New Jersey contends law requiring state to make full pension contributions is unconstitutional

A New Jersey judge is weighing whether she has the power to force Gov. Chris Christie and the Legislature to make promised payments to public employee pension funds.

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A lawyer for the state told Judge Mary Jacobson on Thursday that the Legislature cannot require future payments from the state. Only voters can do that, Assistant Attorney General Jean Reilly said.

But public employees unions said that a binding contract was struck four years ago when the Republican governor and Democrat-controlled Legislature agreed to fully fund pensions in exchange for concessions from workers and retirees.

Unions sued last year after Christie, faced with a surprise shortfall in tax revenue, said he would make smaller pension contributions than promised in 2014 and 2015.

Jacobson ruled last year that the state was bound by contract to make the full payments but that it was legal to reduce the 2014 payment because there were few other options. Now, she's deciding on the payments due in June 2015.

Reilly argued that a 2011 law signed by Christie to obligate full pension contributions cannot be enforced under the state constitution. The law, she said, violates the clause of the state constitution that guarantees that appropriations not approved by voters go through the budgeting process each year. She also said it runs afoul of the governor's veto power and a limit on creating new state debt.

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Jacobson interrupted the lawyer with questions about that assertion holds up against another constitutional provision.

"No unpayment of contracts, isn't that somehow crystal clear in both the federal and state constitution?" she asked. "It seems to me that in your briefs as well, you really trivialize the contracts clause. You push it aside as if it's meaningless. I can't do that."

Jacobson noted that the lawmakers went out of their way in 2011 to say that the state had a contractual obligation to make pension contributions to catch up for all the year when payments had been skipped or skimped in the past.

"It's unprecedented," Reilly responded, "because it's unconstitutional to enforce."

Lawyers representing unions told Jacobson that the state did have choices for balancing the budget, especially for the current fiscal year, which runs through June, but that Christie ignored other options.

"This is not a reasonable reaction to a budget shortfall," lawyer Keneth Nowak said. "This is a statement of principle."

Jacobson pointed out that Christie's administration did make other budget cuts, but that none of them came close to getting the savings that cutting pension payments did.

The arguments were expected to last well into Thursday afternoon.

Jacobson has not said when she might rule. It's likely any decision will be appealed to a higher court.

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