New Jersey cannot afford to pay anywhere near the pension benefits promised to public employees so in 2011 the governor with the consent of the legislature decided to arbitrarily eliminate cost-of-living-adjustments for all retirees. They did this through legislation which today got the approval of the New Jersey Supreme Court (6 – 1). The six in their opinion felt:
The main justification for this position comes on page 19:
In Spina, the Court was confronted with an ailing local public pension fund and a legislative response thereto that increased both the length-of-service requirement and the minimum retirement age. Id. at 393. The question for this Court became “whether the Legislature is free to rewrite the formula for the good of all who have contributed.” Id. at 402.
The Court acknowledged that the Legislature could, if it wished, impose contractual obligations on itself. Id. at 405. But to do so, the Court required a high bar for the creation of contracts by statute because contractual language in a statute cuts off the legislative prerogative to revisit its policy choices. Id. at 404-05. Writing for the Court, Chief Justice Weintraub explained that a contractual restriction on future legislative action “should be so plainly expressed that one cannot doubt the individual legislator understood and intended it.” Id. at 405 (emphasis added). That standard has remained the benchmark in this state for determining whether a contract has been created by statute.
The rest of the opinion proceeds from this germ and concludes that there is indeed doubt that each “individual legislator understood and intended” the creation of a contractual right to COLAs.
Does this then mean that no legislation can be enacted and upheld unless it can be proven in court that each individual legislator understood what they voted on? If so, then we are truly a lawless society.