Friday, December 19, 2014

After Christie Vetoes, Pension Battle Heads Back To Court

The battle over the adequacy of pension funding in the Fiscal Year 2015 state budget won't end with Gov. Chris Christie's expected vetoes of the $1.1 billion in tax increases passed yesterday by the Democratic-controlled Legislature and his elimination of the pension payments those taxes were designed to fund.

After Christie Vetoes, Pension Battle Heads Back To Court

File photo: The battle over the adequacy of pension funding in the Fiscal Year 2015 state budget won’t end with Gov. Chris Christie’s expected vetoes of the $1.1 billion in tax increases passed yesterday by the Democratic-controlled Legislature and his elimination of the pension payments those taxes were designed to fund. (AP Photo/Mel Evans/March 28, 2014)
File photo: The battle over the adequacy of pension funding in the Fiscal Year 2015 state budget won’t end with Gov. Chris Christie’s expected vetoes of the $1.1 billion in tax increases passed yesterday by the Democratic-controlled Legislature and his elimination of the pension payments those taxes were designed to fund. (AP Photo/Mel Evans/March 28, 2014)

The battle over the adequacy of pension funding in the Fiscal Year 2015 state budget won’t end with Gov. Chris Christie’s expected vetoes of the $1.1 billion in tax increases passed yesterday by the Democratic-controlled Legislature and his elimination of the pension payments those taxes were designed to fund.

That fight shifts next week to the state courts, where a pair of Superior Court judges will decide whether the state must redo its FY15 budget to find the $1.5 billion needed to make the pension payment required by a 2010 law and whether that payment will have to increase to cover the elimination of billions of dollars in cost-of-living increases that an appeals court yesterday declared to be a contractual right of retirees.

Since talks between Christie and Democratic leaders on a negotiated budget broke down last week, the governor and the Legislature have been following a preordained partisan script that allows both sides to make political points to their respective constituencies on taxes, pension funding, and spending priorities.

Both sides know, however, that the end result will be the enactment by June 30 of the budget that Christie wants -- without tax increases on millionaires or corporations, without funding for women’s health clinics and an expanded Earned Income Tax Credit for the working poor. It will, however, cut pension funding cut to $681 million, thus driving up the state’s unfunded pension liability.

Democrats, who passed the budget by a 24-16 party-line vote in the Senate and a 48-31 tally in the Assembly yesterday, know they lack the two-thirds majority needed to override Christie’s vetoes -- although they may call for override votes as a political exercise in order to drive home their belief that millionaires and corporations should pay more, and that the state should keep its pension payment obligations.

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