By Edith Honan
TRENTON, New Jersey (Reuters) - New Jersey's Democrat-controlled Senate on Monday approved changes to the state's pension and benefits system for public workers in what Republican Governor Chris Christie called a "watershed moment" of bipartisan cooperation.
Forcing teachers, police and other public workers to pay more toward future benefits and reduce the state's burden by potentially billions of dollars has been a top priority for Christie since he took office in 2010.
Christie reached a deal this month with New Jersey's two top Democrats, Senate President Steve Sweeney and Assembly Speaker Sheila Oliver, that would require the state's 500,000 public employees to pay more toward their benefits.
It also would raise the retirement age for new employees and eliminate cost of living adjustments for workers who have already entered retirement.
"As a result of Democrats and Republicans coming together to confront the tough issues, we are providing a sustainable future for our pension and health benefit system, saving New Jersey taxpayers hundreds of billions of dollars and securing a fiscally responsible future for the state," Christie said in a statement after the Senate vote.
The Assembly, which is holding hearings on the bill on Monday, is expected to vote on the measure on Thursday.
Pension costs are ballooning in states across the country, and promised payments have not been funded. New Jersey -- which has repeatedly skipped payments to its pension fund, including under Christie -- has one of the largest unfunded pension liabilities of any state.
Despite union demonstrations in Trenton, the scene in New Jersey stood in stark contrast to pro-union protests that all but shut down the Wisconsin state capital of Madison in February, when thousands of demonstrators took to the streets to protest a plan to curb collective bargaining rights.
In Wisconsin, the Democratic minority fled the state, holding up a vote on the measure for weeks.
"We have Democrats acting like Republicans. Why do we have two parties?" said Dominick Marino, president of the state's Professional Firefighters Association. "The Democratic philosophy is to help the working people of New Jersey."
Outside the statehouse, union demonstrators said public sector workers have been made scapegoats for the state's larger fiscal problems, and chided Christie for rejecting a tax increase for the state's highest earners.
"I woke up one day and suddenly realized that everything going wrong in this state is all my fault," said Louann Linepensel, 57, who teaches at a New Jersey prison.
"What (Christie) has done is segmented a part of the population as the enemy. He's vilifying the public workers as basically bankrupting New Jersey," she said.
One especially contentious issue is a proposed rule that would limit state workers' access to out-of-state medical care.
For example, employees would only be able to seek in-network care with a specialist in another state when it is deemed "medically necessary," or "there is no provider reasonably available to them in New Jersey or close to their home," according to the senate leadership.
(Reporting by Edith Honan; Editing by Andrew Hay)