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TRENTON - Senators from both parties introduced a package of bills to cut government pensions and health benefits yesterday, aiming to reduce costs and setting the stage for a battle with public-worker unions.
The plans, which mark Gloucester County Democratic Sen. Stephen Sweeney's first major policy initiative as Senate president, would roll back pension benefits for government workers and teachers, and make public employees at all levels pay 1.5 percent of their salaries toward health benefits, matching what state workers contribute.
Several steps would aim to crack down on perceived abuses. Most state workers would have to put in at least 35 hours a week to qualify for pension and health benefits. Those with multiple public jobs could choose just one for calculating retirement benefits. Sick-day payouts would be capped at $15,000.
The plans would also force the state to live up to its pension obligations. A proposed constitutional amendment would require the state to make its full pension contributions after years of shortchanging or flatly ignoring its payments. Full funding would be phased in over seven years, starting, at the earliest in the 2011-12 state budget.
Sweeney called the plans "unfinished business," noting that many of the ideas were first pitched in 2006, when lawmakers held a special session on property-tax reform. Most were dropped at the insistence of Gov. Jon S. Corzine, who instead negotiated changes with labor unions.
"What you have is obviously a bipartisan effort right now to start fixing some things that are wrong," Sweeney said. "It's about fixing things that are broken."
He said the bills, with Democratic and Republican backing, each had at least 21 cosponsors, giving them all enough support to clear the Senate.
The proposals would affect new hires, not existing workers. That means they would likely provide little budgetary impact at first, though more money would be saved in later years.
Sweeney painted the plans as an attempt to solve the state's long-term health-benefit and pension problems. At a budget hearing last week, nonpartisan legislative analysts said long-range pension and health-care liabilities had swollen to $112 billion, not counting amounts owed by local governments.
Labor unions blamed governors and lawmakers for such deficits.
"Now that the pension system is in an economic mess, the politicians who made the mess are pointing their fingers at the teachers and school employees who tried to prevent it," said New Jersey Education Association president Barbara Keshishian. "We urge parents and all citizens of New Jersey to not let the politicians use the people we all rely upon to educate our students as the scapegoats for their own irresponsibility."
The NJEA, which represents teachers, and the Communication Workers of America, which represents state and local government workers, have been able to fight off the harshest proposed cuts to benefits in the past.
The political dynamics appear far different now. Gov. Christie won election in November on a cost-cutting platform, changing the tone of debate when it comes to government expenses. And where past reform pushes were met by hesitancy from many lawmakers, Sweeney said the bills introduced yesterday have broad support in the Senate, including from the body's top lawmakers: himself, Majority Leader Barbara Buono (D., Middlesex), and Minority Leader Thomas H. Kean Jr. (R., Union).
Christie had little to say on the plans yesterday.
"The governor campaigned on pension and benefits reform. We look forward to seeing more detail as the process moves forward," Christie spokesman Michael Drewniak wrote in an e-mail.
Two lawmakers involved in the process said the governor was eyeing more far-reaching changes, including far more significant employee payments for health benefits, and steps to change the rules for existing workers.
Only summaries of the bills were available late yesterday, and few lawmakers were willing to discuss the measures on the record.
It was unclear when the proposals would be introduced in the Assembly.
"One of my priorities has been to take a hard look at the unfinished property-tax-reform business, and I expect the Assembly Budget Committee will hold a hearing on these bills in the near future," Assembly Speaker Sheila Oliver (D., Essex) said in a statement. "This is an important issue and it requires a thorough review."
The plans will face stiff opposition from labor unions, which argue that rank-and-file employees, from teachers to aides for the disabled, have already made sacrifices for the pension system and are being unfairly targeted.
The NJEA pointed out that teachers in 2008 agreed to increase their pension contributions to 5.5 percent of their pay from 5 percent. Governors and lawmakers, meanwhile, have skipped nearly $6 billion of required pension contributions in the last 15 years, according to the union.
The Communication Workers of America noted that state workers took 10 furlough days last year and deferred a 3.5 percent raise until this year.
"Now these proposals target our members again and attack the very people who have been willing to step up to help," Hetty Rosenstein, CWA's New Jersey Area Director, wrote in a news release. "They reduce modest cost pensions for low and moderately paid workers far more than higher cost pensions for higher-paid workers. That's just unfair."
The CWA also argued the changes would not help save money in this year's budget.
Annual pension payments, if made in full, would cost the state $2 billion to $3 billion this year, though governors have long ignored or underfunded the retirement system, contributing to the state's problems.
Pension reforms have been tried several times in recent years, with limited success. After lawmakers won some small benefit cuts in 2006, Sweeney returned to the issue in 2008 with help from Buono and Republicans. But he still faced opposition from fellow Democrats and Corzine, and scored only modest victories.
He may now have the power and political climate to push through more sweeping changes.
"We just can't afford to punt on the critical decisions that have to be made to avert a complete collapse of the pension system," Buono said.
The proposals would, among other changes, roll back a 9 percent pension increase approved in 2001, require new part-time workers to receive 401(k)-like plans rather than defined benefit plans, and raise the threshold to qualify for a taxpayer-funded pension to $5,000 in annual government pay, up from $1,500 - a low figure that allows some to rack up retirement credits with little work.
To get a pension, new teachers and state workers would have to work 35 hours a week. State workers would have to work 35 hours a week to receive state health benefits; on the local level, the minimum would be 25 hours.
Other changes are aimed at preventing late-career pension boosts by calculating retirement payments on a workers' top five years of salary, rather than three.
Contact staff writer Jonathan Tamari at 609-989-9016 or jtamari@phillynews.com.
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