Court hears arguments over 3 percent cut to employee retirement
The Florida Supreme Court is hearing oral arguments this morning in the lawsuit filed by the teachers, police, fire and other government workers challenging a 2011 law that imposed a 3 percent tax on their salaries to offset state investments into the Florida Retirement System. Leon County Circuit Court Judge Jackie Fulford ruled earlier this year that the pension changes were unconstitutional and ordered the state to halt the practice and reimburse workers with interest. Attorney General Pam Bondi and Republican legislative leaders immediately challenged the ruling and now it is up to the court to decide. The lawsuit, Scott v. Williams, was filed by the Florida Education Association, and argues that the change in both the retirement system and the cost of living adjustment beginning in 2011, violated the state constitution. Fulford ruled in FEA’s favor and directed that employees be paid back the money that has been taken from them. Scott and the Legislature appealed the decision, which is now before the Supreme Court for final decision. The central issue in the case is whether the state, or a local government, can modify a public pension plan without winning approval from the affected union. Arguing on behalf of the state is Raoul Cantero, the former Florida Supreme Court justice who is now practicing law in Miami. The state referred to a 1981 case, Florida Sheriff’s Association v. Department of Administration, as the rationale for allowing it to change retirement benefits going forward and argued that if the lower court ruling is allowed to stand it “would handcuff the Legislature’s response to changing financial circumstances.” Fulford ruled that the Legislature violated the state constitution when it required that the public employees belonging to the Florida Retirement System have their salaries reduced three percent to offset the cost of their retirement pay and have their cost of living adjustment reduced for benefit earned after July 1 2011. The savings was then plowed back into the budget, not into the retirement fund, and the court ruled that the changes impaired the contractual rights of the FRS employees, took private property without full compensation and impaired their collective bargaining rights. The central issue in the case is whether the state, or a local government, can modify a public pension plan without winning approval from the affected union. The employee groups say that the changes were made in violation of their constitutional right to collective bargaining. Justice Barbara Pariente noted that if the state agrees that legislators are allowed to eliminate the retirement plan, “that’s not a very good bargaining position.” Cantero replied: “The state constitution doesn’t guarantee success it guarantees the right to collectively bargain.’’
Ronald Meyer, who represents public employees and unions who challenged the measure, countered “the Legislature has the power to make policy affecting subjects of negotiations, but it does not have the power to excuse negotiation altogether.” Lawyers for the FEA, which represents the state’s teachers, argued the reform measure was constitutionally flawed because it changed the pension rules for current employees. The state countered that lawmakers have the constitutional power to cut employees’ pension benefits to deal with budget shortfalls. Florida Circuit Judge Jackie Fulford in Tallahassee ruled in March that the pension law violated the state’s agreements with government employees and ordered contributions returned with interest. The law amounted to an “unconstitutional taking of private property without full compensation and an abridgment of the rights of public employees to collectively bargain over conditions of employment,” Fulford concluded. Meyer argued in court papers that public worker agreements with the state can’t be unilaterally changed by lawmakers under the state’s constitution. “The trial court correctly recognized that there can be no effective bargaining only after the fact where, as here, the legislature has unilaterally predetermined the term or condition through statute, rendering any subsequent negotiations futile,” said Meyer.
“All we’re saying is that the state has to live up to the contract it makes with public employees,” said Ron Meyer, attorney for the state’s largest teachers’ union.
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