JUDGE STRIKES DOWN PENSION OVERHAUL
By BRANDON LARRABEE
THE NEWS SERVICE OF FLORIDA
THE CAPITAL, TALLAHASSEE, March 6, 2012......In a stinging rebuke to Gov. Rick Scott and legislative Republicans, a state judge struck down a key portion of last year's pension overhaul, a decision that could eventually force the state to return hundreds of millions of dollars to its employees.
The ruling from Circuit Court Judge Jackie Fulford bars the state from requiring employees hired before July 1, 2011, to contribute 3 percent of their income to their retirement plans. It also struck down a portion of the law that would reduce the cost-of-living increase for those employees.
Gov. Rick Scott said the state would appeal the decision, likely resulting in a stay that would allow the law to remain in place for now. Opponents of the law said they expect the state to continue withholding the 3 percent until the Florida Supreme Court rules on the issue.
The provisions struck down by Fulford's decision were expected to save the state $861 million a year -- money that would eventually have to be paid back if the appeal fails. It would cost counties around $600 million a year to have the changes reversed, likely leading to service cuts at the local level.
Scott and the lawmakers who pushed the provisions in last year's session said the changes were needed to bring public workers' pension plans in line with the private sector and help patch a multibillion-dollar hole in the state budget. But Fulford said that was not a good enough reason to ignore a law that essentially casts the pension plan as a contract between the state and its workers.
"The Court cannot set aside its constitutional obligations because a budget crisis exists in the State of Florida," Fulford wrote. She added that ruling for the state "would mean that a contract with our state government has no meaning, and that the citizens of our state can place no trust in the work of our Legislature."
Employees and unions who had taken the fight to court were elated by the ruling and said Scott and lawmakers should move quickly to reimburse state workers.
"They gambled taxpayers' money that they could balance the budget on the backs of the hard-working public employees of this state," said attorney Ron Meyer, who represented the plaintiffs in the case. "They lost that bet today."
Instead, state Republicans and their allies seemed to dig in -- painting Fulford, who has ruled against them before, as an activist judge and vowing to push ahead with an appeal.
Scott told reporters that Fulford's ruling "doesn't make any sense to me" and said she had overstepped her bounds.
"This is writing the laws of the land," Scott said. "That is wrong. And I'm very comfortable this will be held to be constitutional."
House Speaker Dean Cannon, R-Winter Park, said lawmakers wouldn't immediately try to find the funds to reimburse employees.
"A first opinion by a single trial court judge is a long, long way from final," Cannon said. He said the decision "validates the wisdom of always having a billion dollars in reserve," a House budget policy in recent years.
Senate President Mike Haridopolos, R-Merritt Island, also said the Legislature would not re-open the budget, which is already printed and ready for a final vote Friday.
"I do not expect to open the budget, I expect to win the court case," he said.
But Fulford's ruling still touched off a round of speculation about how lawmakers could find the money if it came to that. Groups who have pushed for the state to consider closing tax loopholes or otherwise finding new revenues renewed their calls, which have run into resistance among Republicans who find tax increases unpalatable.
Meyer said that the state should tap its reserves to repay employees. But supporters of the law were already suggesting ideas that would hit the same workers who sued the state.
"While investing in our economy and our teachers is a priority of many, it would be ironic if the union lawsuit that brought forward this activist judge's ruling actually reduced the salaries of government workers and the union members they represent by three percent," Florida Chamber of Commerce President and CEO Mark Wilson said in a statement issued Tuesday.
Meyer acknowledged that possibility.
"If the Legislature and the governor want to punish workers, I'm sure they'll find ways of doing it," he said. "But they're not going to do it by imposing this tax upon their salaries."
AFSCME Council 79 President Jeanette Wynn Statement on State Circuit Court Ruling on Florida Retirement System
TALLAHASSEE, FL -- March 6, 2012 --
Today, AFSCME Council 79 President Jeanette Wynn released the following statement after the Leon County Circuit Court ruled the Florida Legislature’s effort to cut state and local government worker salaries by three percent as “unconstitutional:”
“I applaud Judge Fulford’s decision to uphold the law and stand against the state legislature’s unfair attack on workers’ rights,” said AFSCME Council 79 President Jeanette Wynn. “Rick Scott and his supporters at the Florida legislature need to focus on job creation, instead of attempting to close the gaping budget hole on the backs of hard working middle class families. Thanks to today’s court decision, these workers can continue to make ends meet and retire with dignity.”
A copy of the Court ruling is attached.
State Representative Alan Williams Statement on the Pension Ruling
TALLAHASSEE, FL – State Representative Alan Williams (D-Tallahassee) issued the following statement today about the pension ruling by Circuit Judge Jackie Fulford:
“I agree with the decision by Judge Fulford on the forced 3 percent contribution of employees salaries found unconstitutional," said Rep. Williams. “The pension system was a contractual relationship employees made with the State regarding the public retirement system and the retirement benefits were a valuable part of the consideration offered by employers upon which our workers relied when accepting employment.”
“This ultimate pay cut has been a severe blow to our state workers who have not had a raise in six years. Our local and statewide economy is experiencing profound cuts in public schools, colleges and universities, public health, and public safety, etc. The legislature should refund these funds to our state workers, teachers, police officers, firemen, the safeguards of our community immediately. As President Obama states, we’re not going to attract the best teachers for our kids...if they only make a fraction of what other professionals make. We’re not going to convince the bravest Americans to put their lives on the line as police officers or firefighters if we don’t properly reward that bravery. We cannot continue to force the public sector, the most vital part of our economy and the lifeblood of this state, to shoulder alone the burden of a poor economy. As Lawton Chiles once said, this time the people won."
Statement from Governor Scott on Pension Ruling
Governor's Press Office -- March 6, 2012 --
Tallahassee, Fla. – “As you would expect, I believe this decision is simply wrong. The trial judge has ignored thirty years of Supreme Court precedent in a decision that refuses to allow Florida to have common-sense pension reform. This is another example of a court substituting its own policy preferences for those of the Legislature. The Court’s decision nullifies the will of the people and leaves Florida as one of the only states in the country in which public employees contribute nothing towards their retirement, leaving working Floridians with100 percent of the tab. The State plans to file a swift appeal to reverse this decision. Nonetheless, the Court’s order should be stayed throughout the appellate process, which will avoid an immediate impact on the 2012-2013 budget.
TALLAHASSEE – March 6, 2012 -
A judge has struck down a new law requiring Florida's public employees to contribute 3 percent of their pay to their pension plans.
Circuit Judge Jackie Fulford announced her ruling Tuesday in Tallahassee. An appeal is expected.
An ultimate decision against the requirement would blow about a $2 billion hole in state budgets for the current and next fiscal years.
The Legislature passed the law last year as a cost-cutting measure because it allowed the state and local governments to reduce their contributions to the pension plan.
It affects all state and county employees, teachers and some city workers.
Public employee unions challenged the law.
Gov. Rick Scott sought the contribution requirement, arguing private sector workers and public employees in most other states contribute to their retirement plans.
Circuit Court Judge Jackie Fulford ruled today in favor of the Florida Education Association in its lawsuit on public employees’ mandatory pension “contribution” and reminded Gov. Rick Scott and the extremists in charge of the Legislature that a promise is a promise.
Last year, the Florida Education Association filed a lawsuit seeking to stop the 3 percent tax on teachers, school employees and other workers imposed by the Florida Legislature and signed by Scott.
FEA President Andy Ford hailed the decision as a significant victory for public employees, but as importantly, for the rule of law in our society.
“The judge’s ruling confirms that the Florida Constitution requires the state to live up to its promises, including those made to the public workers by the state itself,” Ford said.
Florida law has provided for nearly four decades that pension rights are contractual rights that may not be ignored or abridged. If the Legislature determines that changes to the pension system are desirable, it must do so prospectively for employees who come to work after a change in the law. Employees should not dedicate their livelihoods to public service with a contractual expectation of retirement benefits only to have that expectation wrongly taken from them.
Ron Meyer, the lead attorney in bringing the challenge, argued to the court that there were three separate constitutional provisions that prohibit the state from taking away employees’ right to a non-contributory retirement system containing a cost-of-living provision. The court found that stripping workers of the contractually provided benefits constitutes an unlawful impairment of the obligations of contract, an action which is prohibited by the Constitution.
“We are pleased by today’s decision. It once again will stop the Florida Legislature from overstepping its authority by ignoring the state’s constitution,” Ford said. “We urge the governor and leaders in the Legislature to embrace this decision and abide by the judge’s ruling. If they decide to prolong this case with an appeal, FEA is prepared to continue fighting for the rights of middle-class families who make our state a better place.”
Last year, legislators made the choice to balance the budget on the backs of teachers, law-enforcement officers, firefighters, nurses and other public service workers so they could give corporations yet another round of tax giveaways.
Now the governor and legislative leaders need to “get to work” and address the budget shortfall the right way: by closing tax loopholes and repealing some of the multibillion dollar tax giveaways for corporations and billionaires that they have passed over the last decade.