I suppose this is a victory of sorts, but it’s bound to be a short lived one. New Jersey Governor Chris Christie is still trying to balance tax cuts and economic stimulus with the albatross of a massive public worker pension plan hanging around his neck. The budget simply wasn’t going to be able to cover the full scheduled payments for the current period, so Christie moved to scale back the funding. The unions, of course, immediately sued the state. After losing one battle in the appeals process, the Garden State’s high court has weighed in and said that it’s basically not up to the judicial branch to settle this one.
Governor Chris Christie won a decisive victory over New Jersey unions when the state’s highest court ruled he isn’t required to fill a $1.57 billion pension budget gap, defusing an issue that hung over his potential presidential campaign.
While the ruling averts an immediate cash crunch, the pension hole continues to restrain spending on schools, tax relief and municipal aid. Christie has vowed not to raise taxes even as he acknowledges there’s no alternate plan for closing a deficit that may top $2.7 billion through June.
The New Jersey Supreme Court ruled it’s up to the state legislature to resolve the funding issue.
“That the state must get its financial house in order is plain,” the court said Tuesday in a 5-2 decision. “The need is compelling in respect of the state’s ability to honor its compensation commitment to retired employees. But the court cannot resolve that need in place of the political branches.”
There is still at least one more union lawsuit pending and the deadline for Christie’s budget comes at the end of the month, with no date set for the legislature to vote on it at this time. Obviously the Democrats would love to force Christie into agreeing to a big tax hike to cover the shortfall. This would accomplish multiple goals for them. First and foremost, it puts the money back in the budget to pay off the unions and their pension plan. But it also delivers a black eye to the Governor (who has pledged not to approve a tax hike) and further damages his national aspirations… assuming he still has any.
On the meta-scale, the liberal wing of the party gets to claim that GOP policies “just don’t work” and that conservative tax cut plans are unsustainable. This is the larger goal for the Democrats across the nation has we head into election season. We’re seeing similar stories play out in Illinois with Governor Rauner and for Bobby Jindal in Louisiana as well. If progressives can convince independent and undecided voters that a big government agenda – along with the big price tag that goes with it – is the only way to go, then they can run the table on us.
The problem for Christie, at least as far as I can tell, is that there doesn’t seem to be a clear end game. He needs either some sort of agreement with the unions to restructure the deal and reduce benefits (good luck with that) or a court order to do so and save the state from bankruptcy. But the courts seem disinclined to get involved. If the only solution is to allow New Jersey to go fully into insolvency and let a third party force a new deal with the unions, that might bail out the citizens, but it puts a big dent in Chris Christie’s viability. So this “win” in court is, as I said, likely a very temporary one.