Originally published on Open Salon on June 26, 2011:
New Jersey’s public workers will pay their fair share as the state works its way out of a fiscal mess that was years in the making.
This past Thursday, the New Jersey Assembly passed a bill requiring public employees to pay substantially more for their health benefits and contribute more to their pension fund. The bill had already passed in the Senate, and it represents a major advance for Republican Governor Chris Christie in his agenda to bring fiscal order to the state. The governor relied heavily on bipartisan cooperation in order to move this bill through the legislature as Assembly Speaker Sheila Oliver, Senate President Stephen Sweeney, and a substantial number of other Democrats in both chambers lent their support in defiance of the state’s powerful public workers’ unions.
New Jersey’s public workers will now pay their fair share.
The fiscal crisis facing the state is indeed daunting. The system that pays out health and pension benefits for public workers is $120 billion in the red, according to the Newark Star Ledger. The new legislation will freeze cost-of-living adjustments to retirees until the pension system is funded to a level of at least 80 percent. Beyond that, depending on their jobs and income, public employees will have to contribute as much as 10 percent of their salaries to their pensions and pay up to 35 percent of the premiums for their health insurance. All new employees in the system will have to work for at least 30 years and wait until age 65 in order to get the maximum level of their retirement benefits.
To the casual observer, this all appears eminently reasonable. And from the point of view of many of the state’s taxpayers, employees in the state’s benefit system have long had it made.
Now, those workers will have to pay their fair share.
Interestingly, however, public employees in the state have been paying their fairly-negotiated share all along. For years they have been making contributions toward their pensions. What’s more, they have been contributing every penny they have agreed to put in, and before the state legislature took up the current reform, most employees in the system were contributing 5.5 percent of their salaries. Their employers, on the other hand, have not been as conscientious or responsible.
According to Fortune magazine, the state and its municipalities have continually failed to live up to their financial obligations regarding the state pension fund. In 1994, Governor Christine Todd Whitman began reducing payments by over $1 billion annually into the pension fund, and the shortchanging of New Jersey public employees has continued on a bipartisan basis until this day. True, the shortfall of funds in New Jersey’s public pension system has occurred partly due to troubles in the stock market, but elected leaders in New Jersey used investment gains in the good times as part of the rationale for the underfunding.
So, public employees are called upon to do their part to rectify the situation. It is interesting to note, however, that they are also being required to do more than their part.
Opponents of unions argue that the collective bargaining process has not worked, and that is why New Jersey finds itself in this predicament. How right they are. Something in the process is clearly flawed when one side refuses to live up to its promises and uses the negative consequences of its refusal to weaken the other side politically.
So something must be done. The legislation on Governor Christie’s desk takes away the unions’ collective bargaining rights on medical benefits for four years. We must not miss the injustice of this: workers have bargained collectively and honored the terms reached at the table; then, in return for this, they are deprived of a portion of their bargaining rights.
The unions involved here faced a grueling challenge. They were scapegoated and baited every inch of the way by Governor Christie, who played a devastatingly masterful game. Sadly, the leadership of these unions responded too often with precisely the sort of rhetoric that has fuelled unfavorable public sentiment for years. And union demonstrators banked everything on loud and polarizing tactics that in the best of times are only moderately effective. The unfortunate result of these uninspired strategies is clear: the taxpaying public sympathizes less with public employees now than ever.
So as the challenges grow for the state of New Jersey, everyone’s share of work grows as well as we must come together, make sacrifices, and bring about solutions.
And public employees will have to contribute their share to the effort.
A question then remains: will everyone?