State worker unions resist forced reform Pension cuts should be negotiated, they say Tuesday, November 28, 2006 • BY ROBERT SCHWANEBERG AND DUNSTAN McNICHOL • Star-Ledger Staff As lawmakers formally proposed cutting back pension and health care benefits for future public employees, leaders of their unions insisted yesterday any such changes must be made at the bargaining table. "We will negotiate our future. But we will not have the governor and Legislature dictate our future," Larry Cohen, president of the Communications Workers of America, declared at a Statehouse news conference that sounded more like a rally. As he spoke, Clifton firefighters held aloft a banner proclaiming: "Benefits are negotiated, not legislated." A dozen lawmakers made cameo appearances voicing their solidarity with the labor movement. An hour later, the Joint Legislative Committee on Public Employee Benefits Reform --one of four set up to explore ways of cutting New Jersey's highest-in-the-nation property taxes -- approved a 185-page report making 41 recommendations. They include changing the pension formula to provide less generous benefits for future hires and requiring all public employees to pay part of the cost of their health care coverage. Sen. Nicholas Scutari (D-Union), the co-chairman, said the changes in health care benefits would have to be negotiated but other reforms could be accomplished legislatively. "Clearly, we can legislate pension reform," Scutari said. He said changes are needed to keep the state pension system solvent. One proposal would prevent the state from taking any more "holidays" from its obligation to make annual contributions to the pension funds. "The last thing the unions want is to see the pension system go bankrupt," Scutari said. "This isn't us versus them." Union leaders endorsed reforms aimed at pension abuses -- such as municipal attorneys bundling part-time employment with many towns to accumulate large pensions -- but said others go too far. Joyce Powell, president of the New Jersey Education Association, said the proposal to set up dual pension systems with less generous benefits for workers hired in the future is the "most troubling." She predicted that would discourage people from becoming teachers and may have the "unintended consequence" of increasing retirements. "We don't want people to leave because they're worried that something will happen to their pension, their health benefits," Powell said. Later, the special committee set up to review school funding approved 28 recommendations that do not include the centerpiece of its work: a new formula for distributing about $11 billion in state aid for public schools each year. The Democratic co-chairs said the actual funding formula will probably be delivered by early next year. "I think we've got the framework," said Sen. John Adler (D-Camden), the co-chairman. "Most of the formula is, at least conceptually, done." Committee members have promised a formula that will deliver adequate aid to every community in the state based on the needs of each student who lives there. They have proposed reworking the portion of the formula that calculates the amount each community can afford locally in a way that will boost state aid to towns with high senior citizen populations, and have proposed expanded support for preschool and kindergarten programs. But the committee failed to calculate how much it will cost. "We have not seen a formula," said Assemblyman David Wolfe (R-Ocean), one of the two Republicans on the six-member committee who voted against approving its 115-page report. "How much is it going to cost? Where's the money going to come from? How is the money going to be distributed?" Wolfe and fellow Republican Sen. Gerald Cardinale (R-Bergen) submitted a minority report calling for the state to pay at least 35 percent of school costs in every community, while requiring local residents to pay at least 35 percent of costs. Currently, the state's poorest communities have better than 90 percent of their school costs covered by the state while wealthier towns pay more than 95 percent of school costs with local taxes. Robert Schwaneberg covers legislation. He may be reached at rschwaneberg@starledger.com or (609) 989-0324. © 2006 The Star-Ledger. Used by NJ.com with permission.