Christie signs bill on public-worker pension, health payments

TRENTON - Flanked by his "partner" Democratic State Sen. Stephen Sweeney and a bipartisan group of more than 60 mayors, Republican Gov. Christie signed a bill into law Tuesday that will require hundreds of thousands of public workers and retirees to pay more for their pensions and health benefits.

While the moment will go down as a highlight of Christie's term, the spirit of political unity is unlikely to last long.

At the signing, Christie and Sweeney even joked that they would be at each other's throats within hours over the wide gulf between their plans for the state budget, which must be adopted by Thursday.

"I don't think we'll compromise as much tomorrow, or this afternoon," Sweeney said, smiling, at the Trenton War Memorial.

One of the biggest questions about the budget showdown is whether Christie will accommodate any of the Democratic legislators' proposals in exchange for their handing him the benefits victory. By late Tuesday night, such a possibility seemed unlikely.

A letter obtained by the Associated Press from state Treasurer Andrew Eristoff to Democratic leaders warns that Christie would be unable to sign the $30.6 billion budget the Legislature is expected to pass Wednesday because it appropriates more money than the state is expected to take in.

"The revised budget introduced in the Legislature and passed out of the Assembly and Senate Budget committees . . . violates this constitutional standard as well as fiscal reality," the letter said. "This budget is not just irresponsible, but ultimately creates a deficit that violates the state's constitutional obligation to have a balanced budget."

If budget-balancing issues are not resolved, the letter said, Christie "will have no choice but to avail himself of the full range of the constitutional remedies available to him."

Christie set up a fight with Democrats when he took the unusual step Friday of certifying state revenue for fiscal 2012 before he had even received the Democrats' spending plan. The figure he certified came in $300 million lower than the number used in the Democrats' budget.

The nonpartisan Office of Legislative Services projected in May that the state would receive $913 million more in taxes than the governor projected at the time of his February budget message, compared with the treasurer's forecast of $511 million. Christie's certification hinges on the latter number, while Democrats have settled on a compromise figure of $800 million.

Christie's argument is that the $800 million figure would yield an unconstitutional, unbalanced budget.

The fight over how much revenue is available is all the more pressing because the state has sought a $2.25 billion bridge loan that might be used to help pay operating expenses in coming months.

Christie is likely to veto many line items in the budget, but can use that power only to reduce spending or remove provisions.

He also is widely expected to veto a separate piece of legislation, the so-called millionaire's tax, that would increase the tax rate to 10.75 percent on income over $1 million, up from 8.97 percent. The rate would not be applied to retirement income up to $100,000 for residents 62 or older.

Legislative analysts have projected that tax increase would bring in $613 million in increased revenue. Democrats want to direct most of that money to fully fund every school district in the state.

In 1992, when opposing parties controlled the legislative and executive offices, the GOP had the votes to override Democratic Gov. James J. Florio's veto of their budget.

But the Democrats do not have a veto-proof majority, and Republican lawmakers are certain to support Christie's budget action.

Democrats did not sponsor their own budget in 2010 and gave the governor most of what he wanted. But this year, with all 120 legislative seats up for election, they have crafted an alternative plan that is $1.2 billion larger than the one Christie originally introduced and restores cuts to education, health care, and social programs.

The budget fight was put on pause, though, for Tuesday's bill signing, when Christie spoke at length about how the landmark health-benefits and pension legislation would have gotten nowhere without Sweeney's leadership.

"Senate President Sweeney has done something that is very rare in public life today," Christie said. "He was able to erode just a little bit of the cynicism that the public has about public life."

Sweeney already is feeling blowback from supporting the law, which affects police, firefighters, teachers, and other public workers. On Tuesday, one liberal group launched SweeneyNotMyLeader.com, where Democrats can pledge never to support Sweeney for governor, should he run.

Christie also praised Assembly Speaker Sheila Oliver (D., Essex), who moved the bill through despite opposition in her caucus. Oliver did not attend the signing, due to what Christie called a scheduling conflict.

By next summer, taxpayers "will start to see some real effects on property-tax bills" - the result of the new legislation, plus recent laws that cap property-tax increases at 2 percent and limit employee raises awarded through binding arbitration, Christie said.

State officials have said the health-benefits measure will save local governments just $5 million in the first year of the four-year phase-in.

From his Statehouse office, Christie said he could hear the union protests leading to the bill's passage.

"I felt for those people because their union leadership had so ill-served them by the lies and purely political kind of language they were using to try to characterize what was going on here," he said.

The Communications Workers of America, New Jersey's largest union representing public workers, fired a salvo of its own Tuesday.

Democrats who favored the legislative approach to increasing workers' health-care payments, rather than allowing the issue to be addressed through collective bargaining, have "abandoned the middle class and [their] own core values for the sake of a political backroom deal," said Hetty Rosenstein, the union's state director. "The party which once stood for workers' rights has torn itself apart under the leadership of self-interested political bosses."

Leaders of various unions have charged that political power brokers such as George E. Norcross 3d of Camden County had undue influence on the bill. Without the Democrats in Norcross' sphere of influence, the bill would have died.

Asked if he spoke to Norcross in the course of negotiations over the bill, Christie said: "I spoke to a lot of people, absolutely. My job was to try to build consensus and get this thing done, so anyone who I thought had influence over the 120 members of the legislature, I spoke to."

Christie said he expected the law to be challenged in court.