December 7, 2012

What's At Stake in the Pension Lawsuit

Carroll Andrew Morse

Here is what is at stake in the lawsuit to void Rhode Island's 2011 pension reform law, Rhode Island Public Employee's Coalition et al. vs Chafee et al., being litigated in Judge Sarah Taft-Carter's courtroom today. The state's public employee unions are asserting a right to veto legislation that impacts their direct economic interests, i.e. there are certain acts approved by the legislature and the governor regarding expenditures of public funds that cannot become law without their express approval.

This veto differs from a gubernatorial veto in two significant ways. First, the Governor's veto can be overridden by the legislature; the unions would allow no one to override their veto. Second, the Governor's veto is expressly provided for in the state constitution. The unions do not believe an express constitutional provision is needed to establish their veto. They claim it is fundamental to their being.

The unions are also asserting exemption from certain laws already on the books. Rhode Island law is explicit that state employee retirement shall not be an object of collective bargaining. The exact language is "Any and all matters relating to the employees' retirement system of the state of Rhode Island are excluded as negotiable items in the collective bargaining process". Despite the plain wording of the law, in place long before 2011, the unions are demanding that their retirement benefits be negotiated through collective bargaining. Rhode Island law also states that municipal employee and teacher contracts (though not those of state employees) are limited to three years, while the union lawsuit is premised on the idea that post-retirement benefit raises are guaranteed by "implied" contracts that can literally last a lifetime. Lifetimes are longer than three years.

* * *

Ultimately, the courts in Rhode Island Public Employee's Coalition et al. vs Chafee et al. are being asked to decide whether the modern government appropriations process was scrapped when public sector collective bargaining was enacted in RI. Upon what principles the government appropriations process is based, and why people should be expected to go along with it are important questions to ask -- and to convincingly answer. Fail to acknowledge the question, and what remains is a system where people are expected to give stuff up to whomever asks most vigorously, a system of might makes right. When answered prior to the democratic era of history, justifications generally centered on a belief that the people of the earth were divided into rulers and ruled, and that rulers needed permanent claim on the property of the citizens so rulers would have what they needed to provide an orderly society.

As the idea that all people were created equal advanced over the course of history, granting one group in society the power to lay permanent claims on another was no longer tenable. Equality couldn't be said to exist in such an asymmetric arrangement, and the direction of cause and effect was rightly called into question; maybe it was the acceptance of permanent claims by one group over the future livelihoods of others that promoted a permanent division of the world into ruling and ruled.

In response, specific limits on the government's power to compel appropriations were instituted. Decisions to appropriate from the citizenry were restricted to the elected representatives of the people. There would no direct involvement or special vetoes in the lawmaking process for any groups not accountable to the citizenry, be it appropriations or any other kind of law.

Appropriations were also limited in time. Since government was made up of humans, putting people into permanent debt to the government would mean putting people in permanent debt to others; this was not consistent with the idea of equality. So government was restricted to only being able to rightfully and legally take what it needed to keep running for a limited time, until the next appropriations period, which would not be significantly longer than the interval until the next election, when a new set of decisions could be made, and accountable representatives of the people could decide whether more needed to be done or less needed to be taken. It is in this spirit that laws prohibiting contracts for arbitrarily long time periods were enacted.

These are the fundamental issues lying at the heart of Rhode Island Public Employee's Coalition et al. vs Chafee et al. Here in a place once known for a certain democratic radicalism, the plaintiffs want Judge Taft-Carter to decree that certain features of modern democracy have run their course, that collective bargaining law requires government to return to an older practice of allowing certain groups to lay permanent claims on the livelihoods of others, and that these special groups should be allowed to enforce their claims through a veto over the elected representatives of the citizenry. That is a lot to ask for.

Comments, although monitored, are not necessarily representative of the views Anchor Rising's contributors or approved by them. We reserve the right to delete or modify comments for any reason.

The idea that a Sovereign state is bound forevermore by the actions of a single legislative session is absurd.
What if a Pat Crowley dominated body voted million dollar annual pensions for every public employee. Would future legislatures be bound by this in perpetuity?

Posted by: Tommy Cranston at December 7, 2012 1:26 PM

This is more of a philosophical post, but philosophy is important. As a legal matter, it's difficult to make the case that pension benefits are not contractual obligations. They are expressly provided in exchange for services rendered by the employees. However, the philosophical points you bring up are relevant when considering whether such contracts are unconscionably excessive and whether they may be modified by the state when there is a compelling public interest. "A promise is a promise" is a particularly silly moral high ground for the unions to claim in light of their questionable history of hijacking the political system through quid-pro-quo campaign contributions and engaging in all manner of egregious employment abuses. If contract law was really just a matter of holding people to agreements according to the literal terms, then we wouldn't need contract statutes, professors, case law, attorneys, or even judges - we could just feed the terms into a computer. Reasonable minds understand that this is not justice and sometimes promises can and should be modified.

Posted by: Dan at December 7, 2012 1:33 PM

If "a promise is a promise" is enforceable than I demand the "temporary" income tax end and that the "temporary" sales tax jump from 1% to 6% in the sixties be honored.

Posted by: Tommy Cranston at December 7, 2012 8:41 PM


Just like any other organization (assuming a non-absolutist regime), government cannot contract to transfer away what it does not own, and government does not own its citizens, their futures, or even a "reasonable" (as determined by the government, of course) slice of their future incomes. Government only owns what it acquires through a constitutionally valid, time-limited appropriations process, and contracts cannot be used to end-run this fundamental limit.

Posted by: Andrew at December 8, 2012 4:05 PM

Andrew - I'm philosophically sympathetic to your argument, but as a legal matter, government owns its future revenue, may contract with other entities based on this projected revenue, and has the right to tax its citizenry to that end. The argument that "government doesn't own people or their future incomes" would prohibit government from entering into any financial contractual agreements if taken to its logical conclusion. Now you are right in the sense that the state government can't force you to stay and pay such taxes, which is why I have been urging everyone on this blog to leave the state for the past three years (with limited success).

Posted by: Dan at December 8, 2012 5:08 PM

The argument that the only way government can function is if it is made owner of everything isn't very convincing. We had that fight several centuries ago, and decided government could go on, in the absence of a sovereign who owned the kingdom. Government and society did alright for at least 300 years or so after that, and the modern government appropriations process that replaced absolutist government is still alive and well, and is the basis (at least at the Federal level) of things like the strong presumptions in favor of 1-year (or 1-year optionable at a time) deals in Federal contracting, the government reserving strong termination for convenience powers for itself, and the Antideficiency Act.

What this really all means is that people and organizations who want to make deals with government have to take into account more than the existence of the authority to tax if they expect government to fulfill its end of the deal (e.g. will people making future appropriations decisions want to pay how much they're being charged, for what they're being provided). Unfortunately, all of this time spent on resolving "we're taking ours, try and stop us" is getting in the way of finding truly mutually beneficial arrangements.

Posted by: Andrew at December 8, 2012 7:28 PM
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