By Brenda Flanagan
Correspondent
“I think it’s unfair to people that worked so long, and we can’t get an increase,” said Kim Turner.
Turner took it hard. The retired Mercer County caseworker won’t get any hoped for cost-of-living increases after the New Jersey Supreme Court ruled 6-1 that COLAs for public workers aren’t guaranteed. That’s $13 billion retirees won’t get back.
“Some of them can’t even buy all their medicine. They only get maybe 15 pills instead of getting the 30 pills. When taxes go up, they take from our money. When food goes up, we need an increase,” she said.
“Nobody is surprised by this decision. It is what we expected,” said CWA New Jersey State Director Hetty Rosenstein.
The ruling deeply disappointed organized labor, especially after the high court already ruled the governor was not required to fully fund pension payments.
“So it’s very serious for retirees. Usually our retirees are right up against it, right? You kind of live month to month and try to make it,” Rosenstein said.
“This is Chris Christie’s administration. This is what we’ve been dealing with — cut and hack and chop and everything and then at the end of the day when you have nothing left to cut, then what do you say? And then what do you say to the people that have served you for so long?” asked NJEA President Wendell Steinhauer.
Gov. Christie and state lawmakers froze COLAs for some 800,000 former and current public workers in 2011 arguing it would push the already insolvent pension system into insolvency. The unions sued and the Supreme Court today ruled, “The retirees could not reasonably expect perpetual COLAs” because they are a “benefit not guaranteed by the statute…subject to change by the Legislature.”
Senate President Steve Sweeney agreed, adding the pension system can’t afford COLAs right now.
“If you add the COLA to it, you might as well just end the pensions. I understand the frustration,” he said. “We didn’t end it. We suspended it. We suspended it until we could afford to pay it.”
Sweeney expects the police and fire pension systems are healthy enough to regain COLA raises soon, but says teacher and state worker pensions are far from that threshold and facing a $44 billion shortfall. Keeping the COLAs frozen benefits New Jersey’s credit rating, according to Moody’s analyst Baye Larsen.
“With today’s decision the state avoids a 30 percent increase in unfunded liabilities in pension costs. That would have been unaffordable given New Jersey’s current finances. Our rating currently is A-2 with a negative outlook and that negative outlook still stands,” said Larsen.
Fitch analyst Marcy Block says the state’s fiscal outlook remains troubled.
“Some additional reforms are going to be required otherwise other critical expenditures are going to get frozen out,” said Block said.
But while the COLAs stay frozen, Sweeney’s expected to soon post a referendum bill for the November ballot that would ask voters to support regularly scheduled pension payments.
“What the issue really comes down to, we need to fund the pensions in order to keep them out of trouble,” Sweeney said.
A Monmouth University poll shows 71 percent of registered New Jersey voters favor making regular payments into the state pension system as long as it doesn’t jeopardize funding for schools and roads.