Rick Scott, Republican Legislature Vindicated: Florida Supreme Court Upholds Pension Reforms

By: Eric Giunta | Posted: January 17, 2013 2:00 PM
Jorge Labarga

Florida Supreme Court Justice Jorge Labarga

The Florida Supreme Court has upheld the Florida Legislature’s controversial pension reforms of 2011, saying they do not violate public employees’ contract rights, do not constitute an unlawful act of eminent domain, and do not violate employees’ rights to collectively bargain.

The long-anticipated ruling, authored by Charlie Crist-appointee Justice Jorge Labarga, was released Thursday morning. Labarga was joined by Chief Justice Ricky Polston and Justices Barbara Pariente and Charles P. Canady. Justices R. Fred Lewis and James E.C. Perry authored dissents; Perry’s was joined by Justice Peggy Quince.

“We [have] recognized the authority of the Legislature to amend a retirement plan prospectively, so long as any benefits tied to service performed prior to the amendment date are not lost or impaired,’’ Labarga wrote in his opinion.

“I think this ruling shows that what we did was simply the right thing to do,” Mike Haridopolos, who was Senate president at the time the Legislature passed the pension reforms, told Sunshine State News. “It’s very much a reflection of what is already happening in the private sector. We really believed in the philosophy that government benefits should not be superior to those enjoyed by the people in the private sector who actually pay the taxes. I felt it was a good policy and I’m glad to see it was vindicated by the court. It’s a good way to have more long-term predictability in our budgeting process.”

The ruling is expected to save the state some $2 billion.

Legal challenges to the reforms had been brought by public employee unions, who naturally rued the court’s decision.

"This decision is a disappointment for the employees but we respect the Supreme Court’s decision – we are a nation of laws," said Florida Police Benevolent Association President John Rivera. "Although we had a different perspective on addressing the financial challenges Florida faced, our members remain committed to working with the Legislature to resolve these challenging issues.”

“While I am still in the process of reviewing the Supreme Court’s opinion in its entirety, I commend the Supreme Court for their thoughtful and timely review and appreciate their upholding of the Legislature’s proper role in establishing pension policy and making budgetary decisions on behalf of the people who elect us,” Senate President Don Gaetz, R-Niceville, said in a statement. “The changes made to the Florida Retirement System reflect the Legislature’s efforts to maintain a sound retirement system for our hard-working state and local government employees, as well as the reality that Florida taxpayers can no longer bear the full cost of this benefit. Today’s ruling validates the Legislature’s sound policy judgment that public employees in Florida, like the public-sector employees in the vast majority of other states, should play a role in funding their retirement packages.”

Senate Governmental Oversight and Accountability Committee Chairman Jeremy Ring, D-Margate, who supported the contribution when it came before the committee in 2011, said the ruling is probably a relief for those on the Budget Committee.

“I’m pleased with the decision, I’ve always been under the belief that people should pay into their own retirement. I don’t believe it is a tax. Every state in the country does that.

“I’ve never seen a contract in front of me that says the state will hereby never ask you to contribute to your retirement. I’ve been employed in businesses that have changed benefits. It happens every day.”

“On the surface, this appears to be a decisive victory for taxpayers,” House Speaker Will Weatherford, R-Wesley Chapel, said in his own statement. “We are pleased the court has upheld our actions on pension reform.”

Republican Party of Florida Chairman Lenny Curry suggested the ruling constituted a vindication of Scott’s administration.

“Day in and day out, Governor Rick Scott is fighting to keep the cost of living low for Florida families and on fixing our state's underlying economic problems, and it's starting to pay off,” Curry said in a statement. “Thanks to Governor Scott, Florida has become a leading state for job creation in America, Florida's unemployment rate is lower than it has been in many years, [and] Florida's housing market is on the rebound.”

Rep. Alan Williams, D-Tallahassee, the House Democratic whip, said in a written statement, “I am deeply disappointed by today’s court decision that upholds what I consider a pension tax on public employees. The pension tax is harmful to our state and local workers and is another setback in efforts to maintain a quality workforce.

“Public servants are among Florida’s greatest assets. They are the school teachers who educate our children. They are the law enforcement officers who protect us. They are the corrections workers who keep us safe from criminals. They are the Floridians who help build roads and bridges, and they are the ones who play an important role in keeping the economy strong. The pension tax upheld by today’s ruling is bad public policy.”

The Florida Chamber of Commerce, on the other hand, one of the biggest believers in pension reform, cheered the justices' decision to uphold the law.

“While we’re still reviewing the decision, Governor Rick Scott and the Legislature should be commended for their bold ideas to put public employee pension plans in line with those in the private sector and making Florida more competitive,” said David Hart, executive vice president of the Florida Chamber. “Today’s decision could free up as much as $2 billion that can continue going to repairing our transportation and infrastructure, paying great teachers more, economic development and other areas.”

Reach Eric Giunta at egiunta@sunshinestatenews or at (954) 235-9116. 

Comments (15)

12:50AM JAN 21ST 2013
So, now let's not EVER hear the governor or legislators complain that the pension fund is not adequately funded in Florida, particularly if (directly or indirectly) these employee provided funds are used for "repairing our transportation and infrastructure, paying great teachers more, economic development and other areas" . . . . . state pension funds can't be a funding shell game with state workers' futures . . .

We had enough strangeness with pension funding management as the state was gambling first on Enron (as it was failing; Florida lost $335 million) and then on Lehman Brothers (as it began its mortgage-back debt problems) . . . . both companies had significant ties to Bush, the latter the company Bush was working for after he left the governorship, just before the state began buying up those bad debts from Lehman and others by the manager hired under Bush's watch . . .

It's one of several Bush skeletons that makes me wonder whether he'll actually try running in 2016, as the national press will simply reopen those doors and further explore all questionable episodes in Bush's closet . . . .
5:56PM JAN 18TH 2013
State Employees can not opt out of the FRS which they are forced to give 3.5 percent. Private sector gets to choose a retirement system of their choice where is the justice and equality in that?
5:47PM JAN 18TH 2013
I agree it should be in effect for all state employees hired after July 11, 2011 but not to employees who already had contracts with the state. It only proves when a contract is signed by an employee it can be changed so even private sector employees who have benefits you may lose them one day because of political and manager greed.
4:29PM JAN 18TH 2013
Yes and for the last 2 years they have promised that
this money would not be used to balance the budget lol more lies.
Bryan Bouton
11:25AM JAN 18TH 2013
Breaking faith with those who support you...the worst of sins.
Public Employees stood behind this Justice when retention was an issue because it was the right thing to do...and the outcome: same s**t, different day.
Bryan Bouton
11:25AM JAN 18TH 2013
Breaking faith with those who support you...the worst of sins.
Public Employees stood behind this Justice when retention was an issue because it was the right thing to do...and the outcome: same s**t, different day.
David Falstad
1:52PM JAN 18TH 2013
You apparently have no idea of the function of a judge or justice, and his ethical obligation. Judges/justices are to be impartial and fair, basing rulings on the law, not on who does political favors for them. A justice who would use his office to reward a litigant for past favors commits impeachable conduct.
9:22AM JAN 18TH 2013
I'm a public employee and I actually prefer this system. As a tax payer and P.E. I am technically hit twice but I believe it is better this way if this frees up funds that allows improvement within the overall economic infrastructure. My only wish is they would reinstate cost of living increases to keep salaries in line with the rising cost of commodities.
8:22AM JAN 18TH 2013
Interesting how critical the comments can be of the state trying to save the pension system and state budget. Isn't it just the "sharing the wealth" you are all so fond of? Or is that just as long as it doesn't affect you personally? So go ahead and move somewhere else if you don't like Florida, may I suggest CA or IL, both about to go bankrupt because they can't get out from their own pension (read "union") and budget obligations. I'll take FL's low property, sales taxes and no income taxes any day to what they are dishing out there. And yes my husband, our family's sole supporter, is a public employee (teacher) with a pathetic salary who hasn't had a raise in years.
Mike Appleton
2:42AM JAN 18TH 2013
I have not read the decision as yet, so I cannot comment on it substantively. However, it is misleading to characterize the Supreme Court's ruling as a "vindication" of either Gov. Scott or the Florida legislature. The concern of the Court was the legislation's constitutionality, not its wisdom. The intent of the law is simply to reduce the compensation paid to certain public employees. Good pension benefits have been considered an acceptable trade-off for relatively low wages. I have a sister who has taught school for over thirty years in Florida-she has not had a raise in the past five. Employees would logically expect increased pay if their pension benefits are reduced. But that will not happen. Of course, if you are of the opinion that further) starving public education is in the long-term best interests of Floridians, I suppose you will conclude that the governor's policies have been "vindicated."
10:58PM JAN 17TH 2013
The house and senate elected officials - do they pay for health insurance or into their pensions? I remember previously they did not, did something change for them? Are they still on that free ride funded by the taxpayers? Perhaps they should be paying as well. They are earning 6-figure salaries and by not paying into the system themselves, they are contributing to the Florida budget crunch. They play a good game don't they?
10:11PM JAN 17TH 2013
Stupid who voted for Scott there you have it, I only wish that they increase the salary of Vocational Rehabilitation employee support staff 6 years with the same salary no a single salary increase. F..k R.S and all in favor.
7:16PM JAN 17TH 2013
The Florida Supreme Court made the right decision regarding the pension reform. They ruled in accordance with the law. Benefits already promised by law for past work were protected at the earlier contracted rate and only ongoing earnings would be affected. Of course contributing to pension benefits hurts, a little, but the public sector employees who still have their jobs remain a whole lot better off than many of the taxpayers who are being taxed to pay for those benefits.
5:32PM JAN 17TH 2013
Gee thanks for being so gleefully able to cut my check. Less money to spend at area business. You are such a rocking gov! I mean look at you. Taking money out of the paychecks of first responders and teachers while giving your rich buddies tax breaks. How many jobs have you created in the past two years? How many have you cut? Go Scott! Yes, go. Come 2014 you are gone!
4:45PM JAN 17TH 2013
Florida is clearly no place for the average worker, in government or otherwise ... same for every other "right to work" state controlled by Republicans. Working-family Floridians should give serious consideration to moving elsewhere ... someplace friendlier to the working person.

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