Pension plan changes ruled unconstitutional
USF faculty, staff and other state employees having 3 percent of their annual salaries – or a $1 billion collective pot – put toward Florida’s pension plan was ruled unconstitutional Tuesday in a circuit court.
Though the funds taken from state employee salaries go toward the pension plan for the employees’ future retirement, Leon County Circuit Court Judge Jackie Fulford ruled the state could not alter the pre-existing parameters of its contract with state workers.
“The 2011 Legislature, when faced with a budget shortfall, turned to the employees of the State of Florida and ignored the contractual rights given to them by the Legislature in 1974,” she said in her ruling.
The suit against Florida was sought by the Florida Education Association and other government entities.
Fulford said the Legislature’s actions resulted in an “unconstitutional taking of private property without full compensation, and an abridgement of the rights of public employees to collectively bargain over conditions of employment.”
“To find otherwise would mean that a contract with our state government has no
meaning and that the citizens of our state can place no trust in the work of our Legislature,” she said. “Those are the findings this Court refuses to make.”
Gov. Rick Scott, who spearheaded the shift of funds last year, said in a statement “as you would expect, I believe this decision is simply wrong.”
“The trial judge has ignored thirty years of Supreme Court precedent in a decision that refuses to allow Florida to have common-sense pension reform,” he said. “This is another example of a court substituting its own policy preferences for those of the Legislature.”
Scott said the state will make a swift appeal to reverse the decision, which shouldn’t affect the ongoing 2012-13 state budgeting process.
In a reaction statement posted to the Florida Senate website, Senate President Mike Haridopolos, R-Merritt Island, voiced his displeasure with the ruling.
“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,” he said.
Sen. JD Alexander, R-Lake Wales, said he was equally horrified by Fulford’s decision.
“How can the court direct appropriations? They can’t,” he said. “Neither can the executive branch, neither can a previous Legislature. Only this Legislature can direct constitutional appropriations. Period. End of story.”
Yet Greg McColm, spokesman for the USF chapter of United Faculty of Florida (UFF), said the complaints against Fulford are misdirected.
“While they are complaining about Judge Fulford, that complaint is merely shooting the messenger,” he said. “It does not change the fact that Florida has to clean up its act.”
McColm said rather than a budget crisis, Florida’s real problem is its tax code and said the ruling “may force the Legislature to really think about getting their financial house in order.”
“The problem the state has at the moment is a nearly $2 billion hole out of a $70 billion budget – that is something like 3 percent,” he said. “That is not catastrophic. It is entirely a result of any time someone proposes tax reform, there is an immediate rejection because many legislators, particularly the Senate leadership, is concerned that a tax reform will lead to accusations that the Florida Legislature is breaking down.”
The state could be responsible for repaying the $1 billion they have collected from state employees since they began collecting the additional pension funds in July. It would then need to seek some other avenue to cover the gap in the budget or find areas to cut $1 billion from the budget, according to Fulford’s ruling.
Mark Walsh, USF director of Government Affairs, said in an email to The Oracle that the ruling is unlikely to affect this year’s state budgeting process.
“Legislative leadership has indicated its intent to appeal the decision and seek an immediate stay of the repayment until the appeal is resolved,” he wrote. “So it’s unlikely to change anything until the appeal process is exhausted, which could take many months or even years.”
He said the University has no opinion on the decision at this point, as it would not be able to “begin to speculate on what impact” the ruling could have on USF.