Inquirer Editorial: If bombast were billions

Back in 2011, Gov. Christie bragged that the pension and health benefits deal he had cut with the Legislature was a "model for America." It would save the benefits funds and save the state, and it had a cherry on top: It was the fruit of bipartisan cooperation.

Now Christie is saying the same funds are poised to collapse and bring New Jersey down with them. And if the Legislature doesn't cooperate with his plan to solve the problem, he said at a recent town-hall meeting, "I'll have to take more extreme measures to deal with it."

Such bombast makes one wonder whether the governor is striving to draw attention away from investigations of the epic traffic jam caused by his aides. But the costs of state employee benefits do pose a problem. They eat up more than 90 percent of new state spending in the governor's recently proposed budget, leaving very little room for sorely needed increases in education aid and other programs.

Democratic legislative leaders' refusal to open negotiations on pension reform isn't helping. But neither is the governor's overheated threat to pursue "extreme measures."

Reasonable people on both sides agree that benefits reform can go further. The state can save more, for example, by offering new employees defined-contribution, 401(k)-style plans instead of traditional, defined-benefit plans.

But there will be no solution if Christie doesn't stop pulling fire alarms and suggesting that state workers bear the blame for unfunded liabilities. Governors and lawmakers of both parties endangered the funds by skipping and shaving payments and adding benefits the state could ill afford.

Employees, meanwhile, have paid their share, and they're about to pay more. Under Christie's "model" reform of 2011, police will soon pay 10 percent of their salaries toward pensions, and most state workers will contribute 7.5 percent.

Christie's latest budget proposal would ramp up the state's pension contribution to a whopping $2.25 billion, keeping the other side of the bargain made three years ago. It's a responsible step, but it doesn't make up for years of shortchanging the fund under Christie and his predecessors.

It would be easier for the state to keep its end of the bargain if revenues were stronger. Because New Jersey's economy and employment haven't fully recovered from the 2008 recession, tax proceeds are falling short of projections.

The solution has to come from a combination of more consistent commitment by the state as well as lower benefit costs for future employees. Christie and legislators should seize the opportunity to achieve both in the coming budget negotiations, along with greater participation by those most affected: employees and taxpayers. Now that would be a model for America.