both parties are in a difficult position to repair a problem that has been allowed to fester and get greater over the last decade or so. Number one, the state never made any payments to the pension system, while all the employees were paying, so the employees did their share, but the state did not," Starodub said.

"For this current school year ... all of the employees responded to the governor’s request to take a salary freeze. But [the school board] approved a resolution, asking the governor to freeze our healthcare costs as well. I understand the state asking employees to contribute and I think they’re moving in the direction they have to move in, (but) what no one is talking about (is) why healthcare insurance costs are so high, and maybe even more importantly why they are continuing to increase annually. No matter what people contribute, if the costs continue to rise at that level, the government won’t make any progress. This train has to be stopped," Starodub said.

New Jersey Policemen's Benevolent Association President Anthony Wieners released a statement criticizing legislators who supported the reform bills.

"Today is a day that history will remember as the day the vilification of police and firefighters was complete," he said.  "No matter what public speeches politicians give at ceremonies and parades, this week their commitment was shown in how they voted. To the few politicians who stood up for the brave men and women who protect our communities everyday – thank you.

"Unfortunately there were too few of you to make a difference. Today’s passage marks a milestone where Trenton politicians have undercut the basic fundamental principles of collective bargaining. The collective bargaining process that brought numerous concessions by many local PBA units to local governments over the past two years was wiped out with today's passage."

The bill also requires the state to make its annual payment into the pension system or unions could sue to force the state to make its payments. Christie withheld a $3 billion payment from the pension fund last year, which is underfunded by approximately $54 billion.

Republican 9th District State Sen. Christopher J. Connors, who voted for the Senate version of the bill, said the cutbacks are the right move for the state.

“It didn’t take a prophet to predict we would be in the circumstances we’re in today, given the state’s poor fiscal climate and business climate over the years,” Connors said.

Cutting back payouts was “unfortunately a necessary action” to ensure that the pension systems remain healthy enough to provide the payouts promised to public workers, he said.

“Every actuary comes up with the same thing: that the pension systems are collapsing, that the benefit levels being paid cannot be sustained,” he said. 

Automatic cost-of-living adjustment (COLA) for retired police, firefighters, teachers, state and local government employees in New Jersey's six pension systems was eliminated by the legislation until the state’s pension funds are at least 80 percent funded. Based on state estimates, that could take as long as 30 years.

"Legislators do not seem to understand the impact this legislation will have on retired school employees,” said New Jersey Education Association President Barbara Keshishian via press release.  “Without a cost-of-living adjustment, the purchasing power of their pensions will erode to levels that will cause them terrible hardship at the most vulnerable time of their lives.”

As for workers’ objection to being shut out of decisions usually arrived at through collective bargaining, Sen. Connors said the fact that the Legislature has statutorily bestowed benefits in the past gives it the right to cut back.

“There is a precedent for the state to do things in the interest of fairness,” he said. “I guess in a perfect world, we’d like to think all these things could have been negotiated, but it’s hard enough negotiating compromise within the Legislature itself, let alone everyone else. There are a lot of hands in the process.”

Connors also pointed to what hadn’t changed. The retirement and early retirement ages are the same, he said, as is the 9 percent enhanced pension benefit granted a decade ago. And the changes will allow the Legislature to keep promises made to New Jersey’s longest-serving workers, he said.

“People who are coming into the system right now won’t have the same benefits, but there’s an effort to protect those in the system.”

The reforms will mean major savings for the state, he said – eventually. 

“The immediate savings to the system is not significant in the first year or two years, but once the impact of the reforms are fully felt, we’re talking about tens of billions over the course of the next 20 years,” said Connors.

The cuts are necessary, he said, but it was “unsettling” voting in favor of a bill he knew was a major cause for concern among many.

“You’d like to give everything to everybody, but you can’t,” he said.