N.J. workers approve pact trading raises for higher benefit payments

Posted: April 13, 2007

New Jersey state employees turned out in record numbers and ratified a new four-year contract yesterday that trades raises for increased benefit payments.

The contract, affecting most unionized state workers, came after a divisive and sometimes personal civil war among union leaders that cast a harsh light on Gov. Corzine's former romance with union leader Carla Katz.

Katz, president of Communications Workers of America Local 1034, and Local 1033 president Rae Roeder ran an aggressive "Vote No" campaign, with letters, newspaper and radio ads, telling union members that the tentative agreement gave too much back to the state.

Last night, though, Katz accepted defeat and said: "We think we fought a good fight. The members have the final say, and the members spoke."

She said she was on to her next battle: ensuring full funding of the state workers' pension fund and retiree health funds, which now have $102.8 billion in unfunded liabilities.

The victorious supporters of the new contract - representing about 60 percent of the union's 29,000 members eligible to vote - also said they would fight to fund the pension.

CWA spokesman Robert Master called the contract a "tremendous agreement" and said that bargaining had taken place earlier this year under extraordinary pressure. "For the last 18 months, we've been in the eye of a storm," he said.

Taxpayers are in a revolt over paying the highest taxes in the nation, and legislators have been calling for severe employee-benefit cuts.

The governor's office did not respond to calls for comment last night. Corzine was in a car accident on the Garden State Parkway near Atlantic City, but a spokesman told the Associated Press that his injuries were not life-threatening.

The new contract gives state workers annual raises of up to 3.5 percent per year. For the first time, they will pay 1.5 percent of their salaries toward health-insurance premiums. The contract also increases their pension contributions from 5 percent to 5.5 percent of their salaries.

Getting to yesterday's vote was a tortuous journey for the CWA.

To fight the Katz-Roeder Vote No campaign, five other CWA local presidents recruited their international union president, Lawrence Cohen. He told workers that the contract represented the best deal they could get.

Master said that "old-fashioned shoe leather" also contributed to the victory. The union contacted members on the phone, through the mail, and in person, walking from desk to desk throughout the sprawling state bureaucracy pitching the contract.

As controversy grew, the five local presidents blasted Katz and Roeder, saying the pair had agreed in union caucuses to some of the very elements of the contract they were criticizing. Katz and Roeder, however, argued that agreeing to a tentative deal in February was too early and that they could have gotten a better one - especially after Corzine agreed to give teachers free lifetime health care.

The five CWA presidents supporting ratification also contended that Katz opposed the deal to make it look like she wasn't caving in to her ex-boyfriend, the governor. Katz's supporters came to her defense and said that the other union presidents' actions were "shameful," "unwarranted" and "reprehensible."

The controversy became even more volatile after reports earlier this year that Katz purchased a $1.1 million condo in the same Hoboken building where Corzine lives during contract negotiations. Campaigning for governor in 2005, Corzine came under fire for forgiving a $470,000 mortgage on Katz's Hunterdon County home. Both have said that their personal relationship is over and that it poses no conflict of interest. Katz has declined comment on her purchase of the Hoboken condominium.

Still, the Republican State Committee called for an ethics investigation of Corzine. The governor has consistently refused to discuss his private life, but earlier this month asked his hand-picked ethics advisers whether there was a conflict of interest. That examination is continuing.

Ballots were counted by the American Arbitration Association at the Park Hyatt Philadelphia at the Bellevue.

The CWA contract, which affects the largest group of the state's 80,000 workers and was hammered out in late February, is considered by many to be the trendsetter. On Wednesday night, the American Federation of State County and Municipal Employees, representing about 8,000 state employees, reached a tentative agreement that mirrors the CWA contract. Counties, towns and school boards are expected to model their deals after the state contracts.

Both contracts raise the retirement age from 55 to 60 and cap the maximum pension a worker can receive at $97,200.

Corzine's office said that both contracts, as well as pending legislation, could save the state $475 million a year by 2022.

The health-care givebacks could save $90 million a year starting in July, according to the governor's office.

With about 19,000 mail ballots cast, state workers voted in unprecedented numbers. Typical votes have been about 30 percent of the eligible 29,000 members - even on controversial deals. The previous contract, settled in 2003, had a 30 percent voter turnout and also was accepted 3-2.

While Master declined to discuss plans for healing the rift, Katz said she thought that it would "take a lot of effort on everyone's part. If we focus on what members need and want, we will be able to come together as a union."

Contact staff writer Cynthia Burton at 856-779-3858 or cburton@phillynews.com.

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