TALLAHASSEE — A high-stakes billion-dollar battle over public employee pensions was waged before the Florida Supreme Court on Friday.
A group of unions — led by the state’s teachers union — want the high court to strike down a new law that is forcing employees to pay
3 percent of their salaries for part of their retirement costs.
But during the hour-long hearing, justices appeared to be skeptical to arguments that the 2011 requirement violated collective bargaining and contract rights for the roughly 600,000 state workers, teachers, firefighters and sheriff’s deputies who are now contributing to their pension.
A decision by the Supreme Court could still be months away, but the end result will either be a vindication for Gov. Rick Scott and the GOP-controlled Legislature, or it will create a nearly $2 billion budget gap for state and local governments.
Lawmakers made the change to plug a previous budget shortfall. While that fact is not central to the lawsuit it appeared to weigh on justices.
“Why would the Legislature bind itself forever no matter what the budget crisis is?” Justice Barbara Pariente said at one point.
Ron Meyer, the lawyer representing the Florida Education Association and other unions, contended that the Legislature can force newly hired public employees to pay for their pension, but that it has no right to pass that mandate on those already on the job.
“You can’t change the game in the middle of the game,” Meyer said.
Meyer after the hearing compared the pension change to a bank altering the terms of a mortgage after a homeowner had been paying it off for years.
This argument, however didn’t seem to sway Justice Charles Canady. Canady, a former congressman appointed to the court by former Gov. Charlie Crist, pointed out that public employees can still lose their jobs due to budget cuts.
“I have a hard time understanding how — when someone does not have a continuing right of employment — they have a continuing right to a benefit,” Canady told Meyer.
Florida was once one of only a handful of states that did not require public employees to pay part of their pension costs. During his campaign for governor Scott vowed to end the practice.
But legislators did not use the money to shore up the $100-billion plus Florida Retirement System. Instead they used it to help deal with a nearly $4 billion budget shortfall.
Public employees and their unions called the contribution an “income tax” and said it amounted to a 3 percent pay cut after they’ve gone years without raises.
A Tallahassee circuit court judge earlier this sided with the unions. Judge Jackie Fulford noted employees have a constitutional right to collectively bargain over the terms and conditions of their employment, but no such negotiations were conducted in this case.
Fulford also cited prior Florida Supreme Court opinions and a 1974 law that declared pension benefits to be a contract right.
Lawyers for the state, however, pointed to a 30-year old Supreme Court decision that they say made it clear that the Legislature has the right to change employee benefits.
Raoul Cantero, a former justice himself, argued that the decision gave lawmakers a “bright line and a clear line” and that the high court would have to retreat from its previous ruling to go along with the unions.
Jesse Panuccio, general counsel for Scott, said the governor’s office was “pretty confident” it would prevail in the lawsuit.
Scott himself put out a statement where he said he expected the court to rule in his favor of what he called “common-sense public pension reform.”
“This case is about our efforts to maintain a responsible and sustainable budget,” Scott said.
Meyer, however, warned that if the high court overturns Fulford’s ruling it would render a key part of collective bargaining meaningless.