Last Updated: 12:55 p.m.
The Florida Supreme Court, in a much-anticipated but very divided 4-3 ruling, today sided with the Legislature, and against public employees, by upholding a 2011 law that requires all public employees to contribute 3 percent of their pay to the Florida Retirement System, a pension fund.
In a majority opinion by Justice Labarga, the court ruled that the 2011 law was “facially constitutional,” and that it did not violate the contracts clause, the takings clause or the collective bargaining clause of the Florida Constitution. (See the full decision below.)
Justices Ricky Polston, Barbara Pariente, Charles Canady joined Labarga’s decision. Justices R. Fred Lewis, James E. C. Perry and Peggy Quince dissented.
“In my view,” Perry wrote in a blistering dissent, citing the relevant law, “the challenged provisions of chapter 2011-68, Laws of Florida, amount to an insufferable and unconstitutional ‘bait and switch’ at the expense of public employees who were members of the Florida Retirement System (FRS) prior to July 1, 2011.” Perry criticized the majority for “improperly considering” and misapplying case law it relied on.
The decision is a relief to local governments, particularly school boards, who would have had to find millions of dollars they have already cut or budgeted, based on the 2011 law, essentially making up for the reimbursements the retirement system would have been forced to make to public employees hired before 2011. The Flagler County School Board, for example, would have had to find $3.4 million. “We don’t have the money. The state would have the fund this, because they defunded us that amount,” Tom Tant, Flagler County schools’ finance director, said immediately after the ruling was handed down.
The statewide impact would have been $2 billion. As it is, there will be no budget impact now that the ruling leave matters as they have been since 2011.
“Certainly finance directors of cities that use the FRS as their primary retirement vehicle, it is a relief,” Chris Quinn, Palm Coast’s finance director, said. “It is going to save those entities a significant amount of money, not having to fund that 3 percent.” For Palm Coast, however, the impact would have been minimal either way, because only about a dozen employees of the city are part of the Florida Retirement System.
“Balancing the state budget on the backs of middle-class working families is the wrong approach for legislative leaders and the governor to take,’’ Andy Ford, president of the Florida Education Association, the teachers union that led the court battle, told the Miami Herald. “We’re disappointed that the state’s highest court said this approach was legal.”
In all, the decision affects 623,000 participants of FRS, almost half of whom are teachers. State workers, cops, county employees, college and university employees are also participants.
Today’s decision overturns a ruling by Leon County Circuit Court Judge Jackie Fulford who declared the 2011 law unconstitutional. In a ruling last year, Fulford ruled that the law had broken a contractual covenant with state employees, denied them property without compensation and violated their collective bargaining right, since the law essentially nullified what had been agreed to in collective bargaining.
Four justices disagreed.
“Ultimately,” Pariente wrote in her concurring opinion, “I recognize the frustration of State employees who have in effect experienced a 3% reduction in their net pay as a result of the Legislature’s changes to the retirement plan. Indeed, these changes affect judges and all judicial branch employees as well. However, this case is not a referendum on the Legislature’s policy decision. It is not this Court’s role to express any position on that issue. Instead, as the majority has ably done, it is this Court’s task to carefully analyze and determine whether the Legislature has acted within its constitutional limits. Because Florida Sheriffs and the preservation of rights statute necessitate the conclusion that the Legislature is not constitutionally prohibited from making prospective changes to the mandatory state retirement plan, I believe it is clear that the trial court’s judgment must be reversed.”
[This is a developing story. More soon.]
Florida Supreme Court Decision on 3 Percent Pension Contribution
Florida Supreme Court Decision on 3 Percent Pension Contribution
What a bummer! Time for Scott to go minus 2 years and counting.
kip durocher says
“The moment justice is partisan, truth becomes undermined” some smart person
Governor Glow Scott adheres to the J. P. Morgan theory of law
“I don’t know as I want a lawyer to tell me what I cannot do. I hire him to tell me how to do what I want to do.”
A court of lawyers, eun by a nation by laws the lawyers wrote, for lawyers to undo.,
First of all public employees in Massachusetts pay 11% of their wages toward their retirement. So 3% isn’t asking too much. However, with that said, public employees and public employee unions continue to be the scapegoat for society’s ills. Global warming – its the union’s fault; fatal accidents on I-95 – union’s fault; flu outbreak – fault of the unions. Unions are there to level the playing ground. Think it will be fair if there are no unions – just take a look at WalMart.
@notasenior This argument again…..Massachusetts employees make probably double what the employees make down here. The 3% is not the issue. It’s the 3%, no increases, no cost of living, higher health insurance…..its retarded…but the people making the decisions are making over 120k a years so that’s the problem. I’m sure the fact that they would have had to come up with some money to give back weighted in the decsion too.
First of all, 3% in Massachusetts is the same as 3% in Florida – it is still 3%. No one in the public sector, in any state, is getting raises but are being asked to pay more for health insurance, retirement, etc. Again, public employees and public employee unions are the scapegoats for the ills of the economy. What people forget, or refuse to acknowledge, is that public employees have traditionally taken an increase in benefits and less in pay increases. Now the rcik Scott and Scott walkers of the world want to balance the budget on these hard working people.
…but in MA they are making 2X’s the salary and a much better pension return on retirement.
Brian Lott says
Teachers may have to contribute 11% of their salary towards their retirement in MA; however, that Pension Plan can provide a retirement benefit of up to 80% of their Pre-retirement level of income. For a Teacher in Florida, a Regular Class Member of the FRS, their FRS Pension Plan will only replace 48% of their Average Final Compensation, which will be approximately 45% of their last years salary after 30 years of service. I would gladly contribute 8% percent of my pay for a Pension Benefit that is 35% larger.
any retirement account that says “if you contribut 11% of your salary today you will get 80% of your pay 35 years from now” is a fraud. There is no need to imitate a fraud. Most of the country especially up north has been running these frauds for years but math is taking over. The days fo Florida retirement communities being populated by 55 year old marathon running couple who are scratch golfers is over..most of them were govt employees or teachers anyway!
First of all this concerns me as my hubby works for the school board….when you are trying to survive 3% is ALOT of money. Plus they don’t have an option to pay it or not, you can’t OPT out. That is what makes it UNFAIR
camille norton says
It is so time for Rick Scott to get out of office. If anyone has half a brain he will not be elected again. He has hurt the middle class so bad. He has taken everything he can from us. Is he going to talk a raise away from us to? Something we have not seen in at least 7 yrs. Our income does not match our cost of living in Florida. If you live here everything is so high and our pay is so low. Rick Scott I hope you are not planning on running another term, I would not waist your money.
Bob Z. says
This has nothing to do with what employees of other States have to contribute to their pensions: for those people that were hired prior to the decision to take 3% of their pay as a pension contribution they were told it was a non-contributary fund, and they accepted jobs based on that for a lower salary.
Maybe our next/new Gov. will reverse the ruling…
I don’t think 3% is bad at all. It would seem to me that the employee contributes 3% and the county, city, state or whatever contributes the rest . In other words the employee still gets a higher percentage of “free” money than what he/she actually contributes out of pocket. Still sounds like a good deal.
I guess you have a CHOICE if you want to contribute or NOT to your retirement in your job
Welcome to the real world teachers.
I/M/O many who criticize could not make it in a teacher’s world. The 14 hour days would kill them.
Ed, please see Luis Viera’s column before using the “r” word. It really makes you sound awful which makes me sad because I essentially agree with your argument. This 3 percent is not being kept safe for teachers; it’s being used to balance the budget. FRS was never “in the red” so if it’s not broke don’t fix it.
J MILLER says
They should feel lucky they even have a pension fund they can pay into. 3% is more then fare….everything can’t always be “free”…nothing is “free” If they don’t like having to contribute then go find
a job with better benefits….not likely…the rest of us have to pay in…why shoudlnt they?
Lonewolf and J MILLER,
I would have to say that most public employees salaries not including administrators and higher government officials averages about $40,000 a year before taxes. With the two percent increase in Social Security deductions and the 3% contribution to retirement in the past year, public service employees have seen their pay reduced by at least $2000.00. That is $2000.00 a teacher, fireman, police officer etc., that is not being put back into the local economy. Since that money is not going back into the economy, there are less jobs for the rest of the people in the community, and even more people in the unemployment lines waiting for compensation and aid. Secondly, the pension benefit was not free, the teachers and other public service employees took less pay in exchangefor the contributions into the pension fund.
Finally, teachers do live in the real world. They see it through the eyes of the students they teach everyday. They see students who come to school hungry, or with worn out clothing. They nurture and teach children in an ever more complicated world and if you haven’t been paying attention will put their lives on the line to protect those they teach.
As a firefighter/paramedic/lieutenant, on average we collect a pension for about 8 years before death. I am in charge of a station, 6 personel, 2 units, and your life…. I make just over 14.00$/hr. I depended on that 3% to make ends meet.
To BRUNO TARS It also cost a whole lot more to live in Mass. than it does here, including the fact they have state income tax and we don’t.
@Notasenior. I agree with ED in MA those government employees make not 2 but 3 times plus of what the others make here. Just an example all above the Maxon Dixon Line cost more than here as well specially a beautician you pay in Palm Coast $40 for a hair cut, color and style when in DC will cost $210…Have you ever been up North and when?
This Fl Supreme Court has mostly GOP anti union judges because when people go to vote in Florida don’t have the faintest idea who these Supreme judges are and who is to be retained or not. They just vote for the one with the most likable Anglo last name. I am glad we were able to retain the last two good judges that the GOP wanted to boot in our last election …but they are still out numbered in the Supreme Court. So what you voted for or didn’t is what you got now ruling for the 3% contribution.
Hey you all out there…we need to vote for more than Prez and Vice. Like voting for Senators, Congressmen and Governors men and ladies, if we want all our rights, not only the second to be respected.! We have a chance in 2014 with Rick Scott and many more, lets see what you all do this time.
Get informed before elections day, to prevent laments afterwards.
Like many transplants, my wife and I came to Florida because of the terrible property tax burden ($13K/yr. for what was just a nice home), up north. Now we pay 15% of that. We lived in a nice middle class town that paid its patrolmen with 7 years experience a $91K base salary for 3 days a week 12/hr. shift. Overtime brought that up to over $100K. And with all state and municipal employees enjoying much higher pay than private sector salaries. All while receiving unbelievably excessive benefits and pensions from jobs that could not be fired from. In Florida we live within our means on our own savings, taking nothing from no one, and have zero complaints.
Don’t make the same mistake Florida! Where could you or your children go?
Diego Miller says
Scott got just what he wanted and off the backs of real working people. This same philosophy permeates and reflects what the Flagler County Commission wants also. The Commission busted all it’s Union Employees and kept less qualified and undeserving personnel, they and the County are the real losers. I hope we have a prenup with Mr. Coffey.
Three words…..Breach. Of. Contract. I uphold my end of the contract I signed when I was hired. Why are they not held to the same standard?!
Well for all of you that think we don’t deserve a pension I say the next time you need a cop call a crack head!!!!!!
Career Firefighter says
@ tulip, & J MILER, 3% is not the problem, it’s the fact that many of those affected employee’s took their respective jobs based on a contract with the state of Florida. This was based on a much lower pay scale in exchange for a retirement pension. Rick Scott use’s the excuse that the private sector pays into their retirement so we should too! So you’re saying a contract is not valid? Change because you don’t like something? That’s just outright dirty pool. Private sector makes more money per hour based on position then the public sector. These same employees’s have felt the hard economic times, just as each of us has but at a much lower wage. Some employee’s haven’t been given a raise in 7 years, I ask how’s that fare? But they continue to work, why?? Maybe they love their job! Or need to pay the bills?? So this is fare?? Oh I know your answer “FIND ANOTHER JOB” Get real!!! Dude. Now to read that our school board and other local governments would have had to cut programs or worse maybe lay off or close down places, or make other changes I say shame on them for taking that chance, the smart thing would have been to set aside the additional monies just in case the court ruled against Rick Scott, but they didn’t and got lucky. Will you see a tax decrease this year? Properly not. Public employee’s work hard for their money, a not steal it like Rick Scott did. Today the public sector employee took another blow to an already fragile environment. So I ask you the next time you see a public employee, stop and tell them thank you!!!!!! And mean it!!!!!!
Your job should be filled by a volunteer.
IMO employee contributions usually assure a pension system’s sustainability.
Also IMO when employees make contributions their unions should have equal voting rights as to the use of pension money thus assuring legislators cannot “Borrow” money from the pension systems to fund other government programs.
That is the usual tradeoff for employee contributions. “Legislatures” cannot touch their money.
The citizens finally won a little. Civil employees should never be allowed to organize and be able to hold city, county or state hostage.
Reality Check says
Simple, you do not agree resign your position and look for another, my company was strapped for cash last year and they did not give a COL increase. At this point in the economy a job is more important then any other fact of life right now. The American entitlement attitude has to go, you get what you earn and if you do not earn enough then you must switch careers. I for one am so tired of hearing retired people say “but I am on a fixed income” so am I, I am salary so I get what I get every two weeks. It is not anyone else’s responsibility to provide for you, that is why tax rates are through the roof. The government should provide a percentage of aid to a person, but a complete free ride is out of the question. The real problem is politicians do not worry because there fat pensions and full medical for life clouds their view of what people have to deal with daily. They create these welfare programs and will not change them because that would be political suicide. Until the government gets their spending inline we all going to suffer the ills of out of control spending.
Just a thought says
To all the ones who have no problem with the public employees paying 3% into thier retirement fund, I ask you this: If you signed a contract that was changed by the other party and the other party said “sorry, you have no say in this,” what would you do?
In simple terms: What if you bought a car from GM and recieved the loan from GM that you agreed to and one year later GM said, “Sorry, but you now have to pay 3% more a month for this loan and you don’t get any say in it.” Would you say “well, others are paying more for their loans, I guess it’s OK.” I think not.
@ Just a Thought I was of the impression that this was done because of the bad economy and it was getting extremely difficult to pay 100% of the pension contributions. According to the article, it saved a lot of money for the county, school board etc. When these people retire, they will have a nice pension in place along with SS and savings to live on, so actually they get back more than they put in and I bet you won’t hear them complain.
So they might have to cut down on eating out, some non-essentials, etc. We’ve all done it in the past and it pays off in the end.
These employees are getting a higher amount CONTRIBUTED to their account than what they are paying into it themselves. Try getting that kind of money from a bank account or cd.
Democratic Hustler Politicians + Corrupt Greedy Unions = BANKRUPTCY BABY!
I have never understood why people VOTED OUT Don Fleming over that Hammock Card and yet VOTED IN Scott who committed fraud and robbed Medicare of millions of dollars. We have been paying for it ever since he became governor.
I did not make the above statement to start a discussion about the former sheriff or who won or lost that race, I just wanted to point out the odd ways people vote.
In regards to Scott wanting to change back the voting rules, If I had may way I would not do it. I would leave the status quo as it is (thanks to him) and make him go through the same misery the candidates and voters in the recent election had to go through. What gives Scott the right to change the voting rules to suit him? Unfortunately, he will probably get his way. Hopefully, people will remember at the polls.