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Update: Court rules 4-3 in favor of state, tells workers they lose 3 percent in retirement battle

In a major victory for the state, the Florida Supreme Court ruled 4-3 against state workers and allowed the state to retain the 3 percent levy on worker salaries to offset the state's investment into the Florida Retirement SystemDownload Retirement ruling

The ruling allows lawmakers to avoid another $2 billion budget hole in the 2013-14 fiscal year while all state workers will see their salary cuts retained indefinitely and will continue to see no cost of living increases adjustments made to their retirement accounts. 

The lawsuit, Scott v. Williams, was filed by the Florida Education Association after lawmakers passed, and Gov. Rick Scott signed, a law in 2011 to tap salaries of 623,000 teachers, law enforcement officers, firefighters, nurse and other public employees and put the money into the retirement system.

In the decision written by Justice Jorge Labarga, the court cited a 1981 ruling in Florida Sheriff’s and said the unions and trial court were incorrect in concluding that the decision was not intended to allow changes in retirement contribution plans for both current and future employees.

“We 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,’’ the ruling said, noting that the court “took special care in Florida Sheriffs” not to bind future legislatures. 

Justices R. Fred Lewis, Peggy Quince and James E.C. Perry disagreed with the ruling and Lewis and Perry wrote separate dissenting opinions. Justice Barbara Pariente wrote a concurring opinion explaining that the decision should not be viewed as a judgment on the policy but instead whether it was constitutional, which she conceded it was. 

"Ultimately, I recognize the frustrate of state employees who have in effect experienced a 3 percent 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,'' she said. "However, this case is not a referendum on the Legislature’s policy decision."

Union officials were disappointed with the ruling.

 “Balancing the state budget on the backs of middle-class working families is the wrong approach for legislative leaders and the governor to take,’’ said Andy Ford, president of the FEA, who said he would use the decision to encourage Floridians to replace the governor and the Republican-led leadership in 2014.

"The 2014 campaign begins today,'' he said. "We’re going to have a focus on changing the politicians in Tallahassee who don’t care about working Floridians."

Matt Puckett of the Florida Police Benevolent Association said that while members “obviously are disappointed” they hope to keep any future reforms to the pension system “to a minimum.’’

“We’re a nation of laws. We respect the decision of the court. It seems well reasoned. We’ll deal with it,’’ he said. 

Senate President Don Gaetz commended the ruling and said the changes were necessary "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."

The governor predicted the ruling will lure more employers to Florida.

“The court’s ruling today supports our efforts to lower the cost of living for Florida families,'' Scott said in a statement. "This means even more businesses will locate and grow in our state, which creates even more opportunities for Floridians to live their version of the American dream.”

Lawmakers argued at the time that the change was needed to fill a $3.6 billion budget gap and bring Florida in line with 47 states that require their government workers to contribute to their pension plans. The savings was then plowed back into the budget, not into the retirement fund.

The ruling overturns a decision by Leon County Circuit Court Judge Jackie Fulford, who ruled in 2012 that the pension changes were unconstitutional because they impaired the contractual rights of the FRS employees, took private property without full compensation and impaired employee collective bargaining rights. She 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 continued collecting money from employee payments. 

If the seven justices had upheld the lower court ruling, state and local governments would have to reimburse active workers in the Florida Retirement System and cover the resulting hole in their budgets.

House budget chief, Rep. Seth McKeel, R-Lakeland, said if current conditions hold, the ruling provides lawmakers with needed certainty this budget year and "Florida will be able to have a more normal budget."

The state has withdrawn more than $900 million from employees salaries since the law took effect July 1, 2011, and are expected to take up to $2 billion by June 30, 2013, the end of the state’s current fiscal year. State economists have predicted that revenues appear to be meeting expectations and, for the first time in years, legislators may not face another year of belt tightening. 

Union leaders said they hope the improved fiscal conditions will allow lawmakers to grant state employees pay raises for the first time in six years, to offset some of the cost of the cut to their pay from the retirement change.

Senate budget chief, Sen. Joe Negron, R-Palm City, said the issues aren't linked. "We're well aware that state workers haven't had a raise in six years, as is the case with the private sector. It's one thing we'll consider."

Ron Meyer, attorney for the FEA, challenge Scott's rosy view of the ruling. 

"It’s a great day for Florida families if starvation is a good thing,'' he said. "The fact of the matter is a school teacher, a policeman, a state worker, all these public employees, can scarcely afford a 3 percent reduction in their pay.'' 

Comments

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markm

As an Assistant Attorney General I spent 19 years working, utterly without pay of any kind, on nights , weekends and holidays, and I did it for a miserly wage of 25k, eventually raised (over 19 years) to 48k. I was also required to give the State interest-free loans to cover required travel expenses when handling appeals in Atlanta, Washington or other distant locations. The State's denial of compensation was usually the canard "but you get state benefits". I got disgusted and left when my garbage man started bringing home more pay, for fewer hours and less responsibility, then I had as a prosecutor. The public did not give a darn, referring to us as "lard bricks". OK, fine, so I left for private practice, and so should every attorney currently working for the state. Let's let dimwit Gov Scott prosecute murderers and child molesters.

Tee

Rick Scott Sucks!!! Who paid them off?

Dee

I considered the same thought..."who paid them off"?

Inesee R

Florida cannot sit idly by as our state pension and healthcare benefits send the state into bankruptcy. This was a small step, but a necessary step. There is no reason why workers cannot pay 3% out of their checks. To state people are going to starve because of this is patently absurd.

FL FF

Yeah people say that without knowing what people working under the state retirement make. I am a firefighte/emt and make $28k. So yeah it does effect people by taking the 3% from them.

Scott W

Inesee we had and still have the fattest pension fund in the country. It wasn't and never will be headed towards bankruptcy. This was just another example of politicians taking money from the working people so it could be shuffled off behind closed doors. Shame on the supreme court for this.. we all knew Rick Snott was evil but them too??

Mark W

I am appalled and disgusted by the Florida Supreme Court. I heard that politics makes for strange bedfellows, and it certainly applies in this case. Governor Scott should be very nervous. He will be a one term governor. If the fact that Florida chose a Democrat for president and not the dimwitted Republican nominee, Romney, should send a message loud and clear to the front door of Florida's Capitol. 2014 can NOT get here fast enough. I hope that Charlie Crist makes a run as a democratic governor. That would be an interesting election.

DavieDude123

Please show me where my 3% is going into my retirement fund. For those who say we should make a contribution into our retirement fund, I would love to, but their taking that 3% and putting into the general fund, never to be seen by FRS. If the state is going to force us to pay 3% into our retirement account, as a firefighter I should show a 6% contribution each year, 3% from me and 3% from my county employer. It's not happening I'm lock in at 3%, where is the other 3% going, they want to use that money to hire guards for schools,,,really

dave1041

What a scam as stated above they want to hire hire 2 guards at our school to watch over the kids, if they can find the money. Find the money, we have about 200 staff members at our school, teachers, Admn staff, front office folks and maintenaince. Taking an average salarey of 50K a year our 3% contribution comes to $360,000. And they don't know if they can afford them.

John Ravenell

How can anyone except one who is totally out of touch or out of his mind think that this ruling will give those who suffered from a 3% decrease hope in fulfilling the American dream, OR lure employers to Florida with the exception of those who are seeking workers that will work for even lower wages? Most of those who signed on with the state signed on primarily because of benefits. Now that those benefits have been taken away, what is there to look forward to when its time to turn in the time-card!

Scott Hodges

The majority of Florida's public employees, such as teachers, only get 48 percent of their salaries for retirement as it is. Most other states and systems offer 70 to 80 percent. Now that we are paying 3 percent in, the net benefit is 45 percent. The logic in the courts ruling is faulty. So the next time the state finds itself in a budget crunch, real or manufactured, it can simply rob the employee pension fund or impose a new "tax" on already underpaid state workers. To add insult to injury, the money the have illegally taken from state employees was NOT even put into the pension fund as it was stated to have been. Any chance it will be replaced by the time current employees retire??? Fat chance. Scott and his thieving thugs need to be voted out ASAP! End of story.

Amie

As a teacher, I find Florida's treatment of state employees appalling. I plan on leaving my position and using my Master's degree in math to find a better paying job. Rick Scott and Don Gaetz have found a formula for how NOT to recruit and retain highly qualified educators.

Mark W.

I concur with Amie's comment. I had 94% of my students pass their EOC, and have consistently shown great gains overall in my classes that I teach. I have been accepted into a Ph.D program and will pursue another career path. Governor Scott, and his cronies have been successful in pushing great teachers out of the profession. At least we can vote him out of a job in November 2014.

Mark W.

Florida is a wage thief

The state has withdrawn more than $900 million from employees salaries since the law took effect July 1, 2011, and are expected to take up to $2 billion by June 30, 2013, the end of the state’s current fiscal year.

Not replenish the pension fund, the monies have been WITHDRWAN and TAKEN.

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