Monday, February 23, 2015
A New Jersey trial judge today ruled that Governor Chris Christie's cut to the state's public pension system violated the state and federal contracts clauses. Along the way, the judge also ruled that the state's contractual obligation to fund its public pension system did not violate the state constitutional Debt Limitations Clause and Appropriations Clause, and did not impermissibly infringe on the governor's line-item veto power. Oh, and she also ruled that the trial court had jurisdiction over the case, and that it didn't present a political question.
In a case that "implicate[s] the fragile balance at the heart of the legislative process . . . where political, constitutional, and judicial forces appear to collide," this ruling has a little something for everyone.
As a result of earlier litigation, the state has a statutory obligation to fund its public pension system. And the statute is written to create a contract right on the part of public employees--so that any decision not to fully fund the system immediately implicates the state and federal contract clauses. So when Governor Christie wielded his line-item veto pen to cut the state contribution out of the legislature's appropriation bill (because of unexpectedly low revenues), the plaintiffs were waiting in the wings with their contracts clause claims. And the judge agreed with them. That part of the ruling is unremarkable.
But the Governor's creative defenses--and the court's rejection of them--demand some attention. The governor argued that the statutory obligation to fund the public pension system violated the state constitutional Debt Limitations Clause (which limits state borrowing burdens) and the Appropriations Clause. Moreover, Governor Christie said that the statutory obligation intruded upon his executive power to veto legislation. The court reviewed the text, history, and cases on the relevant state constitutional provisions and concluded that they did not override the state's statutory obligation to fund its public pension system.
The ruling means that the state has to find $1.57 billion to fund the system. Governor Christie will likely appeal.