Trenton, NJ (Reuters) - New Jersey Governor Chris Christie struck a deal with the state’s teachers on a “roadmap” for pension reform while warning of a dire future if other unions do not make similar commitments to cut the surging cost of workers’ retirement benefits.
The agreement between Christie, a Republican weighing a bid for the White House in 2016 and the New Jersey Education Association, marked a dramatic turn in a long-bitter relationship.
“If we do not reform, next year we would be asked to spend nearly $8 billion on pension and health benefits,” said Christie, in his annual budget address on Tuesday afternoon in Trenton, the state capital. “Health costs alone consume nearly 10 percent of the budget.”
Christie and the teachers’ union have had an acrimonious relationship since he was elected governor in 2009, repeatedly clashing over his efforts to curtail benefits and overhaul tenure rules.
Under proposals documented in a report on the state’s website, the union’s existing pension plan would be frozen and replaced by a new one. Christie said he hoped other unions would follow suit.
The union said it would work in good faith at arriving at a solution but had not agreed on details.
“Some of what will be proposed is not feasible, and some of it unfairly burdens public employees and retirees,” it said in a statement. “While we believe some of the concepts in the report are worth exploring further, we have not yet agreed to anything in the report and we will not agree to some of what it contains.”
The tentative pact comes a day after Christie was dealt a setback by a state court judge, who ruled that his plan to cut $1.6 billion of contributions to the state retirement system violated its constitution. The cuts were one of the lynchpins in his effort to close a $2.7 billion budget gap projected through fiscal 2015.