TRENTON - A package of public-employee pension and benefit cuts expected to save hundreds of millions of dollars in the coming fiscal year and billions over a longer period was signed into law by Gov. Christie yesterday, 35 minutes after winning final legislative approval.

"Today is a great day for the taxpayers of the state of New Jersey," Christie said at an evening ceremony as he approved the bills, the first legislative action he has signed into law.

The signing ceremony came after the Assembly overwhelmingly approved the three-bill package that had cleared the Senate in late February.

The changes will cut retirement payments for future workers by 9 percent, make all public employees start contributing 1.5 percent of their salaries toward health-care premiums, cap payouts for unused sick time at $15,000, and make changes intended to thwart pension abuses. Except for the health-care contributions, most of the major changes will affect new hires only.

Two of the three bills will combine to save the state $8 billion over the next 15 years, Christie said.

Christie has called for even further cuts. Last night, however, the governor and legislative leaders focused on yesterday's action, which ended a long and bumpy ride for several controversial proposals first proposed in 2006 but stymied by a lack of support and fear of political backlash from public-sector labor unions.

Lawmakers from both parties praised yesterday's approval and signing of the legislation as a sign that Democrats and Republicans could work together.

Senate President Stephen Sweeney (D., Gloucester) called the votes "a big victory for the state of New Jersey," saying the health-care law would save local governments $314 million in the coming fiscal year.

Those savings will translate into property-tax relief, said Senate Majority Leader Barbara Buono (D., Middlesex).

Because the changes mostly affect new hires, however, much of the savings will be seen in later years and will not immediately do much to close a $46 billion shortfall in the state's pension funds.

Labor unions opposed the measures, saying that most public workers earned modest salaries and had been unfairly blamed for the state's financial problems.

Assembly Speaker Sheila Oliver (D., Essex) said she urged fellow Democrats to think about the best interests of all the state's residents.

"We did that today," Oliver said.

The measures passed with almost no legislative opposition, moving swiftly from introduction to law in six weeks. But the day still had its share of backroom drama as Assembly leaders initially planned to delay a vote on the most sweeping piece of the three-bill package, citing questions about a relatively-minor provision.

The move surprised the bills' supporters, who had seen the reforms sail through the Senate without a single "no" vote.

The controversy centered on S-2, the most far-reaching of the pension and benefit proposals. The bill bars part-time public employees from the existing pension funds and rolls back a 9 percent pension increase granted in 2001. To fight potential abuses, the measure also requires that retirement payments be calculated on a workers' top five years of salary instead of three and that pension amounts be based on a single job, ending the practice by which some workers build up large payouts by cobbling together numerous smaller positions.

As Assembly Democrats gathered before the votes, however, several objected to a piece of the bill that would let newly hired workers opt not to receive a government pension.

They echoed concerns, first raised by public-employee labor unions, that the provision would sap the retirement funds because workers who opted out of the system would not contribute to it.

Early in the afternoon, that objection threatened to stall the bill. Early in the afternoon, that objection threatened to stall the bill. Oliver told reporters that it would not be taken up and might return in May.

Then she was called to Christie's office, along with Sweeney, and a compromise was reached. The opt-out provision was dropped.

Oliver said Assembly members had concerns about the pension funds' solvency. Sweeney and Buono called the amendment "minor." Sweeney noted that the provision was not part of the plans first proposed in 2006, and so was different from the rest of the package.

The measures had strong support from Republicans.

"These bills will make the state more affordable for all the citizens who are proud to call this great state home," said Senate Minority Leader Thomas Kean Jr. (R., Union).

Contact staff writer Jonathan Tamari at 609-989-9016 or