TRENTON, N.J. (AP) — The nation's financial downturn left many states in such a precarious position that they were forced this year to make tough decisions on expensive but long-untouchable public employee benefits.

Nowhere was this breakthrough more evident than in union-friendly New Jersey, where a Republican governor aided by Democrats enacted sweeping cost-saving changes that touched pensions and health care simultaneously.

Experts say the overhaul is not only significant in scope, but also marks a pivotal moment as other states look to defuse the ticking time-bomb employee benefit obligations have become as a result of the recession, government benefits becoming more generous than those in the private sector, and poor planning by politicians.

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