N.J. Senate passes health care, pension bill

TRENTON - Undaunted by hundreds of labor leaders protesting outside the Statehouse, eight Democrats in the New Jersey Senate supplied the votes needed to pass a historic bill today that would require public workers to pay more for their health and pension benefits.

The measure passed 24-15 with the support of the entire South Jersey delegation and GOP minority.

Supplying the yes votes were James Beach and Donald Norcross of Camden County; sponsor and Senate President Stephen Sweeney and Fred Madden of Gloucester County; Jeff Van Drew of Cape May County; Jim Whelan of Atlantic County; and Teresa Ruiz of Essex County; and Brian Stack of Hudson County.

A deal was reached last week between Gov. Christie, a Republican, Sweeney, and Assembly Speaker Sheila Oliver (D., Essex) last week to muscle the measure through the Democratic-controlled Legislature, where the majority of their caucus had opposed it.

The South Jersey delegation took a lead role in the legislation, with Sweeney and Sen. Diane Allen (R., Burlington) sponsoring it in the Senate. Assemblyman Louis Greenwald (D., Camden) is sponsoring it in the Assembly, which will vote on the bill Thursday.

Legislators gave long speeches for and against the bill for two hours, with supporters saying it was necessary reform for a broken system and opponents saying that changes to health care should be reserved for the bargaining table.

Sen. Joseph Kyrillos (R., Monmouth), said the bill was about practicality, not about philosophy.

"It's the right thing and it also happens to be our only choice," he said.

Senator Norcross, an electricians' union leader, said his labor credentials are second to none but New Jersey faces an unprecedented crisis.

"The easy thing for me to do is tell people what they want to hear, and that's not what I'm here for," said Norcross.

Senate Majority Leader Barbara Buono (D., Middlesex) spoke out against the measure.

"Everyone knows there has to be compromise on health benefits, but while the governor has criticized others for not being tough enough on collective bargaining, he has made no effort at bargaining and instead results to legislation to circumvent what should have been ongoing negotiations with the state employee unions," she said.

Union contracts for state employees are set to expire shortly, and labor leaders have complained that Christie and the Legislature are not letting the bargaining process for new agreements play out.

Before the vote was taken, Sweeney told his colleagues that he was wrong to consider political calculations when not voting to support same-sex marriage in 2009.

Now, he said, the time for political calculations is over.

"The time for passing the buck to someone else, time for hoping the problem will resolve itself is over," said Sweeney. "Instead, it's time to do the right thing for taxpayers in this state, so let's do the right thing and pass this reform."

Labor leaders this morning gathered outside the capitol building to protest the measure, setting up a supersize inflatable rat, singing about "the mighty, mighty union" and dancing to "We're Not Gonna Take it." They marched across the statehouse campus outside holding waving signs and flags.

At times, their whistles and screams could be heard from the Senate chamber.

Lawmakers made a last-minute change to a controversial provision that would have restricted the ability of government workers to receive treatment out of New Jersey because out-of-state providers would be considered out of network.

The original provision would have not applied to emergency or primary care, and those who already live out of state would not be affected. Employees could go out of state for in-network specialized care when there is no provider reasonably available to them in New Jersey and individual exceptions would be made in unusual circumstances.

The bill also would establish health-plan committees, consisting of employee and employer representatives. They would have to offer a plan that includes out-of-state coverage, though at a higher cost.

But Sweeney and Oliver said this morning that they would repeal that provision and it would be "replaced by language that would direct the new health care boards to create insurance plans that would specifically include only in-state providers, and other plans that would include coverage for out-of-state providers. No employee would be forced to choose the in-state option."

They said in a statement that subscribers to the in-state plan would be allowed to seek out-of-state care on their doctor's certification that no qualified provider exists in-state who can care for the patient's condition. Subscribers to the in-state plan who currently see an out-of-state specialist also would be allowed to continue doing so, and primary and emergency care would continue to be exempted.

But on the Senate floor today, some Democratic legislators argued for the measure's repeal. They said that making an out-of-state plan more expensive would force some workers to choose the cheaper, in-state plan, and that it would limit patient choices.

Senator Loretta Weinberg (D., Bergen) questioned why the bill needed the language, suggesting that the new health boards created by the legislation address the matter.

Allen, a cancer survivor who received treatment at the University of Pennsylvania Hospital in Philadelphia, defended the provision, saying patients would continue to access the care they need out of state.

The bill would increase pension contribution rates for teachers and workers in the Public Employee Retirement System from 5.5 percent to 6.5 percent in the first year. It would phase in an additional 1 percent over seven years. Contributions would increase from 8.5 percent to 10 percent for police and fire employees.

The measure also would raise the retirement age to 65 for public employees hired after the law's effective date, compared to the limit of 60 for those enrolled before November 2008 and 62 for those hired after.

Cost-of-living adjustments would be eliminated until the pension system, currently funded at about 60 percent after governors have skipped billions in contributions, was restored to a healthier level of 80 percent.

The law expires four years after the effective date. It also would preserve the 9 percent pension increase approved in 2001, which Christie wanted to repeal.

By the time the legislation sunsets, "collective bargaining will then be actively engaged once again," said Senator Jennifer Beck (R., Monmouth). "But at this moment in time, the cost of health benefits is so extraordinary and growing so quickly that we have been forced to act."

Senator Paul Sarlo (D., Bergen) protested that the state was doing away with collective bargaining "and not doing anything to address how we deliver a more cost-effective health care system."

Senator Van Drew (D., Cape May) jumped in repeatedly to defend the legislation, saying tough times called for tough choices.

Moreover, he said, the governor has made clear he will not sign separate pieces of legislation for health and pension changes. Many critics of the bill have said they re willing to support the pension provisions but want the health care changes carved out.

"If does not sign the legislation . . . we will be at the point where we won't be able to look people in the eye and tell them they will have a pension," said Van Drew.