NEA-NM joined AFSME, AFT and CWA in filing a law suit on June 15th, 2009 in the Second Judicial District in Albuquerque for violations of numerous constitutional rights of public employee pensioners by enacting a 1.5 percent increase in employees' pension contributions. The legal papers present the argument that the increase violates pensioners' constitutional rights of actuarial soundness, uniform taxation, due process, equal protection and vested property rights.
The pension contribution swap, enacted by House Bill 854, balances the state's budget by making employees pay 1.5 percent for two years. The law, which will start July 1, reduces what the state pays into public pensioners' funds by 1.5 percent. The law increases payroll taxes on teachers and other public employees by the same amount to cover the cost of the state's two-year holiday on pension payments.
The contribution change will apply to employees covered by the Public Employees Retirement Association (PERA) and the Educational Retirement Board's (ERB) pension for education employees.
The legal papers argue that the changes impose an unfair wage tax on a select group of individuals --in particular, public employees-- to enhance the general revenues of the state. The state is not imposing any sort of contribution from private employees to shore up the state's budget deficit.
During the 2009 legislative session, the unions proposed numerous revenue alternatives to close the budget gap, but all ideas were turned down by lawmakers in favor of the 1.5 percent payroll tax. Also championed was a concept called combined reporting which would have brought in new revenues while leveling the field of local businesses.
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