Union pressure fails, for once, to kill pension bill Budget panels' votes mark a rare rebuke Sunday, June 22, 2008 • BY DUNSTAN McNICHOL AND JOE DONOHUE • Star-Ledger Staff After a decade in which lawmakers repeatedly opened the public purse to boost retirement benefits for the unionized workers who help bankroll many of their campaigns, leaders of the state's major unions found themselves in an unusual position Friday night. Days of lobbying, hundreds of thousands of dollars in high-profile advertising and pickets dispatched to lawmakers' hometowns across the state had blunted a proposal to trim the cost of retirement benefits -- but did not kill it. In the cavernous Senate hear ing room, Democrats and Republicans joined together after 9 p.m. to overwhelmingly approve a scaled- back version of the pension reductions that the powerful unions had railed against for days. For labor groups who had seen lawmakers vote 17 times since 1999 to boost their benefits by nearly $7 billion, the hotly debated vote marked a rare instance of getting rebuffed. "We are deeply disturbed by the direction that this debate has taken," said Bob Master, legislative liaison for the Communications Workers of America, the state's largest public employees union. The pension bill faces its biggest test tomorrow, when the full Senate and Assembly vote. Both houses also will vote on a $32.9 billion budget that scales back homeowner rebates, aid to towns and help for hospitals. While union leaders accused them of betrayal, lawmakers said the action was needed to shore up a pension fund that is underfunded and overdrawn, and to reduce pressure on future state budgets. "The feeling was that something had to be done," said Senate Budget and Appropriations Committee chairwoman Barbara Buono (D-Middlesex), who sponsored some of the pension reforms. "We want to be able to keep New Jersey solvent," Assemblywoman Alison Littell McHose (R-Sussex) said as the Assembly's budget panel voted 12-0 for the measure. "This is about the future and what we can afford to pay." The bill endorsed by the budget panels would raise the retirement age to 62, an addition of two years, for newly hired teachers and public employees. It also would eliminate the Lincoln's Birthday holiday for state workers after their current contract expires in 2011, and it would preclude part-time workers from earning pension credits for any year in which they earned less than $7,500. That is a jump from the current thresholds of $500 a year for teachers and $1,500 for state workers, although it falls far short of the 30-hours-a-week standard Buono originally proposed. Senate Majority Leader Stephen Sweeney (D-Gloucester) also got less than he wanted: He failed in a bid to base retirement benefits on the average of five years' pay, rather than the current standard of three years. But when that proposal fell, Sweeney successfully pushed the plan to cut Lincoln's Birthday from the roster of state worker holidays. BITTER FEELINGS The lawmakers' decision to ad vance even such modest reforms placed them in opposition to some of their most generous campaign supporters. New Jersey is the fourth-most unionized state in the nation, and unions provided one out of every 10 dollars spent on the 2001 campaign that restored Democratic control of the governor's office and Legislature. Joyce Powell, president of the powerful New Jersey Education Association teachers union, lashed out at lawmakers as committees considered the reform bills. "In the end, this entire process will have been a cruel charade," she said, claiming the bill will save little and won't limit pension abuses. "All you will have accomplished is hurting the most vulnerable." NJEA officials say they rallied more than 10,000 teachers to picket outside lawmakers' district offices Friday to protest the measures. Betty Levine was one of the 300 protesters outside the offices of Sen. Joseph Pennacchio (R-Morris). "They want to ban people from having two jobs, to punish people who are bus drivers or lunch ladies, who are working hard to make a living," she said. But Sen. Kevin O'Toole (R- Essex), who voted for the measure Friday night, said it would help workers who are counting on a solvent pension system in their retirement. "We have to understand there's a problem," he said. "If we do nothing, this will go bankrupt, whether we want to recognize that or not." Gov. Jon Corzine was lukewarm to the pension measure last week. A vocal supporter of unions during his first two years in office, the governor said the Legislature's changes were largely unnecessary in light of contracts he negotiated that will cut retirement costs by $6.4 billion through 2022. If the bill is enacted, Master said, the CWA may challenge it in court. He and Powell said it would violate collective-bargaining principles by overturning contract provisions from last year's negotiations. Buono countered that unions didn't complain when legislation was used to boost their benefits in past years. Heated debate over the pension proposals had paralyzed the Legislature amid the budget debate late last week, fraying nerves. The sun had set on the longest day of the year Friday when beaming legislative leaders emerged from the fourth-floor office where they had cloistered Buono and Sweeney for more than an hour. "It was a tough hurdle," said Senate President Richard Codey (D-Essex), who helped broker the deal. "It wasn't Mount Everest, but it was close." Staff writer Robert Schwaneberg contributed to this report. © 2008 The Star-Ledger. Used by NJ.com with permission.