A New Jersey state judge ruled against Gov. Chris Christie's underfunding of state pensions in the state’s fiscal 2015 budget.
The ruling came Monday, just a day before he is scheduled to release his 2016 budget proposal.
State Superior Court Judge Mary Jacobson issued a written decision siding with multiple public employee unions who filed a lawsuit against the Republican governor after Christie in June vetoed a $1.57 billion pension payment from the state budget. The $1.57 billion was enough to fully fund New Jersey’s actuarial liability for the year.
The unions had argued that a 2011 law implementing a scheduled ramp-up of the state's pension funding for seven years created a contractual right for the money to go to employee pensions.
"The court cannot allow the State to simply turn its back on its obligations to New Jersey’s public employees--especially in light of the fact that the State’s failure to make its full payment constitutes a substantial blow to the solvency of the pension funds in violation of plaintiffs’ constitutional rights, " Judge Jacobson wrote in her ruling. "The court cannot allow the State to 'simply walk away from its financial obligations,' especially when those obligations were the State’s own creation."
Jacobson had ruled last June that Christie could adjust pension payments for 2014 because state had few financial options in a short time frame to balance its budget, but added that a "different analysis could very well be required for fiscal year 2015." Oral arguments from both sides were presented to Jacobson in Trenton on Jan. 15.
In his State of the State address on Jan. 13, Christie described the state's pension problems by saying every family would need to write a check for $12,000 to close New Jersey's budget gap. New Jersey only made 28% percent of its required pension payment in 2013, which marked the lowest among U.S. states, according to data from Loop Capital Markets.
Christie's office could not be immediately reached for comment on the ruling and his plans to appeal. He is slated to present his budget plan to the state legislature on Tuesday.
Jacobson stated in her ruling that while the end of the 2015 fiscal year is just over four months away, "it is conceivable" that other revenue could become available in that stretch when pension payments are due.