Opinion ID: 1203735
Heading Depth: 3
Heading Rank: 4

Heading: Violation of State Recognized Property Rights

Text: We find in our State Constitution protection for the public pension participants independent from the federal constitution's contract clause. We have already noted our State's Constitution contains its own impairment of contracts clause. W.Va. Const. art. III, § 4. West Virginia's organic law also provides for compensation when private property is taken for public use, W.Va. Const. art. III, § 9, and due process of law when a person is deprived of property rights, W.Va. Const. art. III, § 10. Our analysis of the rights affirmed by each of these state constitutional sections includes consideration of applicable federal constitutional standards, [u]ltimately, however, we must be guided by our own principles in establishing our State standards, recognizing that so long as we do not fall short of the federal standard our determination is final. Waite, 161 W.Va. at 158-59, 241 S.E.2d at 167. We have firmly established that our State's due process clause, W.Va. Const. art. III, § 10, may, in certain instances, require higher standards of protection than afforded by the federal constitution. Syl.Pt. 1, State v. Bonham, ___ W.Va. ___, 317 S.E.2d 501 (1984) ( quoting Syl.Pt. 2, Pauley v. Kelly, 162 W.Va. 672, 255 S.E.2d 859 (1979). We have also held that inherent in article three, section ten of our Constitution is the concept of substantive due process and that due process protections extend to any significant property interest. Don S. Co. v. Roach, 168 W.Va. 605, 285 S.E.2d 491 (1981). We have already reconfirmed today that our Constitution insures that the people will receive the benefit of legislative enactments. Syl.Pt. 1, Cooper v. Gwinn, ___ W.Va. ___, 298 S.E.2d 781. State law, through the pension statute, establishes contractually based property rights in pension plan participants who have contributed from their wages and have earned the contributions of their employers. Wagoner v. Gainer, 167 W.Va. 139, 279 S.E.2d 636; see Campbell v. Kelly, 157 W.Va. 453, 202 S.E.2d 369. These rights are recognized and protected under our State's Constitution. W.Va. Const. art. III, §§ 4, 9, 10. Thus, the realization and protection of public employees' pension property rights is a constitutional obligation of the State. The State cannot divest the plan participants of their rights except by due process, although prospective modifications which do not run afoul of the federal or State impairment clauses are possible. We understand that the Governor and the Legislature are anxious to avoid difficult choices in raising revenues or cutting expenditures. Nevertheless, the diversion of earned pension trust fund contributions to the State's general revenue fund amounts to little more than an end-run around the constitutional requirement for a balanced budget, W.Va. Const. art. VI, § 51, and deficit financing of state government from earned savings of public employees. The State has a contract with PERS members and retirants, who have earned the employers' contribution due the PERS trust, and it is not proper for the State to unilaterally modify that contract to the detriment of the participants, see Wagoner v. Gainer, 167 W.Va. 139, 279 S.E.2d 636, and it is fundamental that any modifications must comport with our State's stringent due process requirements, W.Va. Const. art. III, § 10. The State has promised certain pension rights to public employees as a part of their compensation for services rendered. The PERS has grown with earned contributions of employee and employer alike, held in trust. The amount of employer contributions earned by State employees which have been wrongfully withheld or diverted over the past four years is a public debt, which must be repaid. The payment of statutorily promised pension benefits, on maturity, is a general and moral obligation of the State. We would be faithless to our constitutional duties to allow a raid on the PERS trust for purposes of political expediency, forcing future officials to place a heavy tax burden on posterity to pay for today's profligacy. As an initial measure, the diversion of retirement funds from special revenue accounts must cease immediately. The Respondent Trustees are hereby mandated to engage an independent actuary to conduct an audit and study to determine pursuant to W.Va.Code, 5-10-31, whether the System has been rendered actuarially unsound through the underfunding of the past four years. If it is determined that the System is actuarially unsound, then the Respondent Trustees must develop an appropriation plan which will return the System to actuarial soundness. The audit, study, and appropriation plan are to be completed within one hundred eighty (180) days of the issuance of this opinion on rehearing. The amount specified in the appropriation plan to bring the System to actuarial soundness is to be included each year in the Respondent Trustees' certificate to the Governor along with the annual amount required pursuant to W.Va.Code § 5-10-32(a). The extra payment required by the appropriation plan shall not be prorated over more than six budget years beginning with fiscal year 1990-91. The Respondent Governor and Commissioner and their successors are hereby mandated to include the extra appropriation as well as the regular appropriation under W.Va.Code § 5-10-32, in their proposed budget beginning with fiscal year 1990-91.