Elections

Gov. Christie Faces Supreme Court Challenge Over Pension Cuts

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Republican presidential hopeful Gov. Chris Christie is now facing a U.S. Supreme Court challenge with New Jersey unions arguing in an appeal Tuesday his pension cuts violate state law.

Unions have long argued the 2014 pension cuts were in violation of a contractual agreement the state had to fund pensions. An agreement, the unions note, Christie agreed to himself. In June, however, the New Jersey Supreme Court ruled the pension cuts were legal and did not violate the previous agreement.

Not long after losing the case, unions with the support of some state Democrats, vowed to continue fighting. The appeal was signed by the Communications Workers of America, the New Jersey Education Association and the American Federation of Teachers among others. The Supreme Court, though, does have the ability to accept or reject any case they want.

At the center of the conflict is a 2011 budget provision known as Chapter 78 which legally compelled the state to pay retirement pensions in full. Despite this, in 2014 Christie signed Executive Order 156 which cut pension benefits from the $2.25 billion required to only $681 million. The cuts were to address budget problems the state has been facing.

“Chapter 78 does not create a legally enforceable contract that is entitled to constitutional protection,” the June decision, which was obtained by Watchdog, noted. “The Debt Limitation Clause of the State Constitution interdicts the creation, in this manner, of a legally binding enforceable contract compelling multi-year financial payments in the sizable amounts called for by the statute.”

In its decision, the state Supreme Court overturned an earlier ruling by Superior Court Judge Mary Jacobson that stated Christie acted illegally when he withheld billions in pension contributions.

The cost of retirement benefits and pensions for state employees has been a growing problems in many states, including New Jersey. According to a 2014 report from the New Jersey Pension and Health Benefit Study Commission, pensions will causing the state to face massive debt.

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