In a Major Victory for State Workers, Judge Rules 3% Contribution Unconstitutional
FlaglerLive | March 6, 2012
In a major victory for 560,000 state workers, including, cops, firefighters, teachers and other school employees in local school districts, Circuit Judge Jackie Fulford this afternoon issued a ruling declaring unconstitutional a requirement that government employees in Florida contribute 3 percent of their earnings to a state retirement fund. The ruling is a defeat for legislative Republicans who enacted the measure last year as part of a plan to balance the budget. The law would have also eliminated cost of living adjustments beginning this year.
The ruling affects some $2 billion that the state used last year to close budget gaps–and that the state would have to reimburse employees. But that’s not the immediate likely outcome: nothing changes in payrolls this year. State employees will continue making the 3 percent contribution, because the case is being appealed to the Florida Supreme Court.
Ron Meyer, the attorney representing the Florida Education Association and other state and local government unions in the lawsuit, had argued that the Legislature illegally abrogated a 1974 law that eliminated employee contributions to the retirement system. That law had established state workers’ pension benefits as a contractual right. So every employee who was hired before the 3 percent law went into effect last July essentially saw the state break his or her contract. Asking employees to contribute some of their income “went to the very heart and structure of the pension plan,” Meyer had said before Fulford in October.
Fulford agreed. The Legislature, she wrote, committed “an unconstitutional impairment of plaintiff’s contract with the State of Florida, an unconstitutional taking of private property without full compensation, and an abridgement of the rights of public employees to collectively bargain over conditions of employment.”
Workers who have been hired since July 1 are not affected by this or subsequent rulings: they’ll have to pay the 3 percent contribution regardless, because they were not hired under the terms of the 1974 law–unless the Legislature changes that portion of the law.
So for now governments have a reprieve, though if the ruling is upheld it will have serious implications among local governments.
“It could be kind of a mess,” County Administrator Craig Coffey said. The 3 percent equates to between $800,000 and $1 million in the county’s payroll, he said (though so far it’s between $600,000 and $700,000). If those amounts had to be covered, there are enough reserves to do so, Coffey said.
Constitutional officers—the sheriff, the property appraiser, the tax collector and the Supervisor of Elections–are all affected by the ruling. So is the city of Bunnell,
Flagler Beach and Palm Coast are not participants in the state pension plan, so they’re not affected either way. Flagler Beach offers its workers a 401-k plan that contributes up to 6.5 percent of gross payroll into each employee’s account, along with a separate defined benefits pension for firefighters and cops, Bruce Campbell, the city manager, said.
For Bunnell, the 3 percent contribution equates to approximately $60,000 annually. “Financially, that is a good sum of money for a small town like Bunnell,” Cissy Bertha, Bunnell’s finance director, said hours before the ruling was handed down. “If Judge Fulford rules that the changes lawmakers made last July to state and local government employee pensions is considered unconstitutional, the City’s reserve will definitely feel the impact of that ruling.”
the state’s teachers celebrated the ruling.
“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,” FEA President Andy Ford said. “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.” He added: “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.”
Legislative Republicans reacted angrily to the ruling. “This ruling is a radical departure from past precedent,” Senate President Mike Haridopolos, R-Merritt Island, told the Sun-Sentinel. He said 46 other states require employees to contribute to their pensions and called Fulford an “activist judge who has no problem overstepping her authority and overruling the decisions of the state’s elected representatives.”
J.D. Alexander, the Senate budget chairman, was equally dismissive of the ruling in comments to the Miami Herald. “How would the legislature violate the law? How can the court direct appropriations, they can’t,” he said. “Neither can the executive branch, neither can a previous legislature. Only this legislature can direct constitutional appropriations. Period. End of story.”