Is a pension liability a debt?
That’s one of the central questions that Orange County Supervisors want the state’s Supreme Court to answer soon.
On Monday, county officials filed their formal petition to the state’s highest court, seeking to reverse two major losses from lower courts that have answered the county’s question by saying, “No.”
Supervisors argue that when their former colleagues expanded pension benefits retroactively – worth about $187 million according to actuaries – in 2002, they violated the state constitution because they didn’t seek a vote of the people.
Yet lower courts have consistently ruled that a pension liability doesn’t meet the constitutional requirements for a popular vote.
County officials have now spent just over $2.5 million their lawsuit. The Association of Orange County Deputy Sheriff’s has consistently criticized the supervisors’ action saying it’s a long, long shot and does nothing but waste money and time.
Supervisors, led by John Moorlach, in turn have argued that such legal challenges are critically important if taxpayers are to bring massive unfunded liabilities under control. They expect the Supreme Court will be more comfortable in issuing a decision that could unwind pension deals up and down the state.
The Deputy Sherriff’s union, however, says the only thing that will soon unwind is the supervisors’ legal adventure.
The deputy’s union now has 20 days to respond to the supervisors’ legal arguments. After that, the deputies get another 10 days to respond to that and then that’s it.
The State Supreme Court will have 90 days to issue a decision.
In the meantime, we’ve included the county’s brief for review.