A New Jersey court struck down Gov. Chris Christie's plan to cut contributions to its public pension system by $1.57 billion on Monday.
The ruling by Mercer County Superior Court Judge Mary Jacobson favors teachers, firefighters, state troopers and other New Jersey state employees who had sued the governor and state to make required pension contributions of $2.25 billion.
"In short, the court cannot allow the State to `simply walk away from its financial obligations,' especially when those obligations were the State's own creation," wrote Jacobson in the ruling, released a day before Christie is scheduled to make his budget proposal for the fiscal year starting July 1.
Christie, who approved the pension cuts in 2014 to offset low tax revenue, must now make up the contributions before the fiscal year ends on June 30, according to the decision, which also said the plaintiffs are entitled to counsel fees.
Christie's office said it would appeal the decision. Christie spokesman Michael Drewniak said in the statement that
"Once again, liberal judicial activism rears its head with the court trying to replace its own judgment for the judgment of the people who were elected to make these decisions. This budget was passed by the Legislature and signed by the governor with a pension payment."
Representatives of government employees, meanwhile, declared victory.
Damon Silvers, director of policy and special counsel for the AFL-CIO union, which was one of the plaintiffs, said the decision "reinforces what should be black letter law, pension promises by government to the people who work for government are real contractual obligations that must be honored and must be funded."
Christie, who is laying the groundwork for a presidential run but has not announced a candidacy, said reducing payments last year and this year was the only reasonable way for the state to balance its budgets after tax revenue fell short of expectations last year.
In the lawsuit filed in June, unions said Christie's move to reduce pension contributions to $1.38 billion from $3.85 billion through fiscal 2015 was a violation of employees' contract rights under the state and federal constitutions.
"This ruling is the predictable and unfortunate result of the governor's fiscally irresponsible decision," Democrats Assembly Speaker Vincent Prieto, Assembly Majority Leader Lou Greenwald and Assembly Budget Chairman Gary Schaer said in a joint statement. "We will be reviewing this ruling as we decide how best to proceed."
New accounting methods in November showed New Jersey's pension system funded at just 44 percent.
Christie had vetoed the fiscal 2015 payment, citing his constitutional responsibility to deliver a balanced budget.
The court noted that while the end of New Jersey's fiscal year was only four months away, it was conceivable that there may be revenue available by the time the pension fund payments are due as tax revenues may exceed expectations.
Illinois, which has the worst-funded state pension system in the nation, is also arguing that it lacks the cash to fully fund its public pensions, as it defends a 2013 law that cut retirement benefits.
Unions have claimed that law is unconstitutional, but Illinois has said its so-called police powers to fund and provide essential state services trump protections for public worker retirement benefits.