Florida Republican lawmakers scoff at $2 billion pension ruling

Reuters News
Posted: Mar 07, 2012 6:43 PM
Florida Republican lawmakers scoff at $2 billion pension ruling

By Michael Peltier

TALLAHASSEE, Florida (Reuters) - Florida's Republican budget leaders said on Wednesday they were not panicked by a court ruling that could cost the cash-strapped state $2 billion in additional pension payments, because they were confident it will be overturned on appeal.

A judge ruled on Tuesday, in a move praised by union leaders, that lawmakers erred last year by requiring government employees to contribute 3 percent of their salaries toward their retirement plans, .

Legislators are poised to pass a $70 billion spending plan on Friday, and by law they must pass a balanced budget. But Senate President Mike Haridopolos said he was confident the ruling would be thrown out and the budget plan would survive.

"We expect our budget to be upheld by the courts through the appeals process," said Haridopolos, a Merritt Island Republican. "Just about every state in the union does this. We did it until 1974. The right thing to do is ask public servants like myself to contribute to their own retirement."

Leon County Circuit Judge Jackie Fulford threw out a 2011 law that requires state employees in the Florida Retirement System to start contributing toward their retirement fund. Fulford ruled the law violated the state's contract with existing employees and was therefore unconstitutional.

"To find otherwise would mean that a contract with our state government has no meaning and that citizens of our state can place no trust in the work of our legislature," Fulford wrote in the ruling. "Those are findings this court refuses to make."

If Fulford's ruling is upheld, Florida would be required to spend an additional $1 billion for the current fiscal year and $1 billon for the 2012 fiscal year that begins on July 1.

Having already filled a $1.5 billion budget gap in their current spending planning, Republican leaders say they would have no choice but to return and make deeper cuts if the ruling is upheld.

"That's not pennies in a jar. That is a budget buster," said incoming Senate President Don Gaetz, a Niceville Republican.

The pension issue has pitted Republican Governor Rick Scott and the Republican-led legislature against the Florida Education Association, AFSCME and other unions representing most of the 560,000 government workers affected by the law.

Scott, who unsuccessfully urged lawmakers to pass a 5 percent employee contribution requirement, immediately ordered the state's attorney to appeal, saying the ruling "doesn't make any sense."

"We are appealing it, and I'm sure it will be held constitutional, but think of the adverse impact it has on our state," Scott said.

Union leaders, however, were ecstatic.

"The judge's ruling confirms that the Florida Constitution requires the state to live up to its promises, including those made to the public workers by the state itself," said FEA President Andy Ford, whose union represents about 140,000 employees.

(Editing by Jane Sutton and Cynthia Johnston)