Judge: City pension overhaul can stand

Unconstitutional portion of bill doesn't invalidate entire law, says judge

November 30, 2012|By Luke Broadwater, The Baltimore Sun

A court ruling that struck down a key provision of Baltimore Mayor Stephanie Rawlings-Blake's overhaul of the fire and police pension system will not dismantle the entire law, a federal judge ruled Friday.

"The Ordinance will not 'fall as a whole,' " wrote U.S. District Judge Marvin J. Garbis.

In September, Garbis held that the city's decision to change the method for determining annual increases for retirees — resulting in less money for many — was unconstitutional and not "reasonable and necessary to serve an important public purpose."

Fire and police union leaders called that ruling a major victory and argued that it invalidated the entire law. The provision was part of a 2010 law that also delayed retirement for many police and fire employees, and increased their contributions to the pension system.

But that portion of the law can be severed from the rest of the legislation, Garbis ruled Friday.

"The City is very pleased with Judge Garbis' latest ruling as it makes clear that all of the pension reform effort is constitutional with the one exception, in his view, of the 'tiered' post-retirement benefit provision," said Ryan O'Doherty, a spokesman for Rawlings-Blake. "The earlier claim by the plaintiff's lawyer that this single perceived defect invalidated the entire law turned out to be flat wrong."

The administration still considers the contested provision to be constitutional.

Charles O. Monk, an attorney for the police and fire unions, said he was disappointed by the judge's ruling.

When Rawlings-Blake introduced the pension overhaul in 2010, she said it would head off an imminent fiscal crisis, saving the city at least $64 million a year. She frequently cites it as an example of a tough decision she was forced to make to keep the struggling city solvent. Predecessors in the mayor's office, Rawlings-Blake has said, had "kicked the can" on the pension problem.

The fire and police union launched a public attack on the mayor and her City Council supporters, picketing City Hall and posting billboards accusing elected leaders of turning their backs on public safety workers. A battle ensued as both the administration and the unions lobbied council members, but the council eventually backed the mayor's plan.

Under the plan, firefighters and police officers have been required to increase contributions to the pension fund. Those who had worked for the city for fewer than 15 years were told they would no longer be able to retire after 20 years, but would have to work for five additional years. Retired workers also lost what was called the "variable benefit," an annual increase tied to the stock market. Instead, the youngest retirees received no annual increase, and older retirees received a 1 percent or 2 percent annual increase.

Both sides are likely to appeal the case to the 4th U.S. Circuit Court of Appeals in Richmond, Va.

"Only then will we know what the final outcome of this will be," Monk said.



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