Posted on Fri, Jun. 13, 2008
New Jersey lawmakers advanced six proposals to trim public employee benefits yesterday, taking the first formal steps in a plan its sponsors say will help dig the state out of its $25 billion pension deficit.
The most far-reaching bills would bar newly hired, part-time workers from the state's health plan and its most generous pension package, shifting them instead into a 401(k)-style retirement plan. They would also require workers with multiple government jobs to choose one when calculating their pensions.
"What [the bills are] really designed to do is prevent the gaming and abuses of the pension system," said Sen. Barbara Buono (D., Middlesex), chairwoman of the Senate Budget and Appropriations Committee.
She said the pension system was designed for workers who dedicate themselves to government service. But workers who build pension credits with part-time jobs can earn large retirement payments with late-career raises.
The plan, which has support from both Democrats and Republicans in the Senate, advanced out of the State Government Committee despite furious objections from labor unions representing state and local government workers and school employees across New Jersey. They characterized the cuts as an attack on employee pensions without the benefit of negotiations.
"The members of the New Jersey Education Association and public employees are truly being used as pawns and as scapegoats for many of the Legislature's mistakes and missteps of the past," NJEA President Joyce Powell said in a hearing room packed with union members wearing matching red, white and purple T-shirts. "You have drawn your line in the sand, and we are here this day to draw ours."
As she spoke, Powell's words played on speakers outside the Statehouse, where union members rallied and cheered. Some wore white hats that read "Back Off."
While the pension changes would affect new workers, and not current employees, Lynn Cianci, a cafeteria cashier at Washington Township High School, shook her head with disdain when asked if she felt reassured.
"If they get the newcomers, we're not going to be far behind," Cianci said at the rally.
The plan comes as lawmakers consider Gov. Corzine's proposal to offer buyouts to state workers, a move that would save money in the forthcoming state budget but add new long-term pension costs.
"The budget is a fraud if we don't replace increased costs associated with early retirement with savings from these pension reforms," Buono said.
Corzine spokesman Sean Darcy said the bills should not be linked with the budget.
"This reform package is separate and apart from next year's budget and provides it with zero savings," Darcy said.
He added that Corzine "is looking forward" to working with the Legislature on pension reform as long as they don't have "unintended consequences."
The state faces a $25 billion, and growing, pension deficit and a $58 billion gap for long-term employee health costs. The two expenses consume more than $2 billion a year of state money, an amount that exceeds the combined cost of proposed budget cuts to municipalities, hospitals and colleges.
"All we're doing is funding government and we're not funding programs that are important to us, like higher education, like health care," said Senate Majority Leader Stephen Sweeney (D., Gloucester), a leading proponent of pension changes.
Sweeney has said the proposed reforms would save roughly $300 million over 15 years.
Labor unions, however, argued the problems were caused by lawmakers and governors who for years put little or no money into the state's pension fund.
Carla Katz, president of the Communication Workers of America Local 1034, said the reforms targeting part-timers would hurt low-income employees such as school bus drivers. She chastised lawmakers for proposing benefit changes a year after the state and CWA agreed to a four-year contract.
Senate President Richard J. Codey (D., Essex) said the full Senate would likely vote on the pension plans the same day the state budget is considered, later this month.
Assembly Speaker Joseph J. Roberts Jr. (D., Camden) said he supports the "concept" of pension reforms but would wait for Senate action before the bills move in his House.
Along with the changes for part-time workers, other parts of the package would fight pension inflation by changing the way pensions are computed.
Contact staff writer Jonathan Tamari at 609-989-9016 or jtamari@phillynews.com.