March 7 (Bloomberg) -- A judge blocked Florida Governor Rick Scott’s changes to the state’s public employee pension system that were part of an effort to save $1 billion a year.
Leon County Circuit Judge Jackie Fulford in Tallahassee yesterday called the benefit reductions an “unconstitutional taking of private property without full compensation and an abridgment of the rights of public employees to collective bargain over conditions of employment.”
As part of a pension overhaul pushed last year by the Republican governor, 59, legislators changed the way pensions were funded, requiring workers to contribute 3 percent of their pay and eliminating the retirement fund’s cost of living adjustment for employees retiring after the law took effect in August. The savings were redirected to the Florida Retirement System, which covers 655,000 state employees, saving general fund money to use for other programs.
“The decision is wrong,” Brian Burgess, spokesman for Scoot, said after the court hearing. “The judge has ignored 30 years of Supreme Court precedent by refusing to let Florida have common-sense pension reform.”
The state will file a “swift appeal” to reverse the ruling, the governor said in an e-mailed statement.
The Florida Education Association, which represents the state’s teachers, sued the state in June, arguing the funding switch was illegal because it changed the rules for current employees. The association was joined in the suit by the AFL-CIO and unions for nurses, police officers and government supervisors.
“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,” Andy Ford, president of the teachers’ group, said in a statement.
The state Legislature is completing the budget for the 2012-2013 fiscal year. Legislators are working to close a $2 billion revenue shortfall.
Fulford wrote in yesterday’s ruling that the Legislature “preserved” $1.2 billion in unspent general revenue funds for the 2011-2012 fiscal year.
“All indications are that the Florida Legislature chose to effectuate (the measure) in order to make funds available for other purposes,” Fulford said. She ordered the state to reimburse employees the 3 percent that was deducted from their pay over the past year and to restore the cost of living adjustment to the pension fund.
Senate President Mike Haridopolos, a Republican from Merritt Island, said in a statement he was “deeply disappointed” by the decision from Fulford, who last year ruled that the Legislature could not privatize prisons through the budget process.
“She has proven once again that she is an activist judge who has no problem overstepping her authority and overruling the decisions of the state’s elected representatives and the critical role that we play as the budget writers,” Haridopolos said in the statement. “This ruling is a radical departure from past precedent.”
House Speaker Dean Cannon, a Republican from Winter Park, said in a statement that fiscally responsible adjustments to the Florida Retirement System are needed to protect the fund’s long-term solvency and ensure that massive layoffs can be avoided.
Not Final Step
“The ruling of a trial court judge is the first and not the final step,” Cannon said.
Rod Smith, chairman of Florida’s Democratic Party, said the decision will protect working families from “the serious and devastating consequences of the GOP’s extreme, Tea Party agenda.”
Hal Johnson, general counsel for the Florida Police Benevolent Association, one of the unions that joined the suit, said he was sure the governor and the Legislature will appeal the ruling.
“We’ll see what the Supreme Court says,” he said. “I’d rather be on our side of the order than their side of the order.”
The case is Williams v. Scott, 11-CA-1584, Second Judicial Circuit, Tallahassee, Florida.