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New Jersey Lawmakers Approve Benefits
Rollback for Work Force
By Richard Pérez-Pena, NY
Times
June 23, 2011
Rich Schultz/Associated
Press Onlookers turned their backs in protest Thursday as the New
Jersey Assembly debated cuts to public employee benefits. The Assembly
passed the bill 46 to 32; the Senate will vote Monday.
New Jersey lawmakers on Thursday approved a broad rollback of benefits for
750,000 government workers and retirees, the deepest cut in state and local
costs in memory, in a major victory for Gov. Chris Christie and a once-unthinkable
setback for the state’s powerful public employee unions.
The
Assembly passed the bill 46 to 32, as Republicans and a few Democrats
defied raucous protests by thousands of people whose chants, vowing
electoral revenge, shook the State House. Leaders in the State Senate said
their chamber, which had already passed a slightly different version of the
bill, would approve the Assembly version on Monday. Mr. Christie, a
Republican, was expected to sign the measure into law quickly.
In a
statement released after the vote, Mr. Christie said, “We are putting the
people first and daring to touch the third rail of politics in order to
bring reform to an unsustainable system.”
The
legislation will sharply increase what state and local workers must
contribute for their health insurance and pensions, suspend cost-of-living
increases to retirees’ pension checks, raise retirement ages and curb the
unions’ contract bargaining rights. It will save local and state
governments $132 billion over the next 30 years, by the administration’s
estimate, and give the troubled benefit systems a sounder financial
footing, mostly by shifting costs onto workers.
While
states around the country have moved to pare labor costs and limit the
power of unions, the move is all the more striking here, in a
Democratic-leaning state where Democrats control both houses of the
Legislature and union membership is among the highest in the country. Most
Democratic legislators opposed the benefits reductions, but their leaders voted
in favor of the changes, exposing deep, longstanding rifts in the party
that lawmakers say could weaken it in coming elections.
The
fight over benefits reflected both Mr. Christie’s ability to exploit the
divisions among Democrats, through his alliances with more conservative
Democratic party bosses and legislators, and his success at using the
public-sector unions as a foil in his drive to shrink government spending.
It has also allowed a nationally known but highly polarizing governor to
claim the mantle of bipartisan conciliation, telling audiences that New
Jersey is setting an example that other states and the federal government
should follow.
On
Thursday, thousands of people wearing union T-shirts and buttons filled the
Assembly visitors’ gallery, the State House corridors and, in a
high-decibel protest, the sidewalks, lawns and streets around the building.
A procession down State Street included a hearse draped with a banner
saying “The Soul of the Democratic Party,” and organizers with bullhorns led
the crowd in chants of “We’ll remember in November!” and “Kill the bill!”
Unions
have been broadcasting advertisements attacking Democrats who support the
bill — particularly Stephen M. Sweeney, the Senate president — and this
week union leaders have spoken of the difference between “real Democrats
and Christie Democrats,” pointedly including in the latter group Mr.
Sweeney, who also is an official of the ironworkers’ union.
“This
bill is not about savings; it is about breaking the backs of the
hard-working men and women of this state,” Assemblyman Patrick J. Diegnan Jr., a Middlesex County Democrat, said Thursday
after the session began. “I challenge everyone in this chamber today: how
many have even read the full 124 pages of union-busting activities?”
But
Assemblyman Angel Fuentes, a Camden Democrat, said, “These reforms are
unquestionably bitter pills for us to swallow, but they are reasonable and
they are necessary.” He added: “We now have towns across this
state that are struggling to afford health benefits for their
employees. This has resulted in cities laying off
workers.”
The
legislation applies to all state employees and to a much larger number of
county, town and school district workers, because most local governments
participate in the state-run pension and health care systems. When it is
fully phased in, after four years, the average government worker will pay
several thousand dollars more into the benefit funds.
But union leaders say the bigger issue is what
they call a stealth assault on collective bargaining. With just a week
remaining in the contracts for the major state employee unions, the unions
are now trying to negotiate new agreements with the state.
Most
public employees in the state, other than teachers, police officers and
firefighters, have had no guarantee of collective bargaining on any issue
except for health benefits.
The
legislation will supersede that right, allowing the state to impose health
care terms unilaterally. For many workers, this means that if contract
talks reach an impasse, the government will be able, at least in theory, to
dictate all terms, like wages, time off and work rules.
“This
bill cuts away the one issue, health care, that the unions could use to
trade off against other things,” said Jeffrey H. Keefe, associate professor
at the School of Management and Labor Relations at Rutgers University.
Hetty
Rosenstein, state director of the Communications Workers of America, said,
“This bill is nothing less than Chris Christie’s frontal assault on
organized labor.”
Union
leaders said they were exploring the possibility that some provisions of
the bill, like the suspension of cost-of-living increases for retirees,
could be challenged in court.
In his
campaign to rein in the unions and shrink government, Mr. Christie has
often been helped by New Jersey’s unique political culture, where local
political machines still dominate some areas, and many state legislators
also hold local government jobs. That gives striking influence in Trenton
to mayors, county executives and local party bosses who struggle with
rising labor costs and have repeatedly sided with the governor’s push to
cut benefits and wages.
Until
recently, the public employee unions were among the most feared forces in
state politics. They were a major source of votes, campaign cash and foot
soldiers for Democrats, but officials in both parties were eager to please
them. For years, governors and legislators from both parties sweetened
their pension benefits but did not put any money into the system to pay for
them.
As a
result, the state’s pension funds are among the most underfunded in the
nation — estimated last year at $54 billion short of the amount needed to
meet future obligations. Mr. Christie and others have warned that mounting
pension and health care costs could eventually bankrupt the state and local
governments.
The
pendulum has swung back over the last four years, first under Gov. Jon S.
Corzine, a Democrat, and then under Mr. Christie, as the state took steps
like increasing what workers paid for benefits, raising retirement ages and
limiting contract arbitration awards. But the bill now awaiting the
Senate’s approval and Mr. Christie’s signature is easily the most
far-reaching one yet.
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