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N.J. Assembly passes landmark employee benefits overhaul

N.J. Assembly passes landmark employee benefits overhaul

Published: Friday, June 24, 2011, 7:00 AM     Updated: Friday, June 24, 2011, 11:20 AM

 By Statehouse Bureau Staff 

EnlargeStar-Ledger StaffNJEA Teachers Brenda Harrower, left, and Kris Johnson, right, with Denville School, among others in the gallery stood with their towards the Assembly as Assemblymen Declan J. O'Scanlon Jr. speaks during pension and health benefit bill. (Saed Hindash/The Star-Ledger)N.J. state workers protest as Assembly prepares to vote on pension overhaul bill gallery (48 photos)

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TRENTON — New Jersey lawmakers tonight voted to enact a sweeping plan to cut public worker benefits after a long day of high-pitched political drama in the streets of Trenton and behind closed doors.

Union members chanted outside the Statehouse and in the Assembly balcony, and dissident Democrats tried to stall with amendments and technicalities. Although they successfully convinced top lawmakers to remove a controversial provision restricting public workers’ access to out-of-state medical care, they failed to halt a historic defeat for New Jersey’s powerful unions and a political victory for Republican Gov. Chris Christie.

"Together, we’re showing New Jersey is serious about providing long-term fiscal stability for our children and grandchildren," Christie said in a statement released after the vote. "We are putting the people first and daring to touch the third rail of politics in order to bring reform to an unsustainable system."

Christie and Republicans banded together with Senate President Stephen Sweeney (D-Gloucester) and Assembly Speaker Sheila Oliver (D-Essex) to advance the bill despite opposition from the majority of Democrats who control the Legislature.

More than 8,500 protesters, the most this year, poured into Trenton this morning with signs, speeches and their trademark inflatable rat. But most had dispersed by the time Democrats emerged from their hours-long caucus meetings where they debated the bill’s details and a separate budget proposal. The Assembly convened for a vote at about 6:15 p.m., more than five hours late, and lawmakers delivered speech after speech on the bill for nearly three hours.

MORE FROM TRENTON:

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• N.J. Assembly rejects plan to transfer NJN management to N.Y.-based WNET

• Protestors create spectacle at N.J. Statehouse throughout pension, benefits overhaul vote

• NJ unions rally in Trenton, Assembly votes on pension and health benefit overhaul - live coverage

"We cannot afford to put off these needed reforms for another year," said Assemblyman Lou Greenwald (D-Camden), a sponsor. "Kicking the can down the road and doing nothing will only require more sacrifice from taxpayers and public workers in the future."

The bill passed the Assembly 46-32 and will be sent to Christie’s desk for his signature. Fourteen Democrats voted for the bill, while 32 opposed it. After the vote, protesters in the balcony shouted "Shame on you!"

Unions have blasted the bill for ending their ability to collectively bargain their medical benefits. Health care plans for 500,000 public workers would be set by a new state panel comprised of union workers and state managers, rather than at the negotiating table. A sunset provision would allow unions to resume collective bargaining after increased health care contributions are phased in over four years.

In addition, police officers, firefighters, teachers and rank-and-file public workers would all pay more for their pensions and health benefits.

Supporters of the bill say the state needs to cut costs because the pension and health systems are underfunded by more than $120 billion total. The Christie administration estimated the bill would save $3 billion in health benefits over the next 10 years and $120 billion in pension costs over 30 years. Much of the pension savings are from the controversial elimination of the cost-of-living adjustments for retirees, which unions have threatened to challenge in court.

Video: NJ Assembly passes employee benefits overhaul billAfter hours of debate and discussion the New Jersey State Assembly passed the bill that overhauls public worker pension and benefits 46-32. Over 8,000 people were outside the statehouse earlier in the day to protest the bill that has now passed both houses and is expected to be signed by Gov. Chris Christie. (Video by Michael Monday/The Star-Ledger)Watch video

Christie, who has staked his reputation on shrinking government costs, has called the bill a model for the the country. New Jersey is one of 23 states that have asked workers to pay more for their pensions since the Wall Street crisis in 2008, according to the Pew Center on the States.

The Assembly passed the bill much like the Senate did on Monday. Democrats voting for the bill have been either from South Jersey and allied with that region’s power broker, George Norcross, or from North Jersey and tied to Essex County Executive Joseph N. DiVincenzo Jr.

Most Democrats denounced the bill, and Assemblyman Joseph Cryan (D-Union), the Assembly majority leader, called it "one of the most stunned and disheartening times" of his career.

Today's union protest, like other recent demonstrations, did nothing to stop the bill. But it did highlight the growing fissures in the state Democratic Party. While Sweeney and Oliver were pushing the bill, the chairman of the state party, Assemblyman John Wisniewski (D-Middlesex), was rallying protesters with two-dozen other Democrats. "I represent the Democratic wing of the Democratic Party," he said. Bob Master, a leader in the Communications Workers of America, said Democrats should not be "collaborating" with Christie.

Later, on the Assembly floor, Republicans heaped praise on Oliver while her Democratic colleagues condemned the bill. Assemblyman Joseph Malone (R-Burlington) said she showed courage, saying "I’ll remember your actions for the rest of my life."

Teachers, firefighters, police officers and other public workers unite at Statehouse to rally against pension and benefit reformNearly 8500 people gathered in the streets surrounding the Statehouse in Trenton to defend their stance on pension and benefit reform. Collective bargaining was the overall theme, but some delved deeper as to what exactly is important to them and their families as a bill awaits a vote in the state assembly. (Video by Vincent Velasquez / The Star-Ledger)Watch video

Sweeney, who has urged cuts to public worker benefits, said the legislation would help save the state’s retirement system.

"Nobody is talking about how we protected 800,000 people’s pensions," he said today. "I don’t apologize for that."

Over the years, lawmakers and local leaders from both parties have offered increased benefits to public employees, often in exchange for political support. But even as benefits improved, the state and municipalities failed to meet its financial obligations. Since 2004, the state has not made $15.11 billion in required payments to the pension funds, while the municipalities have skipped $1.9 billion. Public employees, meanwhile, have fully paid their required contributions.

As a result, the state has a $54 billion shortfall in its pension system, among the highest in the nation. New Jersey’s health benefit system is in even worse shape than the pension fund and is the most poorly funded in the nation at $66.8 billion in the hole, according to the Pew Center on the States.

Rally In Trenton To Protect our Rights

Rally In Trenton To Protect our Rights

Come to Trenton and Tell Governor Christie his job is to protect your rights not take them away!

This Monday, June 20th we will be rallying in Trenton and letting the Governor and State Senate know that we are paying attention to what they are doing. The rally that starts on Monday, it will be on going until Thursday when the final vote is taken. Between Saturday and Thursday a tent city will be put up in the back of the State House called “Camp Collective Bargaining”.

We will be protesting the passing of Senate Bill 2718 and telling our politicians that their responsibility is to protect our collective bargaining and negotiation rights as they are a part of FREE SPEECH, that if the Governor and Senators pass this legislation they are taking away our CONSTITUTIONAL guaranteed rights.

Senate Bill No. 2937(formally known as No.2719) will take away negotiation rights from individual state workers and collective bargaining rights for Unions and Organization’s in regards to state workers' health care plans. It gives the politicians (Christie and the State Senate) complete control over health care plans and gives people affected by the plans NO SAY in anything regards to their own health care plans.

One might say that this Bill won't affect them.... IT WILL...
If collective bargaining rights or negotiation rights are taken away from anyone regarding anything, in the form of legislation instituted by our representatives, it will be that much easier to take it away from anyone else regarding anything else.

Come tell your Governor and your Senators how you feel about everything they are doing that hurts working class and middle class people. Show them that you are paying attention, that they cannot simply do whatever they want...They must make this decision before the legislative session ends on June 30th so we must put pressure on them now!!!!

WHERE TO MEET:
If you are coming from the Vineland/Millville/Bridgeton or South Jersey area we will be meeting up in the parking lot at the Econolodge on 998 W Landis Ave in Vineland, we will be distributing some signs and Information in order to prep every one for the day’s events. We also will be having coffee and some treats for everyone caravanning with us to the rally. Meeting time is 7:30am. Anyone who drives with us and provides a seat will be reimbursed for gas.

If you want to skip the caravan and meet at the State Capitol building in Trenton, be there by 9:00am.

U.R.I. People's Initiative: Come Join Us

U.R.I. People's Initiative: Come Join Us

Details of N.J. public worker pension and health benefits reform bill

Published: Friday, June 17, 2011, 2:40 PM     Updated: Friday, June 17, 2011, 3:51 PM

 By Statehouse Bureau Staff 

EnlargeTony Kurdzuk/The Star-LedgerAfter being told by a state trooper that she was not allowed to have protest signs in the committee room and refusing to put it away, Ellen Whitt of New Brunswick is escorted out to be arrested during a meeting of the Senate Budget Committee at the State House today. Thousands of union members showed up today to protest the public employee pension and benefits bill that was being heard in the committee. Trenton, NJ 6/16/11 (Tony Kurdzuk/The Star-Ledger)State Workers Rally Against Pension Bill 6-16-11gallery (15 photos)

Pensions

• Police and firefighters would contribute an additional 1.5 percent of their salaries toward pensions, for a total of 10 percent. Non-uniformed public workers, including teachers, would eventually kick in an additional 2 percent of their salaries, for a total of 7.5 percent.

• Cost of living adjustments would be eliminated for current and future retirees until the pension funds become stable, which is not expected until at least 2040.

• The retirement age for new teachers and other non-uniformed employees would be 65, up from 60, and they would have to work 30 years, not 25, to be eligible for early retirement.

• For new police and firefighters, pensions would be 65 percent of salary at 30 years, and 60 percent at 25 years. Current law is 65 percent of salary at 25 years.

• The state would be contractually required to make its annual pension payment, and unions could sue to force payments.

• An employee-manager board would be established to set contribution rates, retirement ages and other benefit levels, but only when the funds become stable and as long as the changes don’t have an adverse effect.

Health Benefits

• All public employees would pay a percentage of their health care premiums in a tiered system based on salaries. Most would see current costs at least double, and many would see them triple.

• Current retirees would not be affected. Current employees with 20 years of service on the effective date of the act would not be affected when they retire, but would pay the increased contributions while still working.

• Unions would be able to renegotiate contributions levels, but not before paying the higher rates for at least four years.

• A board would be established to create new health plans by Jan. 1 that would offer fewer benefits at lower prices, including at least one high-deductible plan. The board would also look at co-pays, prescriptions and other items.

Come Join Us

Ignoring insults and protests from labor, Senate panel backs benefits reform

Published: Friday, June 17, 2011, 7:34 AM     Updated: Friday, June 17, 2011, 10:35 AM

 By Star-Ledger Staff 

Tony Kurdzuk/The Star-LedgerPresident of the AFL CIO of New Jersey Charles Wowkanech on the State House floor in Trenton for a protest rally against benefits reform. Monday June 16, 2011

Irate public employees converged on the Statehouse in Trenton by the thousands yesterday tooting horns, carrying signs and disrupting a Senate hearing, but the show of force failed to break a legislative agreement overhauling their state health and pension benefits.

Union members gathered at the Statehouse steps and clogged a Senate hearing room in an effort to thwart the progress of a bipartisan bill that was worked out Wednesday night between Democrats and Republicans.

There was even an inflatable rat outside the Statehouse annex with a sign on its chest that said, “Pension betrayal.” It seemed at times as if the demonstrators didn’t know who they were maddest at: the Republican lawmakers doing the bidding of Gov. Chris Christie or their Democratic counterparts who joined in to support the measure now headed for votes on the Senate floor and the Assembly next week.

At one point, police led more than two dozen union workers from the hearing and charged them with disorderly conduct after they locked arms and began shouting “kill the bill” and “workers’ rights are human rights.”

“There’s a lot of sheep inside, and the lions are out here fighting,” Assemblyman Reed Gusciora (D-Mercer) told an estimated 3,500 public workers gathered outside the Statehouse.

As the raucous crowd cheered on union leaders and disgruntled Democrats, the Senate Budget and Appropriations Committee absorbed a litany of blistering criticisms of the bill and the legislators who support it. The measure, if approved, will force the state’s 500,000 public workers to assume a much larger share of the costs for health care and pension benefits.

The labor leaders testified that health benefits should be negotiated, not legislated, and urged the panel to split the measure into separate bills.

For four hours, union leaders pleaded in vain with Democratic legislators to vote against the measure, which was approved by a 9-4 vote.

“You are trampling on our fundamental democratic rights,” said Bob Master, political director of the Communications Workers of America, the state’s largest public employee union. “Real Democrats would kill this bill.”

A union label

Senate President Stephen Sweeney (D-Gloucester), the bill’s architect, began the four-hour hearing against the backdrop of jeers and insults. Union members hissed when his name was called and berated him as a “disgrace” and “turncoat.”

Sweeney, a union ironworker, touted his union credentials, but said that as a legislator he also had an obligation to protect the state’s taxpayers.

“We need action,” he said. “Reform is needed now. We have a pension system in crisis, one that is teetering on the brink of collapse. That is becoming clearer as we see record numbers of public employees retiring.”

New Jersey is confronted by a $53.9 billion pension deficit because for years the state did not pay into it, the stock market swooned during the recession and benefits to the expanding work force increased. Health care costs have also soared, and there are $66.8 billion in unfunded liabilities.

Sweeney said the pension changes are about ensuring there is money to pay retirees and the health benefit overhaul is about protecting taxpayers. “Change is here and it is fair and affordable,” he said.

Gov. Chris Christie praised the measure yesterday at the annual conference of the New Jersey Association of Counties meeting in Atlantic City. “New Jersey is setting a model for dealing with these problems in an honest, forthright and bipartisan way,” he said.

But Sen. Barbara Buono (D-Middlesex) challenged Sweeney’s contention that the only way to achieve savings is through legislation,.

“I think that you can achieve the same savings through negotiations. ” I am not sure what the governor’s afraid of,“ she said. ”Instead, he’s going through the back door and changing the rules, that’s what I object to.“

The bill shifts more of the costs of health and pension benefits onto public workers in the form of increased contributions, while also freezing cost of living adjustments for retirees and raising the retirement age.

Christie, who helped shape the bill, has said he hoped to save $300 million from health benefit revisions, but a state treasury official testified at yesterday’s hearing that the bill would only save $10 million. Christie and lawmakers have until June 30 to fill the gap and approve his $29.6 billion budget for the next fiscal year.

In an effort to tamp down criticism, Sweeney made two last-minute changes to the bill: He locked in retirement benefits for current employees with at least 20 years on the job instead of 25 years, and broadened exceptions to a controversial provision that limits workers to in-state hospitals.

Political gift?

The New Jersey Education Association insists the provision was tucked in the bill as a gift to Sweeney’s longtime friend and political patron, George Norcross, who is the chairman of Camden’s Cooper Hospital, which competes with hospitals in Philadelphia.

But the 9-4 vote, including support from four Democrats — Brian Stack (D-Hudson), Jeff Van Drew (D-Cape May), James Beach (D-Camden), and Teresa Ruiz (D-Essex) — set up a vote by the full Senate on Monday, the same day the Assembly Budget Committee will hold its hearing. If approved, the full Assembly will vote on Thursday.

While Democrats control both chambers, a majority of them oppose the bill, so Sweeney and Assembly Speaker Sheila Oliver (D-Essex) — who accepted the deal much more reluctantly — are relying on Republicans to pass the bill.

Sweeney said he was not worried about being overthrown as Senate president by fellow Democrats. “I’ve been respectful of my colleagues and they’ve been respectful of me,” he said.

But union leaders said they felt betrayed by Democrats, who have historically fought for middle-class workers.

“Do not think you can sell us out in June and buy us back in November,” Barbara Keshishian, president of the NJEA, told the crowd outside the Statehouse. “I am mad as hell about politicians who were elected by the people but sell their votes to the powerful.”

Standing in the crowd, Andrew Magee, a Camden firefighter for 18 years, said he had battled two blazes and had hardly slept but felt compelled to attend the rally. He said he gave his best years to the city, only to be confronted by a deal hammered out in private and not at the negotiating table.

“They’re discarding me as Thursday morning trash, putting me on the curb,” he said.

“That’s how I feel.”

Staff writers Chris Megarian, Ginger Gibson, Matt Friedman, Sal Rizzo, Megan DeMarco, MaryAnn Spoto and Christopher Baxter contributed to t

As state Democrats prepare to introduce plan to overhaul public employee benefits, Christie's stance remains unclear

Published: Tuesday, June 14, 2011, 6:00 AM

 By Jarrett Renshaw/Statehouse Bureau 

Michael Mancuso/The TimesSenate President Stephen Sweeney (D-Gloucester) is shown in this file photo.

TRENTON — The state’s top lawmakers said Monday they cleared a significant hurdle in efforts to overhaul public employee benefits after agreeing to a plan that shifts more medical costs onto workers while protecting future collective bargaining rights.

The spotlight now turns to Gov. Chris Christie, who has been uncharacteristically quiet as Assembly Speaker Shelia Oliver and Senate President Stephen Sweeney hammer out the final details of a controversial bill overhauling pension and health benefits that is scheduled for its first legislative hearing on Thursday.

Sweeney (D-Gloucester) endorsed a plan Monday being promoted by Oliver (D-Essex) that would increase health benefit contributions for all of the state’s 500,000 public workers but allow unions to seek lower rates at the negotiating table starting in 2014.

"The sunset provision is certainly fair and is another example of the kinds of compromise we have been able to achieve with this legislation," Sweeney said in a written statement.

A spokesman for Christie, Michael Drewniak, said the governor had no comment on the sunset provision or the broader proposal.

Christie has spent the last 18 months as governor making his case for overhauling what he has contended are overly lavish pension and health benefits for the state’s public employees, often resorting to blunt criticism of them, their union leaders and Democratic lawmakers.

Sweeney and Christie recently agreed on a plan that shifts more of the costs of pensions and health benefits to public workers in the form of increased contributions, along with pushing back the retirement age and freezing cost-of-living adjustments for retirees.

The state’s unfunded pension and health liability combined is more than $110 billion, among the worst in the nation.

Leaders of the state’s public unions have mounted a fierce opposition to the proposal, urging members to reach out to legislators, lobbying in the halls of the Statehouse and issuing blistering news releases questioning lawmakers’ commitment to collective bargaining.

Sweeney has decided to bring the bill to the Senate floor despite lack of support from Democrats, and will rely on Republicans to approve the measure.

Facing similar opposition, Oliver has said she will not move the bill without "significant" support from Assembly Democrats, and it’s unclear whether the sunset provision has resulted in enough support to overcome that self-imposed threshold.

"The speaker continues to work to bring all sides together on a plan that protects taxpayers and worker rights and has no further comment," said Tom Hester Jr., a spokesman for the Assembly Democrats.

The sunset provision may attract lawmakers who were on the fence, but it will probably do little to persuade staunch supporters of collective bargaining, like Assemblywoman Bonnie Watson Coleman, whose district includes many state employees.

"Any legislative attempt to erode the rights of public workers is a mistake," said Watson Coleman (D-Mercer).

Under the Sweeney bill, all state and local public employees would pay a percentage of their health care premiums in a tiered system based on their salary. All employees who earn more than $110,000 would pay 35 percent of their premiums, while those at the other end of the pay scale would pay 3 percent, records show.

Still, the head of the state’s largest public employee union said the true cost to public workers is higher than advertised because it doesn’t take into account rising premiums. Public employees could pay more than $1,000 higher than expected if premiums rise by 6 percent each year, Hetty Rosenstein, president of the Communications Workers of America, said Monday.

"Sweeney assumes that health care costs will not go up a single dollar over four years, a deeply unrealistic claim that is all the more ironic given that his plan does nothing at all to implement cost containment strategies we know can save taxpayers hundreds of millions of dollars," Rosenstein said.

But Derek Roseman, a spokesman for the Senate Democrats, said the Sweeney proposal allows workers to choose from an array of plans, including less expensive ones that will allow workers to control their costs.