As reported by Courier Post

Written by
ANGELA DELLI SANTI and BETH DeFALCO

TRENTON — Republican Gov. Chris Christie and Democratic Senate President Stephen Sweeney reached a deal Wednesday to change retiree pension and health benefits by requiring public workers to pay more for both.

The deal, if approved by the Legislature, would require bigger contributions from all public workers beginning July 1, a person who has been briefed told The Associated Press. The person insisted on anonymity because the deal has not been made official.

It would also mean that public workers’ health benefits would be legislated, not negotiated, as they are now. Christie has been pushing for legislative changes; union leaders have been opposed.

An official announcement is planned for later Wednesday. Details were still being worked out by Democrats who control the Senate.

Assembly Speaker Sheila Oliver, also a Democrat, has been involved in the talks over the past several weeks, but it’s not known whether she agrees with the deal. Her spokesman, Tom Hester Jr., declined to comment Wednesday.

The governor’s office did not respond to messages for comment.

The pension and retirement health systems are both underfunded by tens of billions of dollars. The proposal is designed to reduce the long-term indebtedness of both systems.

One provision of the deal would require the state to make its annual pension payment. Governors of both parties have skipped or greatly reduced their pension contribution in most of the past 20 years.

The deal would raise pension contributions immediately by at least 1 percent for public workers such as local police and firefighters; teachers; state police; and state, county and municipal workers. Judges, who now put 3 percent of salary toward their pensions, the least of any public worker group, would see that amount increase to 12 percent.

The deal also would require employees to pay more for health care under a new salary-based contribution formula that would be phased in over four years. The rate could be as high as 30 percent of the cost of the premium for top wage earners and as low as 3 percent for the lowest-paid employees. Most workers now pay 1.5 percent of their salary toward health care regardless of the cost of their plan.

The proposed state budget for the fiscal year that starts July 1 relies on more than $300 million in savings from health benefits reforms.

The Communication Workers of America, the state’s largest public worker union, wants health care to remain a collective bargaining issue. The union representing 55,000 state and local employees is in negotiations with the Christie administration over a new contract; its current contract expires June 30.

“This proposal destroys collective bargaining,” said Hetty Rosenstein, the union’s state director. “It’s completely unaffordable for anybody — it does not one thing to actually save health care dollars, all it does is shift them.”

“All over this country there is a fight to protect collective bargaining,” Rosenstein said, “and we think Democrats in New Jersey should join that fight.”

The union’s health care giveback proposal relies on increased cost-sharing by employees, bulk purchasing of prescription drugs and updated medical record-keeping to reduce costs by $240 million in the fourth and final year of the contract.

 

By Lisa Fleisher/Statehouse Bureau

As reported on NJ.com

TRENTON — Gov. Chris Christie Thursday will propose major changes to the state’s broken unemployment system, reducing benefits for workers and limiting tax increases on employers, legislative and administration officials said tonight.

Christie’s proposal, which will need to be passed by the Democrat-controlled Legislature, is aimed at softening a tax hike business groups said was their top concern for the year, while also targeting benefits given to future unemployed workers.

Democratic lawmakers have said they would fight to protect benefits for workers, but they also said increasing taxes employers pay for workers could stunt job growth.

“I am going to have to support some element of what is being put on the table,” said Assembly Speaker Sheila Y. Oliver (D-Essex), who was briefed on the proposal Thursday. But “to have unemployed people, quote, ‘share the burden’ of dealing with our fiscal (problem), it’s like adding insult to injury to devastated New Jerseyans.”

The proposal, which would take effect in July, would reduce tax increases on businesses, institute a one-week waiting period for people receiving benefits, reduce the maximum weekly benefits check by $50 and increase benefit restrictions on people fired for “misconduct,” said Oliver and two senior Christie administration officials, who requested anonymity because they were not authorized to speak before the announcement.

With the state’s jobless rate hovering around 10 percent, the proposal would not affect employees already on unemployment.


Full Star-Ledger coverage of the N.J. budget


Christie’s proposal is a shift from a statement he made just before taking office in January. He had said he wanted to find a way to help employers, but the state would have to “pay the piper on this” and he would not ask for legislation to put off the tax increase.

Those taxes on employers pay most of the cost of providing state benefits to laid-off workers. But politicians in both parties for years used unemployment taxes for other purposes, such as paying for health care for the poor.

A constitutional amendment, which Christie supports, will go on the ballot in November asking voters to force the Legislature to stop raiding accounts such as the New Jersey Unemployment Insurance Trust Fund.

When New Jersey and the country plunged into the deepest recession since the Great Depression, the state quickly ran out of money to pay benefits. That triggered a tax increase lawmakers have tried to soften.

“There’s no bigger issue for the economy, for future economic growth, for this state,” said Arthur Maurice, a vice president with the New Jersey Business and Industry Association. “Unless it’s resolved, there will be greater unemployment and no hope of any jobs recovery in the state.”

Without the proposed changes, the average employer in July would see taxes go up 58 percent — or $390 a year — per employee, according to the administration. The changes would hold that increase, on average, to 17 percent this year, or $130 per employee and further limit the potential for increases through 2013.

New Jersey has borrowed $1.2 billion from the federal government in the past year, and Christie and lawmakers have asked congressional representatives to work to get the loan forgiven.

Under Christie’s changes, future laid-off workers would have to bear some of the pain. The maximum weekly state benefit would be scaled back from $600 to $550, and people would have to wait a week to get a check. That means people who take weeklong furloughs — or temporary, unpaid time off — would not be eligible for benefits for that first week.

Those provisions will likely face the biggest fight.

“It’s something that I would have a very hard time supporting,” said Senate Majority Leader Barbara Buono (D-Middlesex). “I think it’s Draconian.”