failure to comply with Chapter 78
arguments made by the NJ Attorney General on behalf of the governor
was that the ARC funding obligations under Chapter 78 were unconstitutional (although the attorney general did not also argue that the
increased contributions by employees were similarly unconstitutional).
In effect, what the governor argued before the court was that he supported Chapter 78, he pushed Chapter 78, the State Legislature enacted
Chapter 78, he signed Chapter 78 and he boasted about Chapter 78
nationally as evidence of his ability to fix the pension problem. Despite
all of this activity by the governor to push Chapter 78, he came to the
court arguing that what he did was unconstitutional. The court had no
problem rejecting the governor’s claim.
However, as to the FY14 budget, the court found that there was a true
emergency justifying the state’s failure to pay its ARC. Accordingly, the
court denied the unions’ motion to compel payment of the
contributions for FY14. At that time, the governor praised Judge Jacobson’s decision.
The court’s decision on FY15 was very different. Judge Jacobson determined that there was no similar emergency for FY15 and that the governor violated the law by shorting the payment by approximately $1.6
billion. The court concluded that the governor did not exhaust other possible options before violating the state’s funding obligations. In fact, it
appeared that the state had made little, if any, effort to find other alternatives. The court also noted that the state could not treat its pension
obligation on the same level as other policy alternatives because of the
language in Chapter 78. The court specifically noted that the governor
rejected the State Legislature’s FY15 budget even though it would have
at least significantly increased the state’s contribution. According to the
court, this fact alone demonstrated that the governor was not even trying
to find alternatives. The court further noted that Gov. Christie’s veto message did not contain any explanation as to why he chose to make the
particular budget cuts he did, and why he targeted employees’ contractual rights.
The Remedy
Although the court does no Ё