Westfield Residents Mixed On New NJ Pension Law
Residents guarded on bill signed by Gov. Christie this week.
Mike Bukowsky's vacation has turned into the dog days of summer.
As the physical-education teacher at the Washington School was lunching on a wrap at the Westfield Diner, he said he'd be spending the last day of the school year waiting for word on the New Jersey Assembly's vote last week on Gov. Chris Christie’s proposal to change public employee pension and healthcare benefits.
The state Senate passed the bill last Monday by a 24-15 vote, with the Assembly following suit with passage last Thursday evening by a 46-32 vote. Christie signed the bill into law this week.
Prior to last week's vote, rank-and-file members of unions around the state demonstrated in front of the Statehouse in Trenton, local union leaders have been silent regarding their opinions on the bill. Some have not returned messages left for comment, while Westfield Education Association President Kim Schumacher declined to comment on the bill.
“I’m worried about my future,” Bukowsky said. “I am at a loss because I am worried about what it will do to us in the future.’
Bukowsky has been a teacher for 10 years. His wife, Lisa, a third-grade teacher at the same school, has one more year of service than her husband. He said his wife and other teachers he knows have been discussing the impact of the new law on their paychecks. Under the new proposal, they will be paying an extra 1 percent of their gross salaries towards their pensions starting on July 1, and an additional one-percent over the next seven years for a total of eight-percent.
Police and firefighters will also pay an additional 1.5 percent of their salaries toward their pensions, for a total of 10 percent, starting on July 1. Teachers and non-uniform employees will have the retirement age pushed from 60 to 65; they won't be able to take early retirement until they've and and would need to work 30 years to be eligible for early retirement, instead of the present 25. The bill also eliminates the automatic cost-of-living adjustments, which have raised annual pension payments.
Further changes in the bill also will require public employees — from teachers, firefighters and members of police forces to DPW employees and other municipal workers — to pay more for health-care benefits. These payouts will be increased based on salary; workers can select one of two options medical treatment. Employees can opt into a more expensive plan, which will allow them to seek treatment either in-state or outside of New Jersey. The basic plan will prohibit public employees from seeking medical treatment outside of New Jersey, and using their health plans, unless the only treatment available is in another state.
The state's public employees pension system encompasses five separate funds covering teachers, local and county police officers and firefighters, state and local government employees, judges and the state police. The state pension division also operates a separate program for part time state college instructors, along with a new defined benefit program for public employees hired after 2010. The legislation tackles the five pensions funds.
Christie's legislation is being offered in response to projections that the pension fund is underfunded by $54 billion, along with the state's overall fiscal crisis. Administrations since Gov. Christie Whitman in the mid 1990s have deferred state contributions to the retirement programs. Last year, Christie did not make a $3 billion contribution to the system.
While Bukowsky, like many public employees who've been marching on Trenton over the last few months, is worried that the givebacks will make it difficult for them to work and live in New Jersey, many area residents, in and out of local government, support the legislation.
“The state is in such trouble, we need to start raising revenue for the state and cost reduction,” said Scotch Plains resident William Kiamie, a private sector retiree whose daughter and nephew are retired public school teachers in Union County. “That’s what (Christie) is doing. Public pensions are raised at the cost of living index. I’ve been out 25 years and my company doesn’t adjust my pension. Why should public employees get a change? I think he’s being prudent.”
For other residents, their support of the legislation mixes political alliances and pragmatism.
“We like Governor Christie and he’s doing the right thing,” said Westfield resident Phyllis Rayner. “The state’s in terrible shape.”
One Clark resident, who said he's pro-legislation, is likely facing a lively debate at home.
“My wife is a teacher and it is nice to go along without paying,” said Gary D. of Clark, who declined to give his last name. “Working in the private sector, myself, and paying for a long time, I am in favor of having them pay a bit for their benefits.”
A poll on Westfield Patch's Facebook page yielded a surprisingly light debate on an issue that has been brewing for years as the Garden State struggles to meet its financial obligations while dealing with increasing costs for their employees, with nine votes in favor of the bill and four in opposition. One comment was left on the page in support of the legislation, earning one "like" from another visitor.
An open discussion thread posted on Patch showed support from both sides. A commenter named Jim LaRegina placed blame for the issues with Christie’s fellow Republicans, quoting publications saying that former Governor Christie Whitman’s tax cuts and pension borrowing in the 1990s contributed to an underfunded pension system. LeRegina said that the state should address health care and prescription drug costs before asking employees to contribute to more. Fourteen comments were posted in the discussion thread, including those supporting changes to the pension system.
Westfield teachers have been making higher health care contributions for more than a year. The new teacher’s contract, passed last year by the Board of Education, traded 3.9 percent annual pay raises for each year in the three-year contract for several hundred dollar increases health care co-pay rates and prescription drugs. The contract was a lightning rod for criticism in school elections, with residents asking the Board of Education to reopen the contract to discuss the pay raises, which were approved days before the state cut the town’s school aid by $4.22 million. BOE leaders and Schumacher have declined to reopen the salary component of the contract.
BOE member David Finn said he favors the bill and said it should be able to help the school district.
“It is a good thing for the school children and taxpayers of New Jersey,” Finn said. “When it comes time to negotiate with the unions in the district one of the items we usually negotiate that has the highest cost increase year-to-year is health benefits. We will be able to control these costs. We can assume the tax increase based on increased costs will be brought under control and we will have more money for classrooms.”
Finn said he believes the working relationship the board has with the district’s unions will be improved by the bill. BOE members have long touted the board’s relationship with the unions as a benefit during negotiations. Finn said the new health care benefits will put the district’s employees on the same playing field as those in the private sector.
“The employees of the school district will have a vested interest in being a good consumer of their health dollars as it is in corporate America,” Finn said.
Finn’s support for the bill was being echoed in the Municipal Building, as town government leaders said the proposal will help them control costs in the municipal budget. Town and school leaders have been advocating for new measures on cost controls since the passage of the 2 percent property-tax cap last year.
“It’s a win-win,” said Councilman Sam Della Fera, the vice chairman of the Council’s finance committee. “It will require our municipal employees to contribute to their own pension benefits.”
Della Fera, a Republican recently nominated to the state’s Higher Education Assistance Authority by Christie, said he did not have the exact numbers of how the bill will help in Westfield, but said it would help in the drafting of the next budget. Della Fera is considered a possible next finance committee chairman, after current finance chairman Councilman Mark Ciarrocca resigns from office to assume a state judgeship.
Ciarrocca declined to comment on the proposal, deferring calls to Della Fera, due to his judicial nomination by Christie. Ciarrocca, who was informed of the bill’s impact on judicial pensions and benefits by Assemblyman Jon Bramnick (R-Westfield) during a press conference Tuesday evening, declined to comment on the impact to his future pay if confirmed to the judgeship.
Support for the legislation has bipartisan support in the Municipal Building, with Councilman Dave Haas, the Council’s sole Democrat and the town Democratic chairman, endorsing the bill. Haas, a long time member of the finance committee, said he would have preferred the changes to be made during the collective bargaining process to allow for input from union leaders in the drafting, but he said a change is needed in the state.
“It will help our bottom line, there is no question,” Haas said of the local impact.
Haas said the only issue he could see in doing the change at the bargaining table is the state’s current arbitration rules, which local government leaders have long complained have favored unions. Christie has offered proposals to change arbitration rules in the state that remains pending in the legislature.
While local government leaders cheered the bill and said it will help the public purse, Bukowsky said his thoughts remained firmly on his own bank account. Bukowsky said he and his wife, both in their early 30s, are both thinking in the long term regarding the proposal.
“How can we keep up with the cost of living in New Jersey?” Bukowsky asked. “I don’t know, it will be difficult. New Jersey is not getting cheaper.”