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 Maya Rao Inquirer Staff Writer TRENTON –

 Last month, a state utilities board voted to allocate $15 million in federal stimulus money for grants to make businesses more energy efficient.

The money for the program, which seeks to lower New Jersey residents’ utility bills by reducing demand from the biggest users of the electric grid, should have come from a fee assessed on major commercial and industrial users since 2003.

 But the Retail Margin Fund, which holds that revenue, is empty – among the consequences of hundreds of millions of dollars in diversions from “dedicated” funds to help the state close a multibillion-dollar budget gap.

 Budget documents show that environmental and clean-energy programs designed to reduce New Jersey household and commercial utility bills are being hit particularly hard, with about $400 million rerouted into the state’s general fund.

The state raided $128 million from the Retail Margin Fund, which is generated by fees from commercial and industrial users, in the fiscal year that ended June 30, and will take $14 million under the $29.4 billion budget signed into law last week.

Greg Reinert, spokesman for the Board of Public Utilities, said the fund had never spent the money collected over the years.

 Today, he said, “there’s nothing left in it.” Just last year, the state enacted a law authorizing the fund to spend $60 million on combined-heat-and-power grants for businesses. The program aimed to help the state develop 1,500 megawatts of cogeneration capacity by 2020.

 Assemblyman Upendra Chivukula (D., Somerset), a primary sponsor of the 2009 law, criticized the shift of $15 million in stimulus money to fund the cogeneration program as a one-shot fix. The fund is paid into by business customers “who are hurting with higher energy costs.

 By taking their money away and not giving it back to them, to balance the budget, it’s totally inappropriate,” he said. Chivukula grilled the sponsor of the bill authorizing the diversions from that and other environmental funds on the Assembly floor during last Monday’s marathon legislative session. Yet Chivukula provided one of the handful of Democratic votes needed to pass the measure, citing “the spirit of bipartisanship.” “Given the dire circumstances we’re facing in New Jersey with revenue shortfalls, we have little or no choice” but to look to other areas “to make this budget balanced,” Assemblyman Joseph Malone (R., Burlington), the bill’s sponsor and a previous critic of budget raids, told Chivukula.

The moves concern lawmakers and environmental advocates alike. “One of the problems is that this isn’t taxpayer money. . . . It was ratepayer money that had been set aside and dedicated to clean energy that helps people save money and helps create jobs and helps reduce pollution, so it was a no-win situation for the environment, the economy, and the people of New Jersey,” said Matt Elliott, the global-warming and clean-energy advocate for Environment New Jersey.

 “Once they get used to robbing these funds,” said Jeff Tittel, director of the New Jersey Sierra Club, “they may continue to rob them because it becomes easy – and that is going to mean higher electric costs for consumers, fewer jobs in a time when we need to grow our economy, and more air pollution.”

The largest diversion comes from the Clean Energy Fund, which annually takes in about $250 million, an average of $20 per New Jersey household, through a charge on utility bills. The fee stems from the 1999 utility deregulation under Republican Gov. Christie Whitman.

Revelations that the administration of Gov. Jon S. Corzine rerouted $30 million from the fund in 2009 drew outrage from several South Jersey lawmakers. Assemblymen Vincent Polistina and John Amodeo, Republicans from Atlantic County, lambasted the move as “Exhibit A of budget-balancing gimmicks.” Sen. Diane Allen (R., Burlington) called for an end to the practice.

 But those same lawmakers closed out fiscal 2010 by voting to authorize a $158 million diversion from the fund, and an additional $10 million this fiscal year.

In interviews, the three legislators said they continued to oppose raiding funds, but described their votes as necessary in a difficult fiscal climate.

Polistina blamed the Democratic Corzine administration, saying it had “overestimated revenues so badly that we were left with very little options, and at this point it seemed like the best way to try to close the shortfall that was created by Corzine.”

The moves have also upset the industry: The Mid-Atlantic Solar Energy Industries Association sued the Christie administration in May, saying diversions of clean-energy money were unconstitutional. Reinert said the impact of the diversions from the Clean Energy Fund had been softened by the BPU’s recapturing $61 million that had been set aside but never spent on various projects.

He said the BPU had actually increased funding for a successful home energy audit program. Taking money from dedicated funds is a longtime, if controversial, practice under administrations of both parties in Trenton.

State leaders gave approval last week to dip into funds dedicated to spinal-cord and breast-cancer research, disability payments, and economic development. They authorized diverting $10 million set aside to make state buildings more energy efficient, and tapping the recycling fund for $7 million, the same amount diverted last year. The budget also says that “all revenues from fees and fines collected by the Department of Environmental Protection . . . shall be deposited into the state general fund without regard to their specific dedication.”

States from California to Connecticut are raiding dedicated funds to offset enormous budget deficits. Rhode Island this year decided it was a violation of state law to divert cap-and-trade revenue from the Regional Greenhouse Gas Initiative, which is an agreement among 10 Northeast states to cut carbon emissions. New York and New Hampshire, however, took millions from their RGGI funds this year.

New Jersey is redirecting $65 million in RGGI money to its general fund. Sen. Jeff Van Drew (D., Cape May) said the moves meant a lack of investment in the future, given that New Jersey has been “on the cutting edge of clean energy.”

He withheld his support for the budget last year out of numerous concerns about raiding dedicated funds, and has sponsored a resolution to bar the practice through a state constitutional amendment. He nonetheless voted to authorize the diversions last week, explaining: “We have to move forward in New Jersey.

We have to put out a message that we can’t have a [government] shutdown.”

Our Perspective:

I find this article to be really distuurbing. It just continues to validate my view that the system is broken. We have been caught up in greed and abandoned our ideals to be self serving. We have to rethink our efforts and start thinking outside the box.

The status quo is not working. The politicians are not serving our best interest. There must be a better way and we have to start electing people who our true to our ideals and will work to make this world a better place. Stop putting bandaids on everything.