New Jersey's Republican governor and Democratic state Senate president reached a deal Wednesday on legislation that would make public employees pay more for pension and health benefits, but Assembly Democrats refused to go along, leaving the bill's prospects in doubt.
The deal, which would have to be passed by both houses, is intended to shore up the underfunded systems by requiring bigger contributions from all public workers beginning July 1, a person who has been briefed told The Associated Press. The person insisted on anonymity because the deal has not been made official.
It also would mean that public workers' health benefits would be legislated, not negotiated, as they are now. Gov. Chris Christie has been pushing for legislative changes; union leaders have been opposed.
"This proposal destroys collective bargaining," said Hetty Rosenstein, state director of the Communication Workers of America, which has 55,000 state and local members. "It's completely unaffordable for anybody -- it does not one thing to actually save health care dollars, all it does is shift them."
Senate President Stephen Sweeney said the plan is a fair balance between employee and taxpayer interests.
But Democrats who control the Assembly left a closed-door caucus meeting Wednesday without agreeing to support any bill legislating health benefits for union workers, a person who was in the session told The Associated Press. The person insisted on anonymity because the meeting was private.
New Jersey is among several states where Republican governors have moved to restrict collective bargaining.
In Wisconsin, a lawsuit is before the state Supreme Court over a law that calls for almost all public workers to contribute more to their health care and pensions and strips them of nearly all their collective bargaining rights. A new law signed by Ohio Gov. John Kasich in March limits bargaining by public employee unions, affecting about 350,000 police, firefighters, teachers and other public workers. The Ohio law has not yet gone into effect and opponents are collecting signatures in an effort to put the issue on the November ballot.
In Michigan, the Republican state Senate has passed and sent to the House measures to require most public employees to cover at least 20 percent of the cost of buying their health insurance coverage, with some flexibility for local bargaining units.
Collective-bargaining changes may be a harder sell in New Jersey, where Democrats control the Legislature and all 120 legislators are up for re-election in November.
"It's my personal opinion that (health benefits) should be done at the bargaining table," Assemblyman John McKeon, a northern New Jersey Democrat, said after the caucus meeting.
Assembly Speaker Sheila Oliver acknowledged the lack of agreement among her 47 members in a statement issued late Wednesday.
"I continue to believe that we need health benefits reform to protect taxpayers, but I have maintained all along that there needed to be significant support in my caucus to move forward. We are not there yet," Oliver said. She said talks would continue.
There is more support among Assembly Democrats to increase workers' pension contributions, but the lawmakers haven't agreed to specific legislation, according to the person who attended the meeting.
Christie's office did not respond to messages for comment throughout the day.
New Jersey's pension and retirement health systems are both underfunded by tens of billions of dollars. The proposal is designed to reduce the long-term indebtedness of both systems.
One provision of the deal would require the state to make its annual pension payment. Governors of both parties have skipped or greatly reduced their pension contribution in most of the past 20 years.
The deal would raise pension contributions immediately by at least 1 percent for public workers such as local police and firefighters; teachers; state police; and state, county and municipal workers. Judges, who now put 3 percent of salary toward their pensions, the least of any public worker group, would see that amount increase to 12 percent.
The deal also would require employees to pay more for health care under a new salary-based contribution formula that would be phased in over four years. The rate would be as high as 35 percent of the cost of the premium for top wage earners and as low as 3 percent for the lowest-paid employees. Most workers now pay 1.5 percent of their salary toward health care regardless of the cost of their plan.
Under the proposal, which is subject to change, public workers earning $40,000 would pay 7 percent of the cost of their health insurance for a family plan or 14 percent for single coverage, after the phase-in.
The proposed state budget for the fiscal year that starts July 1 relies on more than $300 million in savings from health benefits reforms.
Jeffrey Keefe, a labor and employment relations associate professor at New Jersey's Rutgers University, argues that state and local workers are generally undercompensated compared with their private-sector counterparts.
"They are compensated differently," he said. "Public workers earn lower wages given their level of education but generally get better benefits," he said, noting that they don't get to participate in things like profit-sharing.
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