Christie faces another blow His "biggest" achievement, state pension reform, is likely to be dismantled by New Jersey courts.

Chris Christie’s signature achievement as New Jersey governor may be going up in smoke.

The potential presidential candidate has said his “biggest governmental victory” was a 2011 law meant to fix once and for all New Jersey’s notoriously bloated and insolvent public pension system by imposing deep cuts. But on Wednesday, Christie’s administration argued before the state Supreme Court that the law was unconstitutional, in a complex maneuver to defend $1.57 billion in additional pension cuts that appear to have violated its terms. If the court upholds a February lower-court judgment against Christie, as seems likely, the cash-strapped state must scramble to find the money before July 1.


The legal battle, initiated by state public employee unions, comes at a uniquely awkward time for Christie, following by less than one week the unsealing of two indictments and a plea agreement in the scandal over his administration’s role in forcing lane closures on the George Washington Bridge to punish a political adversary.

The 2011 pension law cut benefits by increasing employee contributions to the state pension fund and eliminating cost-of-living adjustments. When Christie signed it, his office pledged that it would “bring to an end years of broken promises.”

But subsequent tax revenues fell well below state projections, prompting Christie to unilaterally withhold state pension contributions. That was hard to square with language in the pension bill — the political price paid for legislated cuts — stating, “members of the public-pension systems shall have a contractual right to the annual required contribution amount.”

In court on Wednesday, New Jersey Assistant Attorney General Jean Reilly argued that use of the word “contractual” didn’t guarantee a binding contract because the New Jersey state constitution didn’t allow that. In response, Justice Barry T. Albin asked why, if the Christie administration believed the state constitution prevented such contractual obligations, it signed into law a bill containing them.

“The language is not aspirational,” Albin said. “The language is saying this is a contract.”

But Justice Jaynee LaVecchia suggested to attorney Steve Weissman, who represented public employees, that the state needs to maintain enough flexibility to adjust to changing financial circumstances. “You are still arguing for this law to require every legislature for I don’t know how long to put a certain specified amount … in the budget for every single year,” she said.

Nonetheless, none of this is likely to help Christie’s chances in the 2016 presidential contest. The trial comes as polls show Christie trailing former Florida Gov. Jeb Bush, Wisconsin Gov. Scott Walker and Florida Sen. Marco Rubio.

Patrick Murray, director of New Jersey’s Monmouth University Polling Institute, said that while a court ruling against Christie wouldn’t likely affect voters, it might well hinder fundraising. “If I’m a donor and sitting there,” Murray said, “why would I bother to take a risk on him?”

Indeed, many former Christie supporters are already shifting their loyalty to his key rival for support of the party establishment, Jeb Bush. These include New Jersey state Sen. Joe Kyrillos, who chaired Christie’s 2009 campaign; Brian Nelson, a lobbyist who led Christie’s gubernatorial transition team; New York Jets owner Woody Johnson; and Lawrence Bathgate, an influential New Jersey attorney.

The expectation within the legal community is that Christie will lose this case.

Even Stuart Buck, vice president of research and integrity at the Laura and John Arnold Foundation — an organization that public-sector unions revile for promoting reductions in pension benefits — says the 2011 law was “pretty clear” in prohibiting Christie’s $1.57 billion cut. “It’s kind of astonishing,” Buck told POLITICO, “for the governor to go back on that and try to withhold payments … that were promised by law.”

An adverse decision would not only require Christie and the state legislature to plug the $1.57 billion hole this year; it would also require them to revise next year’s budget, which currently allocates $1.3 billion to the pension systems — 3/10 of the state’s required contribution.

New Jersey’s efforts to reform its chronically underfunded public pension system long predate Christie’s governorship. According to Dean Baker, co-founder of the liberal Center for Economic Policy and Research, New Jersey has a “bipartisan tradition of not making pension payments.” Under nine governors — five Republican, four Democratic — the Garden State failed every year from 1997 to 2012 to pay its full annual required contribution. Sometimes the state paid less than 10 percent. The current shortfall is $40 billion.

Christie spokesperson Kevin Roberts said the governor remains committed to pension reform and “believes any additional revenue from fiscal year 2015 should be added to the state’s pension contribution when the payment is made in June.” According to Roberts, that amount may be as much as $200 million — well short of $1.57 billion.

Christie plans to request the money from the legislature, Roberts said, “at the appropriate time.”