Judge Jackie Fulford Rules State Employee-Pension Contributions Unconstitutional
Around the State
UPDATE: Gov. Rick Scott confident ruling will be overturned.
Leon County Circuit Judge Jackie Fulford has once again ruled against the reform efforts last year of state legislators and Gov. Rick Scott.
Fulford declared Tuesday that the less-than-year-old law to require state employees to contribute 3 percent of their pay toward the pension program is unconstitutional.
A hearing before Fulford is expected for 8 a.m. Wednesday to discuss an appeal by the state.
Gov. Rick Scott released a stern statement Tuesday afternoon expressing disappointment in the judge's ruling.
“As you would expect, I believe this decision is simply wrong.
"The trial judge has ignored 30 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 governor concluded, "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 toward their retirement, leaving working Floridians with100 percent of the tab."
He also said the state will file a swift appeal to reverse this decision. Nonetheless, he said, the court’s order should be stayed throughout the appellate process, which will avoid an immediate impact on the 2012-2013 budget.
Senate President Mike Haridopolos, R-Merritt Island, and House Speaker Dean Cannon, R-Winter Park, already said an appeal is expected.
“I look forward to reviewing Judge Fulford’s order in detail in the coming days. While I respect the authority of the court to offer an opinion in this case, I disagree with Judge Fulford's position," Cannon said in a statement released Tuesday.
“Fiscally responsible adjustments to the Florida Retirement System protect the long-term solvency of the program, ensure that we can avoid massive layoffs and severe cuts to public employee pay and modernize our program, bringing Florida more in line with the private sector and the majority of states that require a modest employee contribution to retirement benefits.
“The ruling of a trial court judge is the first and not the final step. Today’s ruling will have no immediate impact on the passage of the 2012-2013 General Appropriations Act, which the House will take up this Friday in fulfillment of our constitutional responsibility to pass a balanced budget."
Haridopolos on Tuesday went further.
“I am deeply disappointed in Judge Fulford’s decision today," he said in a statement. "She has proven once again that she is an activist judge who has no problem overstepping her authority and overruling the decisions of the state’s elected representatives and the critical role that we play as the budget writers for the state of Florida.
“This ruling is a radical departure from past precedent. Forty-six other states already ask state employees to contribute to their own pensions, and in fact, state employees in Florida, up until the 1970s, also contributed to their pensions. In my opinion, the evidence that this is a constitutional measure is irrefutable. That said, we are currently reviewing her full opinion, and I anticipate that we will take steps to immediately appeal her ruling.”
The Florida Education Association, which filed the lawsuit with a number of public-employee unions, contends legislators violated the state Constitution, which required contract changes to be negotiated through collective bargaining.
Andy Ford of the FEA expects the decision will end up in the state Supreme Court. State employees should expect the 3 percent cut to continue to be collected by the state -- held in escrow -- pending the final outcome of the case.
“This is a win because the governor and the Legislature overstepped their bounds by breaking the contract that the state of Florida had with the public employees,” Ford said.
Ron Meyer, representing the teachers' union, called the decision “momentous.”
“The court said a promise is a promise, a contract is a contract,” Meyer said.
“This is not judicial activism. Judicial activism is when the court ignores the law.”
The ruling does not impact the 3 percent to the pension plan that is designated from employees hired after July 1, 2011, when the law went into place.
Florida Democratic Party Chairman Rod Smith applauded the decision as a ruling against Scott and the “tea party agenda.”
"This decision is yet another blow to Rick Scott's continued assault on the middle class and a victory for Florida's families. In the midst of our economic recovery, Scott's brazen, unconstitutional attempt to cut wages by 3 percent moves our state in the wrong direction and continues to put the burden of solving our state's budget crisis squarely on the backs of working families,” Smith stated in a release.
The state has argued that nobody lost benefits already earned or the right to collectively bargain when it required workers to contribute into the retirement system.
Legislators, seeking to patch a $3.8 billion shortfall in the budget, set contributions at 3 percent for the 700,000 state, county and municipal employees who are covered by the $121.6 billion Florida Retirement System.
Florida TaxWatch President and CEO Dominic Calabro said the pension reform would have made the system more sustainable.
“Florida TaxWatch continues to believe that this reform is in the best interest of all Floridians, and will continue to be a strong advocate for the much-needed reforms that our research has shown to be prudent,” Calabro stated in a release.
The case was heard in October by Fulford, who has previously ruled against the state’s prison privatization plan.
At the time, Fulford said she wasn’t going to overturn prior Florida Supreme Court rulings, which she said allowed legislators to modify contracts. But she disagreed with the precedent being offered by the state attorneys that the courts had allowed legislators to unilaterally change contracts.
Scott had recommended legislators make the employee contribution 5 percent.
Government employees covered by the system have been 100 percent covered by the state since July 1, 1974.
The union also contends that when legislators changed the rules during the 2011 session, their retirement benefits were cut.
During the October hearing, Charlette Moore, a certified public accountant testifying for the teachers' union, said the new retirement package readjusts cost-of-living raises in a manner that cuts long-term benefits.
Moore said the formula used by the state calculates time before and after employees were required to pay 3 percent pension payments starting July 1, 2011.
The change, she said, alters the cost-of-living from a fixed 3 percent to less than 3 percent. For some employees, that could mean thousands of dollars in the long term.
Paul Zeisler, an independent actuary hired by the state, disagreed, saying that when cost-of-living adjustments are calculated with accrued benefits, the long-term retirement payments remain equal.
Reach Jim Turner at email@example.com or at (772) 215-9889.