Leon County Circuit Judge Jackie Fulford ruled Tuesday that last year’s pension plan that would effectively reduce public employees’ salaries by 3 percent was unconstitutional.
Florida Senate President Mike Haridopolos, R-Merritt Island, and other legislators are calling this an issue of activist judging – when a court ignores the law in favor of personal interest. Yet this is not the case.
A mandatory pension plan in 1974 required employers, not employees, to contribute to pensions for state employees. According to the ruling, the plan was meant to adjust for increases in the state’s cost of living. Though a 1981 Florida Supreme Court ruling allows the state Legislature to use employees’ money for future projects, it does not allow them to overhaul employee contracts to cover holes in the budget.
Fulford’s ruling that money collected under the new plan be returned to employees now leaves a $1 billion hole in the 2011 budget, another $1 billion for 2012 and has a $600 million impact for counties whose employees are in the Florida Retirement System, according to the Tampa Bay Times.
While using employee money to fill in budget gaps may offer a temporary solution, it may cause problems later on when the time comes to provide these same employees with their retirement pensions. If the Legislature cannot compensate for returning these benefits, the budget will continue to fall short when it comes to retirement.
In contrast to the 1974 plan, which was created in reaction to the increased cost of living, the 2011 plan eliminated cost of living adjustments, according to the Times.
Considering the plan was instated to compensate for gaps in the budget, the failure lies not in the courts, but in the 2011-12 budget itself. Had legislators used better management in designing the budget, they would have considered options that do not violate employee contracts for the state’s financial interest.
Gov. Rick Scott called the decision “another example of a court substituting its own policy preferences for those of the Legislature.” Yet it appears that the opposite is true in this case. The Legislature substituted the interests of its citizens and employees – the very people they work to protect – for those of the Legislature.
Though other states have pension plans, the attempt to balance the budget on the backs of state employees does not benefit those who need it most because it is hurting both their finances and their constitutional right to “collectively bargain over conditions of their employment,” as Fulford put it.
While Fulford’s decision may create a temporary issue in serving Florida’s retired employees, the budget needs to better address how to handle the costs of retirement, and this should encourage legislators to consider honest ways of serving this population.
Creating new laws to compensate for temporary distress is unconstitutional in this instance. The court decision was right in that it served the people and upheld the law.