New Jersey called Sept. 2 for the dismissal of a lawsuit by public worker unions that argues that Gov. Chris Christie is underfunding state employee pension plans.
Acting attorney general John Hoffman filed papers with Mercer County Superior Court asking the judge to dismiss the unions' complaint and amended complaints.
The unions have claimed that the state has made a contractual pledge to fund their employee pension systems at certain levels.
However, New Jersey's constitution "forbids the legislature from placing an unwilling populace in an eternal fiscal stranglehold," New Jersey assistant attorney general Jean Reilly wrote. The legislature may only make long-term financial promises after voters approve the promises in referendums, she wrote.
United States Supreme Court decisions make clear that state legislatures are forbidden from making appropriation promises for future legislatures, Reilly wrote.
Reilly claims these legally invalid promises were made in the "Chapter 78" law, which Christie signed in 2011. The law promised to gradually increase the state's funding of its pensions over the course of seven years until the state was fully funding at the actuarially required level.
In early 2014 Christie indicated that he thought the state's funding of pensions was crowding out other goals. In April New Jersey government announced that revenues were coming in much lower than projections.
In June Christie vetoed $1.57 billion in unfunded actuarial accrued liability pension payments from the fiscal year 2015 budget. This budget went into effect on July 1.
In the legal case in Mercer County Superior Court the unions are trying, among other things, to get the judge to order Christie to restore the $1.57 billion in funding.
The ratings agencies have said that the state's failure to adequately fund its pension plan is a credit negative for the state. The underfunding was a factor in the agencies' downgrades of the state to A-plus or the equivalent A1 in April and May.
