Supremes hear state retirement plan arguments

The state Supreme Court is scheduled to hear arguments this morning in a case that could boost the paychecks of more than a half-million teachers, police, firefighters and other state and local workers.

Public employees successfully challenged a 2011 state law requiring them to contribute 3 percent of their pay to the state pension plan. The offices of Gov. Rick Scott, Chief Financial Officer Jeff Atwater and Attorney General Pam Bondi will appeal this morning, arguing that the state’s ability to revise pension commitments is necessary and legal.

To Circuit Judge Jackie Fulford, who struck down the law in March in Tallahassee, it was a matter of collective bargaining and contract rights.

But to a pair of Tampa residents who are among the lead plaintiffs in the suit, it’s also a critical pocketbook issue.

“Ultimately, what you’re dealing with is taking more money from our compensation,” said Megan Allen, a fifth-grade teacher at Shaw Elementary in Tampa. “Think about it. That’s an extra bill a month. That’s a utility bill.”

Juan Baso, a semitrailer truck driver for Hillsborough County’s solid waste division and president of AFSCME Local 167, also signed on as a plaintiff. He noted that county employees have not had raises since 2008.

“On top of that they take out 3 percent more. For a lot of us that haven’t had raises because everything’s been frozen, it kinda hurts,” he said. “We can use that 3 percent for groceries, for gasoline — the price of gasoline is crazy.”

The class-action suit ultimately involves 560,000 employees working for more than 900 state and local government entities.

Employers began deducting the 3 percent on July 1, 2011. A rookie teacher in Hillsborough County earning $37,014 now has $1,110 dunned from her check each year for the Florida Retirement System. An engineer in public service earning $68,140 has $2,044 deducted.

The retirement plan had been what is known as “non-contributory” since 1975. Employers such as school districts, counties, law enforcement agencies and cities paid into the system at a rate of about 9 percent for regular employees.

Facing a state budget hole estimated at up to $4 billion, lawmakers ordered the employee contributions in a belt-tightening 2011 legislative session. Scott had originally sought a 5 percent contribution.

Other provisions of Senate Bill 2100 increased the years required for vesting in the plan from six to eight; raised the retirement age from 62 to 65 for most employees and increased required years of service from 30 to 33; and increased the retirement age for law enforcement and firefighters from 55 to 60 and their required years of service from 25 to 30.

Scott, Atwater and Bondi — who are appellants because they serve as the State Board of Administration, which oversees the pension system — argue that the issue is whether the Legislature may change the retirement system prospectively, or looking forward, as long as it does not affect benefits already earned.

They say the Supreme Court, most notably in a case involving the Florida Sheriffs Association in 1981, “ruled repeatedly … that the Legislature may change retirement benefits prospectively.”

The lower court ruling overturning the pension fund contribution violates Supreme Court precedent, Scott, Atwater and Bondi said, “and if left standing would handcuff the Legislature’s response to changing financial circumstances.”

Lane Wright, a spokesman for Scott, called it “an easy case to make, since it’s controlled by 30 years of Supreme Court precedent.

“The Florida Constitution and statutes allow the Legislature to change the pension on a going-forward basis. The Legislature was careful in crafting that to follow the law,” he said.

The appellants have been joined via friend-of-the-court briefs by the Legislature, the Florida League of Cities and the Florida Association of Counties, among other groups.

Cragin Mosteller, spokeswoman for the county group, pointed out that should the public employees prevail, the court could order the payroll deductions returned to public employees. With employees now contributing an estimated $800 million a year to the retirement system, “counties are looking at well over a billion-dollar hit,” she said.

“That’s during a time when we’re in our budgets making very difficult choices. It would have significant financial impact to the financial health of our counties and our communities.”

Allen, the Tampa teacher, is a member of the Hillsborough teacher’s union, but could hardly be considered a union rabble-rouser. She was selected as Hillsborough and ultimately Florida Teacher of the Year in 2010, becoming the state’s Christa McAuliffe Ambassador for Education. She was an educator in residence at the University of Central Florida and is involved in the New Millennium Initiative, an education policy advisory group of early-career teachers.

She sees the payroll deduction as yet another example of Florida’s ambivalence toward education funding.

“We really need to re-prioritize education funding in our state, period,” she said. Teaching is “a labor of love,” she said. “I think they deserve their promised compensation.”

Supreme Court rulings typically come several months after oral arguments. Since only state constitutional issues are at stake, the court is the end of the line for any appeals.