Rejection of Christie's pension cuts reversed

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The New Jersey State Supreme Court on Tuesday reversed a lower court's rejection of Gov. Chris Christie's pension cuts, meaning he will not have to put more money into the state's pension fund. (Tweet This)

"The Debt Limitation Clause of the State Constitution interdicts the creation, in this manner, of a legally binding enforceable contract compelling multi-year financial payments in the sizable amounts called for by the statute," the court said, adding that the loss of public trust due to the ordeal is "staggering."

"The Court recognizes that the present level of the pension systems' funding is of increasing concern. But this is a constitutional controversy that has been brought to the Judiciary's doorstep, and the Court's obligation is to enforce the State Constitution's limitations on legislative power," it also said.

New Jersey Gov. Chris Christie
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Last year, Christie slashed $1.6 billion from the state's fiscal 2015 public pension contribution.

Christie argued that the state cannot afford it, that the law does not demand the full payment and that the court should not wade into budget decisions.

Unions for workers say that Christie is bound by the law he signed and note that workers are paying more for their retirement benefits.

The cuts prompted lawsuits by public sector unions and retirees, who won in lower court when a state judge decided that 2011 pension reforms created a contractual right obliging the state to pay its fair share into the retirement system.

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The ruling could bolster both Christie's presidential aspirations and the state's tight budget. The state's pension system has about $83 billion of unfunded liabilities and was funded at only about 44 percent in fiscal 2014.

—Reuters and the AP contributed to this report.