TRENTON — The state Supreme Court ruled on Tuesday that Gov. Chris Christie had the legal right to slash $1.57 billion in contributions to New Jersey's troubled public employee pension system, averting a fiscal crisis just weeks before the end of the budget year.

The ruling, which reversed a lower court decision, was the culmination of an intense fight for pension funding and dealt a major blow to the state's labor unions, who challenged Christie's cuts.

By having the court rule in his favor by a vote of 5-2, the governor succeeded in dismantling the landmark pension law that he had helped craft in 2011.

"That the state must get its financial house in order is plain. The need is compelling in respect of the state's ability to honor its compensation commitment to retired employees," Justice Jaynee LaVecchia, an independent who was appointed by Gov. Christie Whitman, a Republican, wrote for the majority. "But this court cannot resolve that need in place of the political branches. They will have to deal with one another to forge a solution to the tenuous financial status of New Jersey's pension funding in a way that comports with the strictures of our constitution."

Three Christie appointees -- Justices Anne Patterson, Faustino-Fernandez Vina and Lee Solomon -- joined LaVecchia's opinion, as did Judge Mary Catherine Cuff, a Democrat who is temporarily filling a vacancy on the court.

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Tuesday's much-anticipated ruling spares Christie from trying to scrape together $1.57 billion before the end of the current fiscal year in three weeks and billions more in future budgets.

Christie, who is in New Hampshire ahead of a widely expected run for president, called the decision "an important victory not only for our taxpayers who simply cannot afford these unsustainably high costs, but for limited, constitutional government that recognizes the proper role of the executive and legislative branches of government."

Several union leaders said the fight was not over.

Christopher Burgos, president of the State Troopers Fraternal Association of New Jersey and the lead plaintiff in the suit, said Tuesday the union will petition the U.S. Supreme Court to review the ruling.

"It is our obligation... to exhaust every legal avenue available and not just wave the white flag of defeat," he said.

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Hetty Rosenstein, state director of the Communications Workers of America union, the largest state worker union, also said union leaders might appeal the ruling to the federal courts or push for a new constitutional amendment in New Jersey to secure pension funding.

"We are not going to tear up this pension plan," Rosenstein said. "We are going to win, and we are going to save the pensions for hundreds of thousands of people in New Jersey."

The case turned on whether the law passed by the Legislature in 2011, at Christie's urging, created a contractual right to pension funding for 770,000 current and retired public workers.

The court stopped short of calling the pension law unconstitutional, but said the law does not create a "legally binding, enforceable obligation" for the state to make payments into the system.

The pension law, which the governor had called his "biggest governmental victory" and a "model for America," won Christie national attention and acclaim. He boasted that the cuts to health and retirement benefits would save tens of billions of dollars over the coming decades by suspending cost-of-living adjustments and requiring workers to pay more for their benefits.

Christie partnered with Democratic leaders from both legislative houses to defeat New Jersey's powerful unions, who protested the far-reaching plan by the thousands, and the majority of Democratic lawmakers.

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The law also gave workers a contractual right to pension funding, which the state had agreed to ramp up over seven years until reaching the full amount recommended by actuaries.

But the administration's hope for a robust economic recovery fell short when the state didn't take in enough tax revenue to meet the payment schedule in the 2014, 2015 and so far, 2016 budgets.

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Nonetheless, labor leaders said the $1.57 billion payment cut by Christie was deferred compensation owed to public workers who had at unglamorous jobs for public sector wages.

Before the 2011 pension overhaul, most workers had a nonforfeitable right to their benefits, but not to the state's contributions. The bipartisan pension law was drafted to close that hole, forcing the state to keep up with payments and to right a feeble retirement system.

The Christie administration had argued the pension law clashed with the appropriations and debt limitations clauses in the state constitution, saying that creating a contractual right to pension funding would bind the hands of future lawmakers and burden New Jerseyans with debt without their consent.

The court said Tuesday that the state cannot be bound to future payments without voter approval.

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"Although plaintiffs correctly assert that a promise was made by the legislative and executive branches when enacting (the law), and morally their argument is unassailable, we conclude that (the law) could not create the type of legally enforceable contract that plaintiffs argue," the majority decision said.

In the dissent, Justice Barry Albin and Chief Justice Stuart Rabner faulted Christie for impairing workers' contractual rights in violation of the U.S. constitution. In addition, Albin wrote the ruling leaves public workers, who have been contributing more into the system under the law, "holding the bag."

"The decision unfairly requires public workers to uphold their end of the law's bargain -- increased weekly deductions from their paychecks to fund their future pensions -- while allowing the state to slip from its binding commitment to make commensurate contributions," he wrote.

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Samantha Marcus may be reached at smarcus@njadvancemedia.com . Follow her on Twitter @samanthamarcus. Find NJ.com Politics on Facebook.