New Jersey Senate Passes Public Employee Benefits Bill

Trenton, NJ – Bucking the state's powerful public employee unions, the New Jersey Senate on Monday passed a bill requiring sharply higher contributions for health benefits and pensions from more than a half-million government workers, while suspending unions' ability to bargain over health care.

As a gallery full of raucous union members looked on, the upper chamber moved the legislation with support from Republicans and a few Democrats in a 24-15 vote. It must still get through an Assembly committee, where it was also being considered Monday, and then pass the entire lower house before it reaches the governor's desk. The full Assembly is scheduled to hear the bill on Thursday.

Republican Gov. Chris Christie, the driving force behind the landmark legislation, praised the Senate for its action.

"This is a watershed moment for New Jersey, proving that the stakes are too high and the consequences all too real to stand by and do nothing," he said in a written statement.

"As a result of Democrats and Republicans coming together to confront the tough issues, we are providing a sustainable future for our pension and health benefit system, saving New Jersey taxpayers hundreds of billions of dollars and securing a fiscally responsible future for our state."

An amendment removing a potential deal-killer -- a provision to limit public workers' access to out-of-state medical care unless similar care wasn't available in-state -- was approved earlier in a 24-14 vote. Under the new legislation, new health care boards would create insurance plans that include only in-state providers, as well as other plans that would include coverage for out-of-state providers.

Employees would be able to choose the plan they want. Patients under the in-state plan would be able to get a note from their primary care doctor allowing them to see out-of-state providers, and patients who already use out-of-state doctors would be allowed to keep them.

The legislation is intended to shore up badly underfunded retirement systems. A new tiered system would require teachers, police and firefighters and other public workers to pay a portion of their health insurance premiums based on income. Pension contributions would also rise by 1 percent immediately, and by an additional percent or more after a seven-year phase-in.

Public-sector unions are vehemently opposed, in part because the measure limits collective bargaining over health care. Hundreds turned out at the Capitol on Monday for another day of protests that started with a march across the Delaware River into Trenton.

The bill was moving through the Legislature as a result of a deal struck among Senate President Stephen Sweeney, Assembly Speaker Sheila Oliver -- both Democrats -- the governor and GOP legislative leaders. Bill Dressel, the head of New Jersey's League of Municipalities, told lawmakers the state's unfunded pension liability is "a ticking time bomb" that they now have a chance to defuse.

Sweeney said the changes "will ensure that we are able to live up to our goals of keeping more of our health care dollars in New Jersey while not eliminating the choices that are so important to employees and their families." Senate Majority Leader Barbara Buono said the health care provision, even after being amended, is still too restrictive.

"I don't think there is any physician that would knowingly sign this certification," she said. "It doesn't need to be watered down. It doesn't need to be amended. It needs to be stricken."

More than 3,000 public workers showed up at the statehouse Thursday to protest when the bill was up for a vote in a Senate committee.

On Monday, hundreds returned. Protesters in Revolutionary War costumes gathered in Morrisville, Pa., and marched across the Delaware River in what union officials called "the second Battle of Trenton." Union members also set up more than 125 tents on a lawn behind the statehouse, along with a mock graveyard for collective bargaining rights. Public employee unions want any changes in their benefits made at the bargaining table, not through legislation.

"This is the defining moment for the labor movement in our generation," New Jersey AFL-CIO President Charles Wowkanech wrote in an email to enlist support for the rally, the latest and most ambitious of several recent Capitol protests.

A provision to allow collective bargaining over health care to resume after four years did little to quell union objections.