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Judge strikes down pension payroll contributions — blows $1 billion hole in state budget

by John Kennedy | March 6th, 2012

Gov. Rick Scott and the Republican-ruled Legislature violated the state’s constitutional right to collective bargaining last year when it ordered 3 percent payroll contributions for 655,000 government workers who belong to the Florida Retirement System, a Leon County Circuit judge ruled Tuesday.

Judge Jackie Fulford’s ruling blows a $1 billion hole in the state’s current-year budget, while also costing the state’s 67 counties another $600 million that would now have to be repaid to employees in the pension fund. The debt, however, is likely to be put on hold once state officials appeal the ruling — which is expected quickly.

The Florida Supreme Court is likely to ultimately hear the case, attorneys for both sides have said.

In her decision, Fulford said legislation approved last spring which ordered the contributions was unconstitutional because it violated contractual rights granted employees in 1974, when the pension plan was converted to a “noncontributory system” for workers. 

“To find otherwise would mean that a contract with our state government has not meaning and that the citizens of our state can place no trust in the work of our Legislature,” Fulford said.

The lawsuit was filed  last summer against Scott and other state officials on behalf of 11 public employees who are members of the retirement system.

Andy Ford, president of the Florida Education Association, the state’s largest teachers’ union, called it a “historic moment”  for labor rights.

“It proves the Florida governor and the Florida Legislature are not above the law and they have to follow the constitution,” Ford said. “Life is a series of choices and the Florida Legislature and governor have made their choices and they need to re-evaluate where they are.

“They have decided…over and over again to provide tax relief to big corporations and to those who put contributions into their campaigns. That needs to stop, they need to fund the services of the state of Florida.”

House Speaker Dean Cannon, R-Winter Park, said he disagreed with Fulford’s ruling, which he also characterized as an early step in a long legal fight. He also said lawmakers would continue to rely on cash from the FRS payroll contributions in the $70 billion budget proposal for the coming year that is poised for a final vote Friday.

 “The ruling of a trial court judge is the first and not the final step. Today’s ruling will have no immediate impact on the passage of the 2012-2013 General Appropriations Act, which the House will take up this Friday in fulfillment of our constitutional responsibility to pass a balanced budget.”

 

 

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46 Responses to “Judge strikes down pension payroll contributions — blows $1 billion hole in state budget”

  1. Tsk, Tsk Says:

    When will municipal gov’t's learn from corporate America — DBPP’s are lead zeppelins that inevitably turn upside down.

    Can you say ‘Win the battle but lose the War’?

  2. lol donkey Says:

    Power to the people right on!

  3. Carol Gload Says:

    Let’s see if Scott eases up on the ridiculous Florida employee drug testing (they don’t make enough $$ to buy drugs, trust me) while this is on the back burner now. Seriously, the average Floridian has no idea how poorly state employees are paid – this is a vicious tool by the governor.

  4. Florida Legislator Says:

    What? We need to fund education? But we had all those grandiose plans of getting rid of the corporate tax to make our contributors happy! Fortunately, we can now blame public workers for the big hole in our budget.
    It is about time people understand that smart, educated citizens are a danger to our way of life.

  5. R. Scott Says:

    State Constitution???
    We don’t need no stinkin constitution!!

  6. Nice! Says:

    Voldemort just died a little inside…

  7. greg Says:

    @ FLorida Legislator…..don’t worry about educated citizens…there aren’t enough in the US to make that much of a difference….

  8. Ginger1212 Says:

    Time to find another way to fund the State budget. FRS employees are examples of the dying middle class supporting everything. Clean up the spending, drop politicians pay and start taxing the casinos in “Sovereign Nations” realign the monies from the Lottery. Fair tax could be another solution that EVERY ONE would have to take part in.

  9. Theygotsumonions Says:

    How about them apples Speaker Cannon, eh?! You and your fellow anti-middle class cronies in Tally, including the head criminal in charge, are in for a rude awakening come next election. So you’re going to appeal…care to explain WHY to the middle class voters in your region, or will you just continue to address giving corporations tax breaks and how much we need to “privatize” our already full prisons?!

  10. whasup Says:

    It’s going to make the next round of collective bargaining with the state employees very interesting.

    I expect the Governor will propose that state employees take a 5% pay cut and a larger cut to retirement benefits earned in the future. When the unions balk, the state will declare an impasse.

    And then the legislature gets to resolve the impasse any way it wants.

  11. Lock12 Says:

    The state legislature can void or invalidate any contract written by any state agency, department or individual for any reason.

    Moreover this lawsuit is defective on its face, and should not have been heard. Under sovereign immunity, the state of Florida cannot be sued in a Florida courtroom without the consent of the state legislature.

    The ruling by the judge in this case has no basis whatsoever in law or legal precedent. This judge simply believes that the underlying issue, whether certain state employees should be required to contribute to the funding of their retirement plans, is more important and therefore supersedes the formal constraints imposed by the legal and judicial systems.

  12. howie Says:

    This judge is a lawyer. Lawyers never made an honest buck in their life so why would stealing money from taxpayers to buy union votes mean anything to them.

  13. Frank Says:

    So, a state court judge who is also being forced to pay the 3% rules against it. Who would have thought? All I have to say, is that if the state losses this in appeals, I personally don’t care where the money comes from so long as its not from tax increases. Let the agencies make the necessary staff cuts to pay back the funds to employees.

  14. Dee Says:

    Tick Tock Rich Scott. We are counting the days till you move out of Florica a has been Govnuh.

  15. Teacher Says:

    Dear Lock 12,
    Had the monies in question,indeed, been going into our FRS accounts, this would not have been an issue. However, my 3% has NOT been going to MY or any other FRS account.
    The state has taken MY 3% and used it to 1) Give FPL sizeable corporate tax breaks, while their executives saw enormous bonuses (not to mention our rates were raised as well), 2) Send Governor Scott and Crew to Brazil and Panama under the guise of “fostering economic partnerships”, and 3) to create a commission to lobby Hollywood filmmakers to shoot movies in Florida. That is where my 3% is going.

    Please note that House Speaker Cannon said “lawmakers would continue to rely on cash from the FRS payroll contributions in the $70 billion budget proposal for the coming year “. He did NOT say “State Workers will continue to contribute towards their retirement accounts.” This shows complete disregard for both Florida State Workers, and the Florida Judicial System.

    When one group has a percentage of their wages deducted to fill a legislative budget gap and other groups do not, it is called a Targeted Income Tax, which is illegal and unfair. My 3% is NOT a contribution to my pension plan. It is a Targeted Income Tax.

    That, Sir, is the problem, and that Sir, is why Judge Fulford struck it down.

    It is not a question of Teachers and other state workers refusing to contribute to their pension plans. It is a question of whether we should continue to fund the Corporate Cronyism that defines the current legislature.

  16. mcru Says:

    OMG a 3% contribution to their own retirement system. How could anyone be expected to make a sacrafice such as this!

  17. luckydog Says:

    Do away with state paid pensions, make new employees pay into 401K or 457 plans if they want a pension. Thats what most orher governments and all businessws have done.

  18. spence Says:

    A blow against Grand Govenor Turd, who tried to sell a PAY CUT as a “pension contibution”, all the same–still violated the State Constitution and overstepping his authority.

  19. Floirdian Says:

    Unions are driving us to a point of no return. Can you say Greece! How much more stupidity are we going to stand for from these liberal Judges. Enough is enough. The truth be known, it is the Admins who signed these Union thug contracts that are the problem.

  20. just sayin" Says:

    The “3%” in question is almost 50% of the TOTAL contribution made to the pension plan, by the way. The congressman did not misspeak, either.

  21. Big Dem Says:

    And the teachers’ unions cheer while the students and taxpayers suffer. Ah, yes. More “social justice” from Democrats.

  22. notamathteacher Says:

    If public employees were paid decently, it would not matter about the pensions… The promise of a pension was helpful to offset the woeful wages.

  23. Blind Justice Says:

    Finally, a judge is defending our rights under the Florida Constitution from the GOP “Strumtruppen” in the Florida Legislature.

  24. AG Says:

    As was stated above. The so called 3% contribution has not gone into the retirement fund. It instead has been hijacked to pay off corporate cronies and travel expenses among other things that have nothing to do with the FRS. I have no problem with contributing to my pension so long as it actually goes toward my pension.
    The head crook in charge simply found another way to steal money from the members of the FRS much like he found a way to steal from Blue Cross. Only this time, the judge put a foot down on this losers plans. Idiots who support this turd of a governor are being duped. When will you learn that the Repubs. don’t care about the middle class and only about their rich corporate donors and buddies. If you’re not a member of the upper class or rich elites, you don’t need to be backing them. They are doing just fine without you. Even better if you just lay down and let them step all over you.

  25. RPOF MUST GO Says:

    Republican fascists MUST – BE – VOTED – OUT!!!!

  26. Mike Coleman Says:

    Let’s see if this take is correct?
    Florida’s Legislature has been collecting 3% of Florida’s employees for the stated purpose of acruing/investing this money to fund their pensions.
    Instead of acruing/investing the 3%, this money has been used to fund hole in the State Budget, correct?
    During this same period, the Legislature has given Tax Breaks or elimited Taxes that effect specific Businesses, Industries, and types of business taxation categories, in a period of falling Sales and Property Tax income leaving huge budget holes tax breaks were deemed legislative imperatives.
    It appears that many of the entities receiving the preferential taxation are also major donors to many Florida Legislators and Senators.
    All parties involved would swear there has been no Qiud Pro Quo.
    A logical assumption would be reasonable to say there is a strong appearance that there was.
    And it actually appears that these tax breaks were funded with the 3% Pension deduction.
    I can see how a Judge, one who may be out that 3% themselves, would issue an injunction.
    Sometimes it takes a reversal like this, courtesy of our Judicial Branch, to get the Citizens attention.

  27. Lock12 Says:

    Dear Teacher:

    You, sir, are missing the point, sir.

    Your argument in support of this judge’s clearly unconstitutional ruling is mostly inane, self-serving, transparently political invective that is entirely irrelevant to my remarks above.

    I never commented on the merits of the underlying case, nor do I really care about who pays for the 3% withholding, how its used, or whether the governor spends it on prostitutes and cocaine.

    The larger issue here is that this judge just thumbed their nose at the state’s constitution and centuries of direct and unambiguous case law on sovereign immunity, all in a not-so-subtle hat-tip to you and your state union buddies.

    You seem to think that’s OK, that the underlying merits of the case somehow justify this judge’s clearly impeachable conduct.

    Well, you sir, are wrong.

  28. Fed Up Says:

    Public employees also pay taxes and live and spend money in the commmunity.This 3% was forced, not a choice and did not even go near the already solvent FRS. That is the issue; and Governor Scott and the legislature has constantly displayed impeachable conduct.

  29. Johnny Says:

    Funny the residents of certain areas of Florida were guaranteed to have a life long residence on leased land with no property taxes in a contract with the state. Then the counties came into financial trouble and decided that these areas should be taxed also. And the courts after rejecting this argument in the past, are now siding with the cash strapped counties.
    I love the double standard in the courts.

  30. Johnny Says:

    @notmathteacher
    After spending years and years dealing with many of Florida’s civil servants as a business owner, and employing my own people, i can tell you that many Florida civil servants are vastly overpaid.
    If you want a raise. Work harder, produce more, and ditch the massive apathy most of them have for the citizens. Remember they work for us, not the other way around.
    The DEP and the DCF are in a competition to see who can have the worst employees in the state.

  31. AG Says:

    Dear Lock21:

    So you say that the ruling Judge has no jurisdiction in this case and is committing in impeachable offense by taking/ruling on this case. A case that was filed and brought before her. How is this possible and why then would there even be a case if she were not able to even hear it in the first place?. I say the State is the one committing the impeachable offense when they themselves thumb their noses at the State’s own Constitution and created this mess in the first place. You sound like the typical right wing lawyer crying foul in defense of the indefensible. Who is paying the 3% and how it’s being used is exactly the problem. WHAT they are doing is UNCONSTITUTIONAL! and now it will have to stop.

    Hey Johnny: You paint public servants with a broad brush. Your experience along does NOT a case make and no one was asking for a raise. It is our money and if we are made to pay into our pensions then DAMN IT, it should Damn well be going into OUR PENSIONS and not for Hookers and Cocaine unless that’s what I want to spend my earned pension on and that would be my business not yours….

  32. pbc teach Says:

    I have been teaching for 5 years with no raise and now I was slapped with an effective 3% decrease. Thank you your honor!!!!! Rick Scott can find his $ somewhere else that gets “excreted” on less every day.

  33. George Says:

    Impeach Scott after Wisconsin gets rid of theirs

    http://impeachscottwalker.us/

  34. Retirement Plan Says:

    Choosing a benefit TPA is very essential, TPA firm for business growth that supports its advisors for long term revenue sharing programs for lifetime services. It is quite interesting plan for us.

    Retirement Plan

  35. State Employee Says:

    Finally! A Judge who sees things our way! You know, if these idiots in office want to increase funds, how about losing some of the earmarked $ for their local programs! As stateworkers, we are the lowest paid state workers in the entire country! I know state workers who are making such minimal salaries, that they are in need of public assistance to help their families!

    If these idiots in office want to change the retirement system, then have it start with new state employees….and the rest of us should be ‘grandfathered’ in, the current ‘noncontributory’ retirement system!

    By the way Gov. Scott…….I want my retirement contributions back….with interest….and I want it now!!!!

  36. Mike D. Says:

    This gravy-train madness has to end at some point. Why do you think the post office is going under? Because they have to fund the shortfall in PBO (projected benefit obligation) and healthcare. These pensions have to be discontinued.

  37. bc Says:

    Are you kidding me people that money is taken from us and put into the general fund to balance the budget. I will never see that money. Can you say state income tax on the backs of FRS members why not on tax everybody.

  38. Mike D. Says:

    Where does the difference between the plan assets and the payouts for the pensions come from? The General Fund? I thought a check had to be cut each year for any deficiency anyway.

  39. Actuary Says:

    The plan bene obligation is computed based on the demographics and health of each participant in the plan. It is discounted back to a number that is compared to the plan assets. Any negative difference is considered an ‘expense’ in the next year’s budget. I’m sure this ‘expense’ was covered in the budgeting process with the 3% contribution. The subsequent ruling in essence ‘blew a hole’ as the writer put it, in the budget. The short fall would’ve come out of the Gen Fund, hence, that’s what Cannon was referring to. Not making any excuses here, just trying to ‘splain.

  40. howie Says:

    State workers who whine they are underpaid should quit instead of stiffing us taxpayers to pay more than market price for their services. If they can get paid more why the hell would they stay where they are?

  41. Ivy Dearman Says:

    While the 3% is supposed to be going into my forced pension, a retirement for which I have been responsibly investing on my own for the past 25 years and for which I have no need of anyone else investing for me without consent, I would like to know where my money is invested, how much it is earning and be given a detailed statement each quarter. I would like to know that at the end of the road our politicians actually care if we can fun fund our mortgages and pay our food bills!!! Just the necessaries would be nice at the end of a long career teaching! AND BTW I have yet to meet anyone, after asking over 300 people, who says that they actually voted for this governor SCOTT??? Keep fixing the system-welcome to American Democracy!!!

  42. Linda Campbell Says:

    With two family members working for the state, I hope this Judge’s ruling stands. I can attest to the low pay two different groups working for the state receive partially because the pension was promised as a paid for benefit and part of their salary package. No raises for 4 years now for an attorney and a teacher. I can also attest to the lower pay a state attorney makes in comparison to a private practice attorney, because I have both in the family. To answer a question from 40., they stay where they are due to the promised ‘benefits’ package. You will see many leaving with Scott in charge.

  43. Confused Says:

    Why is this more about partisan politics and less about the ‘failed’ mathematics of pensions?

  44. MOTHER Says:

    Gov. Snott is bankrupting the state with frivelous lawsuits. IMPEACH the buzzards that are feeding off the bare bones of state workers. Property taxes and insurance rates went up. Not my salary- it went down. Over 14,000 state workers already laid off. soon those exstate workers will be criminals and filling the overcrowded prisons to make it more enticing to go private. STOP these boneheads from causing anymore damage to Florida.

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  46. Ron Patrick Says:

    A hole in the budget? Not at all. The judges decision does not affect the budget. That 3% payroll deduction goes into the employees’ retirement accounts, not the budget.

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