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New Jersey Governor Cuts Spending, Taxes In Budget Plan

TRENTON, N.J. (AP) — New Jersey Gov. Chris Christie held fast to his national reputation for fiscal discipline amid the widespread financial crisis that’s hit U.S. states, unveiling a $29.4 billion state budget Tuesday that calls for heftier contributions from state workers for pension and health care benefits.

Christie proposes paying $500 million into the state’s severely underfunded pension system—the minimum required under a new state law to get the state to quit skipping its payments. But Christie, who’s burnished national credentials as a take-no-prisoners fiscal conservative, says he’ll make the payment only if the Democratic Legislature agrees to reforms that require government workers to delay retirement and pay more.

Union workers, a powerful Democratic constituency in a legislative election year, oppose the plan.

Watch Gov. Christie’s Entire Speech …

Christie’s carrot-and-stick budget plan also targets public workers’ health care. His plan calls for additional property tax credits to poor, disabled and senior households—but only if the Legislature significantly increases public workers’ health insurance contribution.

Christie, who has made enemies with the powerful public teachers union since taking office 14 months ago, wants legislation that would push one-third of the cost of health insurance onto state workers by 2014, up significantly from the 1.5 percent of their salary they pay now. Christie would apply the $323 million in savings to property tax relief for low-income, senior and disabled homeowners.

Unions plan to rally at the Statehouse on Friday in support of public workers in Wisconsin, where protests have erupted over collective bargaining rights and public employees’ benefits are among the issues raising ire.

In a speech last week at the American Enterprise Institute in Washington, Christie urged elected officials to follow his example in addressing spending and debt, and big-ticket items such as pensions and other benefits.

“It’s time to do the big things—the really big things,” Christie said.

In New Jersey, Democratic leaders in the Legislature complained that Christie, through his budget, pits one group of middle-class residents against another.

However, the League of Municipalities, an association of municipal mayors, says it’s pleased Christie’s budget proposal holds the line on spending and aid to towns.

(© Copyright 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • Kevin McGonigal

    I am a retired public school teacher very grateful for the pension the citizens of NJ provide me and sure I am scared that my pension may soon be in the tank. My own union, NJEA, has done little more than bad mouth the governor and has not provided any actuarial facts on how the pension system can be made solvent. The NJEA says little about previous governors raiding the pension fund but a great deal about Christie not doing so. Great press but the reality is that for the system to survive more money has to go into it. How, and be specific, does the NJEA propose to do that? At least Christie is trying to save the pension system in a practical manner. I want NJEA to be as realistic as the governor.

  • Sandi

    We in the private sector have been paying high out-of-pocket amounts for our benefits for a number of years now. It’s tiime for the public sector to start paying, too. We’re all in this recession together,,,

  • Emil Flybatch

    Seems as if last comment deleted.
    Bottom line if you legislate cuts on workers, legislate the same for yourself.
    Tired of state legislatures mandating cuts or Congress and then living off the good of the land. You ” ain’t” no better and you” ain’t” entitled to any more than anyone else.
    Putting on the backs of the people your mismanagement, just like the banks did.
    Get smart, this took years to create, you are not going to fix in one fell swoop. Phase the cuts in relative to seniority, life expectancy. Phase the increase in contributions in the same way.
    SS the same thing. In 1935 life expecantcy 62, one collected at 65. Now it is 77 and we still collect at 65.
    Phase in higher retirement age relative to life expecantcy. Establish new contribution levels for new, younger workers. Oh, and again, Congress goes on the same plan for benefits and retirement.

  • Dan

    A state employee below the poverty level? What a joke! What makes you think you should be able to retire after 20 years? That’s only half a career! Then you want benefits for the rest of your life while you work another job! Something is wrong with this picture.

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