In a major victory for the state, the Florida Supreme Court ruled 5-2 against state workers and allowed the state to retain the 3 percent levy on worker salaries to offset the state's investment into the Florida Retirement System.
The ruling allows lawmakers to avoid another $2 billion budget hole next year and state workers will see their salary cuts retained indefinitely. The lawsuit, Scott v. Williams, was filed by the Florida Education Association after lawmakers passed, and Gov. Rick Scott signed to tap salaries of 623,000 government worker.
Lawmakers argued at the time that the change was needed to fill a $3.6 billion budget gap and bring Florida in line with 47 states that require their government workers to contribute to their pension plans. The savings was then plowed back into the budget, not into the retirement fund.
The Supreme Court overturned a ruling by Leon County Circuit Court Judge Jackie Fulford, who ruled in 2012 that the pension changes were unconstitutional because they impaired the contractual rights of the FRS employees, took private property without full compensation and impaired employee collective bargaining rights. She ordered the state to halt the practice and reimburse workers with interest.
Attorney General Pam Bondi and Republican legislative leaders immediately challenged the ruling and continued collecting money from employee payments. It is now up to the court to decide but a decision could take months.
If the seven justices had upheld the lower court ruling, state and local governments would have to reimburse active workers in the Florida Retirement System and cover the resulting hole in their budgets. The state has already taken more than $900 million from employees and are expected to take up to $2 billion by June 30, 2013, the end of the states current fiscal year. State economists have predicted that revenues appear to be meeting expectations and, for the first time in years, legislators may not face another year of belt tightening.