With billions of dollars at stake, the New Jersey Supreme Court today ruled that public-worker unions and associated retirees would not have their cost-of-living adjustments (COLAs) – which have been frozen for approximately five years under a law signed by Chris Christie – restored.
The case was being watched closely, since the outcome has an important effect on how New Jersey manages its finances and budget concerns: more than $80 billion unfunded pension payments play a critical role in these matters.
Today’s 6-1 ruling follows Christie’s decision last year to slash billions of dollars in pension payments.
New Jersey already has a lower credit rating, and Moody’s Investors Service had said additional liabilities stemming from the COLAs probably would have again downgraded the state’s rating.
Todays’ court decision, although against the arguments of labor unions and their employees, prevents a more rapid decline of the state’s $71 billion pension system.Related Articles: