By a 4-3 decision, the Florida Supreme Court has upheld the pension reform law that requires nearly every one of the State, County and City government employees to contribute 3% of their salary to their retirement fund. Prior to passage of the law, Florida workers employed by public agencies participating in the Florida Retirement System were entitled to a pension from the State without making any contributions to the fund. However, as of July 1, 2011, pursuant to legislation enacted by the Republican-controlled Legislature, and signed by Republican Governor Rick Scott, employees covered under the plan have been required to pay into the system. Immediately upon its enactment, various Government employee labor unions challenged the law on constitutional grounds. The lower court sided with the labor union plaintiffs and held that the law violated the contractual rights of the employees. Yesterday, the Florida Supreme Court reversed that ruling.
While the challenge to the law rested on fairly technical grounds involving the interpretation of a previous Florida statute that prohibited the State from taking away accrued pension benefits under existing bargaining agreements, the bottom line question in the case was whether the State Legislature could prospectively modify pension plans it funds. The Court held that, while the law protects employees’ pension benefits already bargained for and agreed to from being taken away, future benefits can be changed. Since the pension reform only applied to future benefits, it was held not to take away any benefits already contracted for.
Pension reform was one of the issues in Governor Scott’s platform when he ran for the office in 2010. He argued that public employees should contribute to their retirement fund, as those in the private sector do, rather than have a totally free ride on the taxpayers. Yesterday, one of his principal promises was confirmed. He reacted to the Court’s decision with the following post on his Facebook page:
“The court’s ruling today supports our efforts to lower the cost of living for Florida families. This means even more businesses will locate and grow in our state, which creates even more opportunities for Floridians to live their version of the American dream.”
Lenny Curry, Chairman of the Republican Party of Florida concurred in an email sent to supporters:
“Today, the Florida Supreme Court ruled . . . in favor of Governor Rick Scott's campaign promise to make Florida's state pension fund more secure by requiring government employees to contribute to their pensions just like private employees do every month.
Day in and day out, Governor Rick Scott is fighting to keep the cost of living low for Florida families and on fixing our state's underlying economic problems, and it's starting to pay off. Thanks to Governor Scott:
1. Florida has become a leading state for job creation in America
2. Florida's unemployment rate is lower than it has been in many years
3. Florida's housing market is on the rebound.
If you agree that he's done a fantastic job, let him know it. Post a message of support on his Facebook page.”
© Blas E. Padrino. All rights reserved
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