Employee benefits bill faces final vote in NJ

Union workers rally in Trenton, N.J. on Thursday, June 16th.

June 22, 2011 5:57:41 PM PDT
Contentious employee benefits legislation that has spawned waves of protest at New Jersey's Capitol and jeopardized organized labor's loyalty to Democrats is all but certain to clear its final legislative hurdle Thursday.

The bill requiring 500,000 public workers to pay sharply more for pension and health benefits and suspending bargaining over health care goes before the Assembly on Thursday afternoon.

The bill has the backing of Assembly leader Sheila Oliver, who will muscle it through with help from with Republicans and a smattering of Democrats. It's already cleared the Senate, and Republican Gov. Chris Christie, who has signaled his strong support, is likely to sign it quickly once it reaches his desk.

"Everyone had to compromise to come together. ... (Thursday) is a big day to watch that get done," Christie told constituents at a town hall meeting in Fair Lawn.

"The pensions will be paid, the taxpayers will be protected, the state will be back on the right fiscal course because both parties decided we needed to put political courage ahead of political expediency and finally work for the people who pay the bills," the governor said, inciting an equal number of boos and cheers.

"New Jersey has been using grains of sand to address this problem, but it's going to take boulders put in place to address this," Oliver told The Associated Press. "It's unpleasant, it doesn't have broad bipartisan support. The members of my party do not support this."

Labor is expected to be out in force opposing the bill once again, as it was when the proposal was debated twice in the past week. A 10-foot inflatable rat has been brought along and tethered during each rally to signal the unions' feelings of betrayal.

"We're asking you to stand with us and tell the governor to get out of his cage and bargain (health care) with us," Hetty Rosenstein, state director of the Communications Workers of America, the largest state worker union with 55,000 state and local members, told an Assembly budget panel. "We will save this money (though its giveback proposal)."

The bill requires teachers, police, firefighters and other public employees to pay a portion of their health care premiums based on income. Most workers now pay 1.5 percent of their salary regardless of their health care plan. An employee earning $60,000 who pays $900 toward health care would see their yearly costs rise to $2,056 for single coverage or $3,230 for a family plan, after a four-year phase-in. People who are already retired, and those with at least 20 years of service, would continue to get free health care in retirement.

Workers' pension contributions will also rise at least 1 percent of salary immediately; some workers will see an additional increase phased in. Teachers will see their pension contributions rise to 6.5 percent of salary now and by an additional 1 percent over seven years. Police and firefighters will see their rate rise from 8.5 percent to 10 percent immediately.

Retirees' cost-of-living adjustments would be suspended.

The pension and health benefits systems are underfunded by a combined $110 billion. Proponents say the changes are needed to shore up the systems and guarantee pension benefits are available in the future. Opponents say the bill impedes collective bargaining.

The provision to allow collective bargaining over health care to resume after four years did little to quell union objections. Objections also did not diminish over an attempt to limit access to out-of-state medical care, a provision that has been relaxed but not eliminated.

One public worker union local is suing the state for skipping its pension payments.

Communications Workers of America Local 1033 said it would file suit in U.S. District Court on Wednesday.

The union wants the court to find the state's continued failure to make required annual pension payments a violation of workers' and retirees' rights.

Past litigation on pension funding has failed. However, the union opposes a proposed law that would allow the state to phase in pension payments over seven years and a pending freeze on cost-of-living pension increases for retirees.

The teachers union said the measure would have a crippling effect on retirees. It says retirement benefits will lose value every year without cost-of-living adjustments.

The effort to limit public employees' collective bargaining rights has gained momentum in other states. The GOP-led effort in Wisconsin calls for public workers to pay more for health and pension benefits beginning in late August unless a lawsuit by a coalition of unions is successful.

In Ohio, Gov. John Kasich in March signed a law limiting bargaining rights, which has yet to go into effect. And in Michigan, the Republican state Senate has passed measures to require most public employees to cover at least 20 percent of the cost of buying their health insurance coverage, with some flexibility for local bargaining units.

The Massachusetts House passed a bill in April stripping public-sector unions of the right to bargain over health care.

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