N.J. Budget deal reached

June 20, 2008 6:42:32 PM PDT
Democratic legislators late Friday reached agreement on a plan to cut benefits for state and local government workers and teachers, clearing the way for agreement on a $32.8 billion state budget plan. Senate President Richard J. Codey said he expected the Legislature to approve the cost-slashing budget Monday, a full week before the state's July 1 constitutional budget deadline.

Senate Majority Leader Stephen Sweeney and Senate Budget Chairwoman Barbara Buono said the agreement reached after lengthy closed door meetings with Assembly Democrats would: - Raise the retirement age from 60 to 62 for new workers.

- Require new government workers and teachers earn $7,500 per year to receive a taxpayer-paid pension. Teachers need now earn $500 and government workers $1,500 annually to qualify for taxpayer-pensions.

- Eliminate Lincoln's Birthday as a state worker holiday, cutting state worker holidays from 13 to 12 days.

- Allow the state to offer incentives to workers not to take taxpayer-paid health insurance, if the employee is eligible for other health care coverage.

Buono, D-Middlesex, said the changes would save $300 million through the next 15 years.

"The taxpayers really won today, and I actually think we're being fair to everyone," said Sweeney, D-Gloucester.

Sweeney and Buono were among the legislators pushing pension cuts as a way to help pay for Gov. Jon S. Corzine's plan to save $91 million by offering retirement incentives to 2,000 state workers. The retirement incentives are a key part of the budget plan.

Public worker unions opposed the reforms. Top officials from the state's largest teachers union participated in the closed-door meetings in which the agreement was hashed out, but they still urged lawmakers to reject the changes.

New Jersey Education Association President Joyce Powell called the pension reform effort a "charade."

"All you would have accomplished is hurting our future members," Powell said.

Bob Master of the Communications Workers of America, which represents most state workers, held up a copy of the state worker contract agreed to last year and waved it toward legislators.

"Everything that's in this legislation tramples on the collectively bargained provision of this contract," Master said.

Some Democrats said they would back the legislation, but were uneasy. Organized labor has long supported and donated heavily to Democrats.

"Today we're moving so we can move a budget," said Assemblyman Joseph Cryan, D-Union, the state Democratic Party chairman. "The fact of the matter is that for a lot of us it takes a lot of pause and consideration to move forward."

Legislative committees were expected Friday to release the legislation for full Monday votes. The Senate budget panel did the same with the $32.8 billion budget plan. The Assembly budget panel cleared the bill Thursday.

Both budget panels also Friday released a bill to borrow $3.9 billion for school construction, most in poor cities.

Sen. Ronald Rice, D-Essex, chairman of the 15-member black legislative caucus, said many legislators won't vote for the budget unless the borrowing is approved, but other legislators want voters to approve the borrowing. Rice told the panel the state cannot afford to wait.

"This is a bill for children," Rice said.

But Sen. Leonard Lance, R-Hunterdon, said it will cost, when interest is considered, $6.82 billion to pay back the borrowing. He wants voters to decide it.

"We will put our children and their children in debt for decades," Lance said.

Corzine backs requiring voter approval for new borrowing, but noted the state Supreme Court ordered new schools in the poorest districts. He also cited shoddy conditions in urban schools and the economic boost construction could bring.

"It's not the easiest decision to defend, but it's the right decision," the Democratic governor said. "It's the right decision constitutionally, it's the right decision morally to protect our children and it's most emphatically the right decision in trying to provide real stimulus for the economy."

The $32.8 billion budget plan backed by Corzine and legislative leaders cuts funding for several key services, including hospitals, municipalities, colleges and nursing homes. Corzine contends the cuts would be painful but necessary. Republicans said the budget passes costs onto property taxpayers.