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07.19.17

New Jersey State Workers Rally for Lost Pay

Christie has a 'change of heart' after shutting down New Jersey's government

When the New Jersey Legislature failed to pass the final budget of his Governorship, Chris Christie shut down the state just prior to midnight on July 1, 2017 for the second time in the history of the state. Between 30,000 and 35,000 state employees deemed “nonessential” to government operations lost one to three days of work, depending on their work site. Only “essential" operations, such as New Jersey State Police, prisons and the state lottery were kept open.

Governor Christie had stated the week prior to and during the shutdown that workers wouldn’t be receiving back pay if the state were to shut down. A special notice on the Department of Labor and Workforce Development website instructed public workers to file for unemployment insurance benefits even though they do not meet the criteria to receive benefits for one to three days lost pay. Fortunately, NJ legislators do not agree with the Governor and have publicly supported state workers being paid for missing work through no fault of their own.

Thursday, July 13th was the first pay day following the shutdown where workers saw their pay reduced. Labor unions, including IFPTE Local 195, organized and participated in a Pay Day Mobilization, and a press conference was held where Senate President Steve Sweeney and Assembly Speaker Vincent Prieto announced legislation requiring that locked out workers be paid. On the same day, state workers held a lunchtime rally at the State House and delivered a grievance to the Governor’s office. Sweeney called the Senate back in from their summer break to vote on the bill, which passed. Prieto said he will call the Assembly back to vote on retroactive pay sometime this month. Governor Christie apparently had a change of heart since his office released a statement that he would now approve and sign legislation when it reaches his desk to restore pay for workers furloughed because of the impasse over the budget, the details of which is outlined below.


How It All Began…
Budget talks began in February after the Governor presented his budget. Both houses of the legislature, who are controlled by the Democrats, were able to come to an agreement on most items until it came down to the wire and three issues remained on the table. The three issues were 1) school funding, 2) pension funding and 3) Horizon’s Insurance reserves. This led to a battle that pitted the Democrats against the Republican Governor and it also pitted Democrats against Democrats.

By the end of June, Senate President Steve Sweeney and Assembly Speaker Vincent Prieto had finally agreed, after months of squabbling over school funding, to send Christie a state budget that sought an extra $12 million in education aid to schools across the state.

Christie agreed to the Democrats' school plan funding with tweaks, including doubling the amount of new aid for Republican-dominated districts. Christie, who has the power of a line-item veto on the state budget, also agreed to allow Democrats to keep other extra spending in the budget. But….he wanted something in return.

The governor wanted the Legislature to pass two bills. He insisted on a measure to use state lottery funds to beef up New Jersey's ailing pension system. And he wanted a Horizon bill that would give the state more control over the insurer's reserves—something he had been trying to broker for several months.

At the beginning of the year, Christie called on the state's largest health insurance provider, the state-created, non-profit Horizon Blue Cross Blue Shield of New Jersey, to part with some of its reserve funds to help pay for his newly created addiction treatment programs. He wanted to announce a deal with Horizon in his final budget address on February 28, and he hoped the insurance company would give $300 million to fund his new programs. Horizon offered $135 million, with strings attached that would help it recoup the money. There was no deal reached and so if he couldn't negotiate a compromise with Horizon, the governor would legislate one.

And so, the Governor laid it out clearly, stating, “No Horizon bill -- no school funding legislation; No Horizon bill -- no extra money for Democratic priorities.” These weren't idle threats because the Governor knew the Legislature didn't have the votes to override him if he used his line item veto power.

Sweeney conceded right away and presented the bill in the Senate budget committee where it passed before a room full of bill protestors and opponents. Prieto relented on the lottery measure, but not the Horizon legislation. Prieto refused to even put it up for a vote in the Assembly. In interviews, Prieto said “he simply wanted to stop a dangerous bill, one that could cause Horizon to impose rate hikes on its 3.8 million customers if the state tapped too deeply into its reserves.”

This lead to a battle between the two top Democrats in the state, which lead to a new version of the bill that set a cap on how much Horizon could keep in reserve and would not drive up rates. The new version did not give Christie the $300 million he wanted. The full Senate passed the revised Horizon bill but Prieto stood firm and refused to support it. He said he compromised on the lottery bill, but he had to "draw the line" on the Horizon bill.

They each stood their ground as the clock ticked away. Just hours before the deadline, Christie stepped in and met with the two top Democrats but Prieto came away just as resolute as he was going in telling the Governor that he was willing to compromise on the bill but only after the budget passes. He didn’t believe the bill should be tied to the budget.

When the Assembly took the floor shortly thereafter, the budget failed, with 24 Democrats abstaining. Midnight came. No budget. Christie immediately ordered a shutdown of nonessential government functions.

Residents across New Jersey woke up Saturday morning not able to get into state parks and beaches. Vacationers scattered throughout state parks, who had just started the long holiday weekend after setting up campsites, were visited by rangers telling them to “Get Out” while the Governor was pictured with his family lounging on the deserted Island Beach State Park.

Monday, July 3 was the day most people in New Jersey felt the true impact of the shutdown. All state offices and courts were closed and more than 30,000 state workers were furloughed.
Lawmakers continued to meet over the weekend to no avail. It wasn’t until the afternoon of July 3 when Sweeney, Prieto, Horizon CEO Bob Marino, and Senator Joseph Vitale, the sponsor of the Horizon bill, came to an agreement over a new version of the bill after very contentious talks. Christie also agreed to support the new bill which would give the state more control over Horizon by allowing state regulators in 2018 to set a cap on Horizon's reserve fund, and if that amount is exceeded, Horizon would use that money for the benefit of its subscribers. In addition, two more members will be added to the Horizon's 15-person board, giving the Senate and the Assembly one appointment each. The compromise bill also requires Horizon to pay for annual independent audits which will determine the required amount in reserve. And, Horizon will also be required to post online details about its finances, including executive compensation.

More importantly is what the bill will not do. It will not raise premiums for Horizon customers. It will not take away anyone's health insurance. And it will not give any Governor the power to take millions of dollars in reserves to pay for state programs. Prieto and Horizon got what they wanted: a watered-down version of the original bill.

Shortly before 10 p.m., lawmakers were told to return to Trenton for a vote on the new Horizon bill, the lottery measure, and the budget. Both bills and the budget passed the Senate and Assembly after midnight. Christie signed the budget around 2:45 a.m. The shutdown was over in time for the residents of NJ to enjoy their state parks and beaches for the 4th of July.

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