PHOTOS: Chris Christie delivers his 2014-2015 Fiscal Budget - 2-25-2014

Gov. Chris Christie delivers his state budget address last year.

(Tony Kurdzuk | NJ Advance Media for NJ.com)

TRENTON — In a significant blow to Gov. Chris Christie, a state judge ruled today that the governor broke a law he signed by cutting $1.57 billion from a promised payment from the pension system for public employees this year, and must now work with state lawmakers to restore the money.

The fraught ruling comes as Christie, a potential 2016 presidential hopeful, prepares to deliver his sixth budget proposal Tuesday afternoon for the fiscal year that begins July 1.

The decision could blow a massive hole in the current state budget, sending the Republican governor and the Democratic-controlled state Legislature scrambling to come up with the funds by June 30, when this fiscal year ends.

State Assembly Majority Leader Lou Greenwald said today he doesn't know where they would find they money in this year's $32.5 billion budget and warned it would take "draconian" cuts to accomplish.

"The impact on programs at the end of the year would be devastating," Greenwald (D-Camden) said.

Superior Court Judge Mary Jacobson sided with a group of public worker unions that sued to stop Christie from slashing the required payment to New Jersey's retirement fund for hundreds of thousands of government workers. The governor made the cut to fill a gaping hole in the budget after his administration's revenue projections fell far short, saying he had no other choice.

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The unions — which include teachers, police officers, state troopers, firefighters, and office workers — argued that Christie promised to make the full payment under a 2011 law he signed to put the pension system back on solid financial ground. Under that overhaul, the state promised to make increased annual payments to the fund after years of governors short-changing it, and in exchange workers have paid more for their pension and health benefits.

Christie touted the law — which he worked on with Democratic lawmakers — as a bipartisan achievement, and the move brought him national attention as a governor who could work with both sides of the aisle.

Jacobson ruled today that the governor's cuts "substantially impaired" the contractual right to payments that were guaranteed to employees as part of the deal.

"The court is unwilling to rely on what has now become a succession of empty promises," Jacobson wrote in the 130-page decision.

"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," she added.

Christie's office said it will appeal the decision.

"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," spokesman Michael Drewniak said in a statement today.

"This budget was passed by the Legislature and signed by the governor with a pension payment. The governor will continue to work on a practical solution to New Jersey's pension and health benefits problems while he appeals this decision to a higher court where we are confident the judgment of New Jersey's elected officials will be vindicated."

Union leaders applauded the ruling.

"It gives me hope that people who worked all their lives providing services to the public — that's how they made their living — that they will be able to retire, and they will get their pensions," said Hetty Rosenstein, director of the New Jersey chapter of the Communication Workers of America.

Charles Wowkanech, president of the state chapter of the AFL-CIO, said the union was "elated."

"By refusing to make the required payments, the governor has exacerbated the chronic underfunding of the entire retirement system to the point of crisis," Wowkanech said in a statement.

Christie actually cut two years of pension payments to balance the budget, and the unions' lawsuits aimed to reverse both of them. But last June, days before the previous fiscal year was set to end, Jacobson ruled that Christie could cut that year's payment from $1.58 billion to $696 million because the revenue shortfall had created a fiscal emergency.

In January, attorneys for the state argued that Christie could not be forced to make a full pension payment this year because the 2011 law was unconstitutional.

Jacobson said today that Christie's position is "unusual" because it claims the "legislative contractual guarantee, which embodied significant reforms for which he took substantial credit with great national fanfare, violates the New Jersey constitution."

The judge also ruled that the state must reimburse the unions for legal costs.

New Jersey's pension system faces $83 billion in unfunded liabilities — one of the highest in the nation. It's estimated that Christie's two-year, $2.4 billion cut would cost the state twice as much over the next five years.

Christie has repeatedly said that the 2011 reforms didn't go far enough and another overhaul is needed. He formed a special commission to suggest ways to fix the problem.

How Christie will tackle the issue is one of the top questions heading into his budget address Tuesday.

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NJ Advance Media staff writers Christopher Baxter, Matt Friedman, and Samantha Marcus contributed to this report.

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Brent Johnson may be reached at bjohnson@njadvancemedia.com. Follow him on Twitter @johnsb01. Find NJ.com Politics on Facebook.