– New Jersey Makes It Official: The Slashing Of Public Employee Benefits Has Begun (Business Insider, Jun. 24, 2011):
New Jersey lawmakers voted to pass Governor Christie’s sweeping cuts in public worker benefits last night.
Despite the 8,500 protesters outside the capital building and a loud public outcry, the bill passed with a vote of 46-32.
It now goes to Christie’s desk for his signature.
According to the Star Ledger, opponents of the bill successfully convinced lawmakers to remove a provision restricting workers access to out-of-state medical care, but failed to stop a historic defeat for New Jersey’s unions.
Thirty-two Democrats opposed the bill, but 14 voted for it, causing protesters in the balcony to shout, “Shame on you!”
The bill effectively ends collective bargaining for medical benefits on behalf of 500,000 public workers.
Police, firefighters, teachers, and all public workers will pay more for their benefits. The new bill:
- Requires current employees to give up more of their salary into the pension system.
- Eliminates annual cost of living increases.
- Pays a percentage of their health care premiums in a tiered system based on their salary.
- Requires new employees to work longer to get full benefits.
- Contractually requires the state to make payments into the health fund.
- Appoints a labor-management board system to be put in place to monitor the system.
- Removes up the governor’s right to impose a contract and instead appoint a mediator if impasses arise.
Effective immediately teachers and state employees will increase their pension contributions from 5.5% to 6.5% with another 1% increase phased in over seven years.
State police, firefighters, and municipal law enforcement will increase their contributions from 8.5% of their salary to 10%.
Judges will see increases from 3% to 12% contributions.
New Jersey has a $54 billion shortfall in its pension system, one of the highest in the nation. Christie says the bill will save $3 billion over the next 10 years and $130 billion over the next 30 years.