Governor's budget demands more from NJ workers

February 22, 2011 6:55:11 PM PST
New Jersey Gov. Chris Christie held fast to his national reputation for fiscal discipline Tuesday, unveiling a $29.4 billion budget that calls for heftier contributions from state workers for pension and health care benefits, core union issues that have sparked protests in Wisconsin over collective bargaining rights.

RELATED: Watch video of Gov. Christie's budget address
RELATED: Read the text of Gov. Christie's budget address

Christie proposed paying $500 million into the state's severely underfunded pension system - the minimum required under a new law to get the state to quit skipping its payments. But Christie, who's burnished national credentials as a take-no-prisoners fiscal conservative, committed to making the payment only if the Democratic Legislature agrees to reforms that require government workers to delay retirement and pay more.

"As I am asking the Democratic leadership to make good on their promise, I am offering a powerful incentive to sweeten the pot," Christie said. "If you pass real reform, I will make a $500 million payment to the pension fund immediately, not wait until sometime in fiscal year 2012, which is all that the law we passed last year requires."

Union workers, a powerful Democratic constituency in a legislative election year, oppose the plan. Unions plan to rally at the Statehouse on Friday in support of public workers in Wisconsin, where protests have erupted over collective bargaining rights and public employees' benefits are among the issues raising ire.

Christie, who has become prominent within the Republican Party, said other governors are following the course he began in his first budget a year ago.

"Governors are grappling with inherited budget deficits, skyrocketing pension and benefit costs, and state government cultures which embrace the status quo - no matter how destructive," Christie said. "They are just now coming to terms with the gravity of the situation we understood and responded to last year.

"Today, they are standing up and saying just as I did last March: `The problems we have hidden for decades are evident for all to see. The day of reckoning has arrived."'

Christie's carrot-and-stick budget plan also targets public workers' health care. His plan would double property tax credits for some households - but only if the Legislature significantly increases public workers' health insurance contributions.

The governor, who has made enemies with the powerful public teachers union since taking office 14 months ago, wants legislation that would push one-third of the cost of health insurance onto state workers by 2014, up significantly from the 1.5 percent of their salary they pay now. Christie would apply the $323 million in savings to property tax relief for lower-income, senior and disabled homeowners.

The 1.5 percent contribution enacted last year is a fraction of the $19,000 a year it costs to insure the average public employee with family coverage. The new proposal would include cheaper plans to keep costs down.

Union leaders immediately assailed the plan.

"Once again, Gov. Christie is targeting the middle class, demanding cuts that will hurt every working family in the state," said Hetty Rosenstein, state director for the Communications Workers of America, the largest public worker union, representing 40,000 state employees.

CWA regional political director Robert Master said he sees little difference between Christie's plan to legislate pension and health concessions in New Jersey and Wisconsin Gov. Scott Walker's measure to strip collective bargaining rights from organized labor.

Christie said Friday that he supported Walker's fiscal approach but stopped short of endorsing his specific proposal to curtail bargaining.

Joseph Cryan, the Democratic leader in the Assembly, complained that the governor, through his budget, is pitting one group of middle-class New Jersey taxpayers against another.

"What the governor took today was an opportunity to divide people, to play people against one another," said Cryan, who ran the Democrats' campaign against Christie in 2009. "That's the absolute worst way to do it."

However, the League of Municipalities, an association of municipal mayors, says it's pleased Christie's budget proposal holds the line on spending and aid to towns.

Christie's budget cuts spending by 2.6 percent over last year, while incorporating $200 million in tax cuts for businesses and adding $250 million more than last year for public schools. It incorporates Medicaid changes that include moving aged, blind and disabled recipients into managed care, reduces payments to nursing homes and assumes a 3 percent reduction in state workers through attrition. Though the state workers' contract expires in June, no money was budgeted for employee raises.

A breakdown of key proposals in New Jersey Gov. Chris Christie's budget message delivered on Tuesday.

EDUCATION: - Increases state aid to primary and secondary K-12 schools by $250 million. Schools to receive an increase equal to 1 percent of their current budget.
- Increases school choice and charter school aid by nearly double. They'll get $17 million more combined.
- Keeps flat state aid to colleges and universities.
- Increases student financial aid by $20 million.

PROPERTY TAXES: - Proposes to double last year's rebates for those making $75,000 or less, and for seniors and the disabled who make less than $150,000 - but only if the Legislature increases public workers' health insurance contribution.
- Allows no one additional to join the "senior freeze" program, which lets low-income senior and disabled citizens lock in their property tax rates when they enroll.

- Up about 4 percent.

- Aid stays the same as last year, except $10 million less in financial assistance to struggling towns.

- Agrees to make a $506 million pension payment earlier than required, if lawmakers agree to his proposed pension reforms.

- Saves $300 million on Medicaid spending by transferring people into managed care plans.
- Closes state-run Hagedorn Psychiatric Hospital in Glen Gardner to save $9 million.
- Boosts charity care by $10 million and hospital funding by $20 million.
- Increases by $30 million graduate medical education.

- Reduces the state work force by approximately 200 workers through attrition.

- Spending of state tax dollars increases slightly when federal stimulus money is taken out of the mix, from $29.3 billion to $29.4 billion. When stimulus money is left in, it decreases by 2.6 percent.


Source: Office of the Governor