The New Jersey State Supreme Court on Tuesday reversed a lower court’s rejection of Gov. Chris Christie‘s pension cuts, meaning he will not have to put more money into the state’s pension fund.
“The State made the required contributions in FY12 and FY13, and the Appropriations Act signed into law for FY14 included the required contributions of 3/7 of the ARC. In February 2014, the Governor released the FY15 proposed budget, which also included funding to satisfy the State’s required payment,” the court said in its ruling.
“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,” it added.
Last year, Christie slashed $1.6 billion from the state’s fiscal 2015 public pension contribution.
Christie argued that the state cannot afford it, that the law does not demand the full payment and that the court should not wade into budget decisions.
Unions for workers say that Christie is bound by the law he signed and note that workers are paying more for their retirement benefits.
The cuts prompted lawsuits by public sector unions and retirees, who won in lower court when a state judge decided that 2011 pension reforms created a contractual right obliging the state to pay its fair share into the retirement system.
The ruling could bolster both Christie’s presidential aspirations and the state’s tight budget. The state’s pension system has about $83 billion of unfunded liabilities and was funded at only about 44 percent in fiscal 2014.
—Reuters and the AP contributed to this report.