Florida Education Association Sues State

FEA suing state over pay cuts to teachers, other state workers for pension “contribution.”

TALLAHASSEE – The Florida Education Association has filed a lawsuit today in Circuit Court in Tallahassee seeking to stop the 3 percent pay cut on teachers, school employees and other workers imposed by the Florida Legislature and signed by Gov. Rick Scott.

The lawsuit asserts that the Legislature enacted legislation that was unconstitutional when that body required that 3 percent of the salaries of active members of the Florida Retirement System (FRS) be taken from such employees to serve as “contributions” toward their retirement benefits. The lawsuit further contends that the actions by the Legislature to reduce the cost-of-living benefits of those employees were also unconstitutional.
“This pay cut was used by legislative leadership to make up a budget shortfall on the backs of teachers, law-enforcement officers, firefighters and other state workers,” said FEA President Andy Ford. “It is essentially an income tax levied only on workers belonging to the Florida Retirement System. It’s unfair – and it breaks promises made to these employees when they chose to work to improve our state.

 

“While the state of Florida may make the policy decision to ask future employees to contribute to their retirement, it may not unilaterally change the covenant it made with current employees,” Ford said.

The lawsuit alleges that Florida law expressly provides that the Florida Retirement System is one in which employees do not have to contribute part of their salaries and describes that as a contractual obligation of the State. The suit claims that the Legislature’s action unconstitutionally impairs those contractual rights.

The FRS collects retirement money for more that 900 state and local government employers in the state, covering 655,000 active employee members and providing benefits to 219,000 retired members. It has been a non-contributory plan since 1974.

The lawsuit names Gov. Rick Scott, Chief Financial Officer Jeff Atwater, Attorney General Pam Bondi and John Miles, secretary of the Department of Management Services, as defendants in the lawsuit. Scott, Atwater and Bondi are the members of the State Board of Administration that is responsible for overseeing the Florida Retirement System Trust Fund and Miles runs the agency that oversees the fund.

Attorney Ron Meyer will be requesting the court to segregate the money it collects from the 3 percent pay cuts and place it in an interest bearing account until the lawsuit is fully settled. If the court agrees with the claims, teachers, school employees and other public workers would receive their money back with interest.

Ford said he was fully aware that FEA risked incurring the wrath of Senate President Mike Haridopolos, House Speaker Dean Cannon and other top legislative leaders and that retribution toward the union and its members could be in the offing.

“This past legislative session, FEA was fully in the crosshairs of legislative leaders with SB 736, which will upend the teaching profession, massive budget cuts to public education and a spate of bills designed to put our union, and other public-sector unions, out of business,” Ford said. “But the importance of doing the right thing and protecting the constitutional rights of our members trumps the fears of legislative payback.”

All materials filed this morning are available (or will be soon) at http://www.meyerbrookslaw.com/Litigation.htm.

Q & A

This type of lawsuit can take years -- What happens to the money in the mean time?

We have asked the court to segregate the money it collects from the 3 percent pay cuts and place it in an interest bearing account until the lawsuit is fully settled. If the court agrees with the claims, teachers, school employees and other public workers would receive their pay back with interest.

Are you afraid of political retribution from legislators? Do you think they will pass SB 830 if there is a special session?

We took that into consideration, but we have to do what is right for the public employees and taxpayers of this state. The importance of doing the right thing and protecting the constitutional rights of our members trumps the fears of legislative payback.

If the Legislature comes back for a budget special session – could we see more layoffs in education? More cuts?

Our children deserve better than that. More cuts to the education budget will mean more layoffs and fewer programs – that is a choice the Legislature would make… but they don’t have to.   If they can find funds to fund corporate tax breaks, they should be able to find money for something as important as our children’s education. They should be investing in our children, not in tax-break schemes that haven’t worked in the past.

What is your ultimate goal here?

Our goal is what we fight for everyday: to protect our members rights. However, this goes even further. Florida’s political leaders cannot be allowed to continue to disrespect the middle class – and those that teach our children, keep our streets safe and risk their lives for us everyday.

What are your other legal challenges? What’s next?FEA continues to review legislation that has an impact on public education. We have concerns about several different measures passed by the Legislature but have made no definitive decisions about our next steps. We plan on continuing our review and we will announce our decisions as they are finalized.

How do you explain to the rest of the state who are not public employees and are making retirement contributions? Isn’t it only fair that public employees make contributions to their OWN retirement?

It is important to remember the 3 percent contribution is not an optional contribution. It is a mandatory contribution – forced upon public employees by the Legislature. Private sector employees have a choice as to whether they contribute or not contribute to a retirement fund -- and they get to choose how much they can afford to contribute.
Besides, when current employees were hired, the law stated that the Florida Retirement System is a fund that would not require employee contributions. That’s part of the promise the state makes to employees when they participate in the system.Additionally, if the state, as a matter of policy, wishes to have employees contribute to their pensions, they may do that for new employees. The point in this lawsuit is that the state cannot break the covenants it has made to its present workforce.
Just because CEOs of big corporations have broken promises to their employees – and enriched themselves beyond imagination in the process – does not mean that ourstate government should do the same. We believe that a promise is a promise and the state of Florida should abide by the promises it makes.

If they do not require pension contributions, where should the state go to get the dollars to balance the budget?

They have plenty of choices. Senate President Mike Haridopolos and House Speaker Dean Cannon allowed this irresponsible, reckless and unconstitutional way ofbalancing the budget instead of properly addressing the shortfall. Over the past decade, the Legislature has chosen to provide tax breaks to investors and corporations that have accumulated many billions of dollars. If those tax breaks had not been enacted, there would have been no shortfall this year.
Legislative leaders have a number of avenues that they can use to address any budgetshortfall – such as closing sales-tax loopholes, aggressively collecting sales tax on Internet sales, or repealing the tax breaks for investors and corporations.
The Legislature proposed contributions as high as 8 percent and the governor even wanted 5 percent -- aren’t you guys being greedy?If you want to talk about greed, go talk to the Florida Chamber and AIF. They seem to think Florida’s education funding is their personal reserve for tax breaks for their wealthiest members. Over the past 12 years, those tax breaks were widely touted as ways to create jobs and grow the state’s economy. But after handing out billions and billions of dollars worth of tax breaks to corporations and the well-heeled, Florida has one of the highest unemployment rates and its economy is one of the weakest in the nation.

Where are the other unions on this? AFL-CIO? How about police and firefighters?The Florida Police Benevolent Association has indicated that it will be intervening in this suit in support of the issues that we raise. The Fraternal Order of Police is represented in the suit through three uniformed officers who are plaintiffs. The SEIU has also joined the action through four of its members who participate in the FRS. We anticipate that other organizations will join in this fight on behalf of their members.

Did you talk to legislative leadership? 

Any other legislators? What was their reaction?

We talked to some – but this was an organizational decision. We are going into this fully understanding that legislative political retaliation is possible. Since we are dealing with people’s livelihoods, it is our hope that the Florida Legislature finds real solutions to our state’s budget needs.

Will they have to come back into a special session?

We do not believe that a special session is necessary. We are simply asking the court at this time to segregate the money that will be deducted from salaries starting July 1 to preserve it for when the case is finally decided. If the court upholds our claims and returns the money to employees throughout the state, the Legislature may have to make budget adjustments. However, we believe that can be accomplished during the regular session. The FRS has the ability to continue its effective operations while this lawsuit works its way through the courts.

Some lawmakers have said that this is about the taxpayer and all of Florida and FEA is only thinking about themselves.This was a very difficult decision; however it is the right decision. Public employees are now being forced to pay into their retirement – whether they can afford it or not. That choice was taken away from them by the legislature. Yes, saving for retirement does make sense, yet many folks these days have to choose between putting food on the table for their family and contributing to their retirement. The Legislature has made that decision for public employees.

This income tax on our teachers, law-enforcement officers, firefighters and others who provide vital public services that help everyone in the state, comes after years with little or no raises. They are faithfully performing their duties and helping all Floridians despite the fact that they are struggling to make ends meet. Like far too many of us, they feel the American dream slipping away. It’s sad that our elected officials who areworking against us, not helping the people of our state hang on to the American dream.

 

What is this lawsuit about?

 When the Legislature mandated that active members of the Florida Retirement System must give up 3 percent of their salary as “contributions” to their retirement benefits, they impaired a contractual agreement with current employees in violation of the Florida Constitution. The Florida Retirement System is set up as a noncontributory plan and making unilateral plan changes violates the contract with employees.

 FEA is also challenging the reduction in the cost-of-living adjustments for those retiring after July 1. Florida law requires a 3 percent cost-of-living increase during retirement regardless of years of service or dates of service. The changes made in Senate Bill 2100 violate this contract with current state employees in the Florida Retirement System and constitutes taking private property without full compensation.

Why is FEA filing this lawsuit?

   These salary cuts – essentially an income tax levied only on workers belonging to the Florida Retirement System – compound the losses experienced by teachers and other public school employees. Over the past four years, they have seen no raises or minuscule raises, increased health insurance costs and layoffs. The stark budget cuts pushed by Gov. Rick Scott and the Legislature will only deepen those losses. The loss of 3 percent of their salary is pouring salt into their wounds.

   Teachers and other school employees entered into public service with few promises, but one was the security of their retirement. The action by the leadership of the Legislature and Gov. Rick Scott rips apart and dashes that promise. They chose this irresponsible, reckless and unconstitutional way of balancing the budget instead of properly addressing the shortfall.

What will happen to my 3% contribution?

   That will be decided by the court, but FEA is asking that all salary money collected from employees while this case is being heard be placed in an escrow account. If it goes into the Florida Retirement System, it may not be recoverable. By putting it into a segregated account, salary money can be returned to employees if our side prevails.

What are the potential consequences of the lawsuit?

   We have undertaken this effort fully realizing that legislative leaders may try to exact retribution. After all, this past session FEA was fully in their crosshairs with the profession-destroying SB 736, massive budget cuts to public education and a spate of bills designed to put our union, and other public-sector unions, out of business. Nevertheless, the importance of protecting the constitutional rights of our members trumps the fears of legislative payback.

What will happen to the 2011-2012 state budget?

   Legislative leaders have a number of avenues that they can use to address any budget shortfall – such as closing sales-tax loopholes, aggressively collecting sales tax on Internet sales, or repealing the tax breaks for investors and corporations. Those tax breaks were widely touted as ways to create jobs and grow the state’s economy, but after billions and billions of dollars worth of tax breaks over the past 12 years under Republican leadership, Florida has one of the highest unemployment rates and its economy is one of the weakest in the nation.