TRENTON — Following Thursday’s state Supreme Court ruling on cost of living adjustments for state employees, Senate President Steve Sweeney (D-3) defended the legislature’s 2011 legislation allowing the state to delay COLAs for public employees. A reverse ruling could have forced the state to make those adjustments, and increased the state’s unfunded pension liability to $17.5 billion.
That 2011 legislation was the result of compromise between Sweeney, state Democrats and Republican Governor Chris Christie. Asked about today’s ruling at an unrelated State House press conference, Sweeney placed the blame for the state’s liability with Christie’s failure to make statutorily required pension payments and predicted that the COLA freeze will end.
“We have two pension systems that have real problems: it’s the teachers, and it’s the state employees,” Sweeney said. “And the problem is not because of the teachers and the state employees, the problem is because the state didn’t make their payments.”
“We didn’t end it, we suspended it,” Sweeney said of the 2011 COLA legislation. “We suspended it until we could afford to pay it. There’s a difference.
“The way the pension systems are set up, the biggest ones are going to be able to restore the COLAs. We didn’t eliminate the COLAs, that was the point.”
Sweeney is leading the charge on a constitutional amendment that would require the state to make quarterly pension payments, with half payments by 2017 and full payments by 2021. That measure advanced in an Assembly committee this week, with staunch Republican opposition.
Justice Jaynee LaVecchia said on behalf of the 6-1 majority that the state was within its rights to withhold adjustments it can’t afford.
“We conclude that the Legislature retained its inherent sovereign right to act in its best judgment of the public interest and to pass legislation suspending further COLAs. Having determined that there is no contract violation, and because the additional arguments advanced by plaintiffs are not meritorious, we must respect the legislative choice,” LaVecchia wrote.
New Jersey Education Association President Wendell Steinhauer called the decision another in a long line of failures on the state’s part.
“For twenty years, New Jersey’s politicians have failed New Jersey’s public servants,” Steinhauer wrote. “Now, for the second time in two years, the Supreme Court has done the same thing.”