With New Jersey’s fiscal health and his presidential aspirations on the line, Gov. Chris Christie outlined part of a plan Tuesday for fixing the state’s retirement system, a day after a judge punched a hole in his push to divert money from it to help balance the state budget.
In his sixth budget address, Mr. Christie informed state lawmakers in Trenton he had struck an “an unprecedented accord” with the state’s largest teachers’ union “on a ’Road map for Reform’ to solve our long-term problems with the pension and health benefit systems.”
The road map calls for freezing the current pension system and creating a new one that is less generous in benefits, reducing costs over the long haul.
“Inaction is unacceptable,” Mr. Christie said. “Repeating the mistakes of the past would be irresponsible.
“Let me be very clear about that because there are politicians, some who may be in this very room, who will tell you that we don’t need further pension and benefit reform. They will tell you that this will just go away if we ignore it. They will tell you that this is solvable if we just raise taxes. But we cannot tax our way out of this problem,” he said.
“By putting forward new solutions to age old problems, we are creating a national model,” Mr. Christie said.
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Before the speech, the New Jersey Education Association said it is making a good-faith effort to find common ground with Mr. Christie, but made it clear that “we have not yet agreed to anything.”
The call for action from Mr. Christie comes after a judge sided Monday with public employees who sued the Christie administration over its plan to siphon $1.57 million away from the retirement system to help plug a hole in the budget.
Superior Court Judge Mary Jacobson said the move violates state employees’ contractual rights under the 2011 pension overhaul that Mr. Christie hammered out with the Democrat-controlled legislature and has since touted as part of the “New Jersey comeback.”
The law requires workers to pay more for their benefits in exchange for the state gradually increasing its contributions to the system.
“The numbers do not lie and let me tell you this, we don’t need any court to tell us we have a serious problem,” Mr. Christie said Tuesday.
He also defended the 2011 pension law.
“Without these reforms, the system itself would already be close to broke,” he said, reminding lawmakers that he inherited the problem from previous governors and legislatures.
“These false promises and a failure to pay into an ever-growing system have put us in a position where the system is underfunded, and the payments necessary to catch up will destroy our ability to invest in our children’s future,” he said.
Still, the ruling on Monday threatens to jeopardize Mr. Christie’s presidential aspirations and adds to his growing list of high-profile headaches, including the demise of Atlantic City.
A poll released this month by the Eagle Institute of Politics at Rutgers University found that his favorable ratings had dropped to an all-time low in the state, with voters citing the “bridgegate” scandal and his presidential ambitions.
Mr. Christie is scheduled to appear this week at the annual Conservative Political Action Conference, where a year ago he said that elected leaders in Washington could learn a lesson from the way New Jersey tackled the pension problem.
He also said that in 10 years the same public employees that “hate me now” will be “looking for my address on the Internet to send me a thank-you note for saving the retirement for you and your families.”
Later that year, with state revenues falling short of projections, Mr. Christie rolled out his plan last summer to slash more then $2.4 billion in scheduled pension payments over two years.
And he followed through on his promise not to raise taxes, vetoing Democrats’ plans to raise taxes on millionaires and businesses to help fill the budget gap.
In June, Judge Jacobson sided with Mr. Christie, ruling he acted properly by reducing payments by $900 million for the fiscal year that ended on June 30.
But Judge Jacobson also warned that the public employees could continue to fight against further cuts. She ruled Monday that Mr. Christie could not divert another $1.57 billion in payments to the system, rejecting the state’s argument that the law is unconstitutional.
Holly Shulman, spokesperson for the Democratic National Committee, said Mr. Christie’s presidential ambitions have hurt his state.
“Chris Christie’s consistent focus on self-promotion instead of what’s best for his state has resulted in a lagging New Jersey economy and a disastrous budget crisis,” Ms. Shulman said. “He even refuses to consider asking millionaires and big corporations to pay a little more in order to ease New Jersey’s fiscal crisis, because of how it would play with the GOP base he is attempting to court for his presidential run.”
• Seth McLaughlin can be reached at smclaughlin@washingtontimes.com.
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