June 10, 2015

THE PUBLIC INTEREST TRUMPS ITS SERVANTS:

New Jersey Governor Christie wins court victory over pension cuts (MEGAN DAVIES AND JONATHAN STEMPEL, 6/09/15, Reuters)

The state Supreme Court, in reversing a lower court ruling, said while it lamented the "staggering" loss of public trust resulting from broken promises, the pension payment was not a contractual obligation entitled to constitutional protection.

Christie cut a state contribution to the public pension system last year because of a revenue shortfall. The state's pension system has about $83 billion of unfunded liabilities and was funded at only about 44 percent in fiscal 2014.

Public-sector unions sued the administration, and in February Superior Court Judge Mary Jacobson sided with them, finding that a 2011 pension reform law, signed by Christie, created a contractual right that the state make its contribution. The state appealed to New Jersey's highest court, which heard arguments in May.

"That the State must get its financial house in order is plain," wrote Justice Jaynee LaVecchia in the opinion. "The need is compelling in respect of the State's ability to honor its compensation commitment to retired employees. But this Court cannot resolve that need in place of the political branches."

Posted by at June 10, 2015 2:17 PM
  

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