TRENTON — In a stunning reversal, Gov. Chris Christie today announced plans to grab, over two years, $2.43 billion meant for public workers' pensions to balance New Jersey's ailing state budget.

The plan threatens to derail one of Christie’s signature accomplishments in Trenton: a major revision to replenish New Jersey’s strained pension fund over the long term.

But it would solve an immediate crisis for the governor, who has to find more than $2 billion somewhere to cover budget shortfalls for the current and incoming fiscal years.

At a Statehouse news conference, the Republican governor said he plans to take $2.43 billion budgeted for the pension fund during this fiscal year and the next one to balance his budgets. He ruled out alternatives such as raising the state income tax or cutting funds for schools and Medicaid.

VIDEO RECAP:

Christie's news conference

A payment to the pension fund scheduled to be made before June 30 will be reduced — from $1.6 billion to $696 million — via executive order, Christie said.

The governor also intends to shrink a $2.25 billion payment that was set for the next fiscal year to $681 million, but said he will seek the Democratic-controlled Legislature’s approval for that move.

The new, lower payments he has proposed will cover the cost of employees currently active in the pension system, the governor said, but will not chip away at the total unfunded liability in the pension fund accrued before he was governor.

"I’m going to pledge to make the payments that we need to make to not dig the hole any deeper, but in a time when we’re confronted with this type of challenge, I cannot also pay the sins of my predecessors," Christie said.

Christie said previous governors and lawmakers slashed several pension payments — or skipped them altogether — over the past 17 years, digging a hole Christie said was too deep to fix. Now that hole, under Christie’s plan, would become the next governor’s burden.

"We’re still digging out of problems two decades in the making," Christie said, conceding that his moves so far to repair the pension fund have not made "much of a dent."

Reducing the pension payments is a high-stakes maneuver that could trigger lawsuits from public worker unions and credit-rating downgrades from Wall Street, but it would solve an immediate concern by plugging what is now estimated as a $1 billion shortfall in the $33 billion state budget. And it gives Christie considerable breathing room for the following fiscal year, which begins July 1.

Democrats and public worker unions lashed out at the governor, saying the state would not be in the throes of crisis had Christie been a better steward of the state budget. They blamed Christie for overestimating his revenue projections by billions of dollars over the last three years, a trend also cited by the three major Wall Street credit-rating agencies this year as they downgraded New Jersey’s debt.

The New Jersey Education Association, the largest public-worker union in the state, said it will seek to block Christie's proposal in court. Under the terms of Christie's 2011 pension overhaul, unions can legally challenge any delays or reductions in the pension payments.

"Governor Christie’s illegal, irresponsible and reckless proposal to further delay a return to sound pension funding practices will irreparably harm New Jersey and cannot be allowed," said NJEA President Wendell Steinhauer. "In addition to the damage this will do to the pension system and to the employees and retirees who rely on it, this will further damage New Jersey’s fiscal reputation, to the detriment of every taxpayer."

Assembly Speaker Vincent Prieto (D-Hudson) said that "abandoning pension payments only make things worse down the road, and that’s unfair to taxpayers who rightly deserve and expect better from someone who vowed to fix the state."

"We will review the governor’s plan and consider the next steps, but are mindful of the need to resolve this crisis," Prieto said in a statement. The speaker had proposed a higher tax rate on New Jersey’s wealthiest earners as a way to bridge the budget shortfall, but Christie ruled that out again today and took a shot at Democrats for promoting "class warfare" against the rich.

Hetty Rosenstein, the state director for the Communications Workers of America union, called on Democratic leaders in the Legislature to fight back and "be the adult in the room."

"It’s time Christie realizes what everyone else knows: cutting taxes for the super-wealthy, while stealing money from pensions hasn’t worked yet. And it won’t work this time," she said in a statement. "At every turn, Governor Christie has chosen the path of economic instability, due to his wrong priorities and callous actions towards New Jersey’s working families."

Senate President Stephen Sweeney (D-Gloucester), who earlier this year threatened to shut down the government if Christie reneged on his pension commitments, did not go that far today.

"This administration has overestimated revenues for years. And while they have asked the middle class and the working poor to suffer, they have rewarded the state’s wealthiest," he said in a statement. "As we have done in the past, Democrats in the Legislature will work to resolve this issue in a manner that is fair to the hard working, middle class people of this state."

The Republican governor devoted much of his first term to a major overhaul of state workers’ health and retirement benefits. The pension system alone, under his plan, would have taken approximately 30 years to get back to financial stability.

The overhaul shifted more costs to public workers, raised their retirement age to 65, and froze yearly cost-of-living adjustments. In exchange, Christie and lawmakers agreed to make bigger payments each year to the pension fund to repair the financial damage after years of governors paying nothing at all.

Now, reducing the payments would increase the financial pressure on the pension system, which already faces $52 billion in unfunded liabilities, and would erase some of the progress Christie and Democratic lawmakers made after they overhauled the pension system in 2011.

"I made the decision that we were not going to blindside our students, we were not going to blindside our seniors," Christie said, noting he was unwilling to make cuts to schools or Medicaid to plug the budget gap.

Asked whether he had any other plans to reform the pension system before he leaves office, Christie said he did, but that he would not be ready to announce those until next month.

State Treasurer Andrew Sidamon-Eristoff is expected to provide details of Christie’s plan Wednesday before the Assembly budget committee.

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