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Lamb McErlane PC Representing PA Representatives in Case against Governor Wolf Regarding Dissolution of the Public Employees Retirement Commission (PERC)

Two Pennsylvania representatives are suing Gov. Tom Wolf in Commonwealth Court over his discontinuation of the Public Employees Retirement Commission. Their suit makes a familiar claim regarding Wolf’s actions—that he exceeded his authority as governor.

Rep. Stephen Bloom, R-Cumberland, and Rep. Seth Grove, R-York, filed a petition for review and application for special relief Feb. 12 in the Commonwealth Court. They are seeking an injunction on Wolf’s alleged dissolution of PERC, which resulted from Wolf’s line item veto of an appropriation for PERC in the General Appropriations Act of 2015.

PERC has been tasked with reviewing proposed pension reform legislation and reviewing Pennsylvania’s municipal pension plans. The representatives contend it was created to “meet the need for a completely independent state and local pension review agency.”

In an answer to the suit, Wolf has said that was not the plainly stated intent of the law creating PERC. He said the commission’s functions can still be fulfilled. Bloom and Grove have alleged that Wolf violated the legislation that enabled PERC, as well as the separation of powers principles in the Pennsylvania Constitution. Taking that action requires a change to state statutes, the representatives said. Joel L. Frank, John J. Cunningham, Scot R. Withers and Mary-Ellen Allen of Lamb McErlane are representing them.

“The governor should not be allowed to artificially interfere with the democratic process by fiat,” Bloom and Grove said in a statement. “We have and will continue to fight for the taxpayers of Pennsylvania from the governor’s habitual abuse of executive authority.”

In an application for special relief, the representatives said Wolf’s “violation” caused harm by interfering with the legislative process. But in an answer to the petition, Wolf’s attorneys said his administration has created a way for PERC’s core functions and mandated duties to be fulfilled without an appropriation for the commission. PERC has not been decommissioned or dissolved, the answer said, but an interagency agreement has been put in place.

“As we have said, the governor has acted to eliminate redundant and unnecessary functions and cost,” a spokesman for Wolf said in a statement. “It is unfortunate that despite their rhetoric, some in the legislature have opposed nearly every step the Wolf administration has taken to reduce the size of government and curb costs including his actions on PERC, as well as reducing fees paid to Wall Street pension management firms and the merging of the Department of Corrections and Probation and Parole.”

According to the petition for review, Wolf received an appropriations bill in late December, and vetoed the entire appropriation for PERC for the 2015-16 fiscal year. Then on Feb. 3, Wolf’s chief of staff sent a letter to PERC chair John Durbin, mandating that the commission take steps to immediately discontinue operations.

The petition noted that before Wolf’s line-item veto, PERC had been operating without an appropriation because a state budget had not passed. “During the budget impasse, PERC nonetheless continued to perform all of its statutory duties enumerated under the Public Employee Retirement Commission Act and Gov. Wolf authorized the continued payment of the salaries of PERC’s employees,” the petition said.

The filing said PERC’s duties and employees were being dispersed to other agencies, and that Durbin has relinquished the duties and functions of the commission to the Pennsylvania Office of the Budget. The commission was discontinued six weeks before the state’s municipalities were scheduled to give biannual reports to PERC, the petition said. Those reports are used to allocate $250 million in state pension aid to municipalities.

In his answer, Wolf said those reports will be taken care of by the Office of the Budget.

Wolf acknowledged that three PERC employees were hired at the Office of the Budget. But they are still carrying out the same municipal pension review and certification duties. The change of employer only took place because of the constitutional provision that requires an appropriation for public funds to be spent.

Additionally, the application for special relief said Wolf’s action could severely delay any pension legislation. Any bill amendment that proposes a change to a public employee pension or retirement plan must be submitted to PERC, it explained, and the amendment cannot be considered until PERC responds with an actuarial note, or after 20 legislative days.

“The General Assembly already has been affected by Governor Wolf’s self-created emergency, which will effectively stop or at least unduly delay future pension legislation from moving forward,” the representatives said.

Wolf’s answer denied that assertion as speculative. It said the General Assembly has a path forward for pension legislation without an actuarial note from PERC. It also said the issue may be resolved by enacting legislation to provide supplemental funding for PERC, or by amending the Public Employee Retirement Commission Act to shorten the 20-day delay for legislation without an actuarial note.

Wolf said the injunction being sought would be destructive because the three PERC employees who were transferred to the Office of the Budget would not be able to get paid or perform their duties.

The representatives’ petition said PERC’s role in assessing pension legislation “is a crucial and deliberate check and balance in the legislative process.”

Wolf, however, argued that PERC’s functions “have nothing do to with checks and balances in the legislative process.”

Lizzy McLellan can be contacted at 215-557-2493 or lmclellan@alm.com. Follow her on Twitter @LizzyMcLellTLI. •

Read more: http://www.thelegalintelligencer.com/id=1202750177194/Wolf-Representatives-at-Odds-Over-Pension-Commission#ixzz416NmGhPB