Christie set to argue his pension law is unconstitutional

When Gov. Christie takes his case to the state Supreme Court this week in a dispute over pension funding, his administration will make a highly unusual argument: that a law the governor signed in 2011 is unconstitutional.

Legal experts say it's a rare approach, perhaps unprecedented in New Jersey.

Lawmakers are closely watching how the Supreme Court will rule; its decision could have significant ramifications for the state budget, for the fiscal year that ends June 30 and for the next.

The law required public workers to contribute more toward their pensions and health plans, raised the retirement age, and suspended cost-of-living adjustments. In return for those concessions, workers were granted a "contractual right" to greater pension funding, which the state was to phase in over seven years.

Unions sued in June after Christie cut the state's pension contribution for the current fiscal year by $1.57 billion amid a revenue shortfall.

"Here's the governor signing a law binding himself and the government to a contract and quite soon thereafter arguing that it's unconstitutional," said Robert F. Williams, a state constitutional law expert at Rutgers-Camden. "I don't think we have much precedent for this, particularly in this context - maybe no precedent."

Typically before a governor signs a law, his counsel, and sometimes the attorney general, reviews the bill. The nonpartisan Office of Legislative Services similarly advises the Legislature on constitutional issues. Thus, if government lawyers had thought the 2011 law was unconstitutional, Christie likely would have vetoed it.

The federal government and other state attorneys general have declined to defend some laws in court. For example, the Obama administration refused to back the Defense of Marriage Act when that Clinton-era law was challenged before the Supreme Court in 2013. The court struck down a key provision that denied federal benefits to same-sex couples.

Some state attorneys general have declined to defend bans on same-sex marriage. And in 2013, the Christie administration declined to defend the state's gun laws on appeal. Rarely, however, do governors argue against bills they sign.

The 2011 law now in dispute helped fuel Christie's rise to national prominence as a Republican who had delivered a blow to unions while working with a Democratic-controlled Legislature in a blue state.

Christie boasted at the 2012 Republican National Convention that "with bipartisan leadership, we saved taxpayers $132 billion over 30 years and saved retirees their pension." Building on the theme, he has made federal entitlement reform a platform of his likely campaign for the 2016 GOP presidential nomination.

The case before New Jersey's Supreme Court, scheduled for Wednesday, stems from Christie's decision in June to cut the state's contribution to the pension system for the current fiscal year by $1.57 billion. He said the state couldn't afford the full $2.25 billion payment.

Public-sector unions sued, alleging Christie had violated workers' contractual rights, which are protected by the U.S. and state constitutions. Mercer County Superior Court Judge Mary C. Jacobson ruled in favor of the unions in February and ordered Christie to work with the Legislature to add to the pension system the money he cut.

The administration argues that pension funding is subject to the annual budget process, codified in the constitution, just like all other non-voter-approved spending.

It also says enforcement of a contractual right to pension funding would violate the constitution's debt-limitation clause, which the administration says requires voters to approve laws that bind future legislatures to appropriations.

And the administration contends the contract language infringes on the governor's constitutional right to veto any line item in the budget.

Speaking at a news conference Wednesday in New Brunswick, Christie said there was no contradiction between his promotion of the law at town-hall meetings and his argument in court.

"The fact is that what we've said is that forcing us to make the payment is unconstitutional," Christie said. "That we have every year budget language that overrides the language" in the statute. "That's all that's happening here. So that's it."

The court could choose a number of remedies. If it orders Christie to make an additional $1.6 billion payment before the fiscal year ends June 30, "we could have a constitutional crisis," said Williams, the law professor.

"The court does not have an army," he noted. To comply with such an order, the Legislature would have to pass a law and Christie would have to sign it.

If Christie refused to do so, the court could hold him in contempt, but it couldn't force a payment.

On the other hand, if the justices agree with Christie that the law is unconstitutional, then public workers who've already contributed more toward pensions and health care may have an argument for demanding their money back.

The state could declare a pension holiday for a few years, Williams said, noting that would "just make the crisis worse."

The pension system for nearly 800,000 active and retired workers has an unfunded liability of more than $80 billion, according to a commission Christie impaneled to study the problem.

The court's ruling will likely inform how lawmakers craft next fiscal year's budget, which must be passed by the Legislature and signed by Christie by June 30. The governor's proposed $33.8 billion budget includes $1.3 billion for the pension system, about $1.8 billion short of what's required by the 2011 law. Democrats have vowed to make the full payment.

"That's really the big elephant in the room: what the courts will rule," said Senate Budget Chairman Paul Sarlo (D., Bergen).