Sweeney's pension plan is a giveaway to unions | Editorial

Senate President Steve Sweeney just proposed a Constitutional amendment that would give public workers unions all they want on pensions, and ask nothing in return.

It is a surprising and disappointing turn for Sweeney, a centrist Democrat who has been a hero on this issue up until now. He was the first major political figure to focus Trenton's attention on this crisis back in 2006, and he risked his political neck by embracing tough reforms in a bipartisan deal with Gov. Chris Christie in 2011. Since then, he has pushed smart health care reforms that should save about $300 million a year more.

With this proposal, Sweeney has abandoned that sensible middle ground. As he prepares for a likely campaign for governor, he is now siding resolutely with the public workers. He holds open the possibility of future cuts in benefits, but says they have sacrificed enough for now.

"They're making less money than they did seven years ago, and now we're going to put them even further back?" he asks.

Why should the average New Jersey resident care about this? Because we face enormous increases in health and pension costs over the next several years. Without a second round of cuts in benefits, that will force big tax increases and meaty spending cuts in core areas like education.

Sweeney is right about public workers. They are not the villains. The reason pension costs are rising so fast is that the state, under governors of both parties, has consistently failed to make payments into the funds. So we are playing catch-up now.

The union took a hard blow in 2011. The reform forced them to contribute more to both pensions and health care, while cutting benefits. Pay freezes and small salary increases have left many with less take-home pay, as Sweeney notes.

But public workers continue to receive health benefits that are far more generous than those enjoyed by the typical taxpayers. The cost is about 50 percent more than the average plan in the private sector, according to Tom Byrne, a former Democratic state chairman and member of the governor's bipartisan reform commission.

The problem with Sweeney's amendment is that he answers the key demand of the unions - to fully fund the pensions - without asking for cuts in health spending in return.

That's a missed opportunity. Sweeney's staff estimates that the amendment would eventually force the state to invest nearly $4 billion a year more on pensions than it does today. For perspective, the annual budget this year is $34 billion.

How will the state cover that cost? Sweeney believes it can be done by devoting most of the new revenue generated by a growing economy to this cause, and by adding revenue from a millionaire's tax, which would yield just under $700 million annually.

But what if he's wrong? What if that's not enough? And why should New Jersey devote so much of its budget to this cause without seeking health cuts in return?

Without doubt, New Jersey needs to stop shorting its pension funds. The Supreme Court has ruled that workers are entitled to their promised benefits, but that the state is under no obligation to set aside money for that cause. In other words, we are legally entitled to be completely irresponsible.

It is the governor's job to find consensus and get a deal done on this, as he did in 2011. But he's gone now, paying no attention to New Jersey except to occasionally insult Democrats and the unions. Count this as another cost of his presidential campaign.

Sweeney is trying to fill that vacuum. But his plan is flawed. And by giving the unions all they want, and asking nothing in return, he is surrendering the taxpayer's best bargaining chip for free.

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