From Deseret News archives:
State says sick-leave policy not in contract
"At its core, plaintiff's appeal is a sympathetic and emotional one," the state argues in its brief filed with the high court Thursday. "They do not agree with the decision of the Legislature to modify the terms of the program, and they ask this court to substitute its judgment for legislative policy under the rubric of a takings claim." The state argues that the Utah Public Employees Association can't claim that changing how sick leave is used upon retirement violates a contract when no contract exists.
"No matter how sympathetic an employee's unilateral expectation is that the same benefits will be available when he retires, no amount of emotional appeal can transmute that expectation into a legal right," the state argues.
The brief responds to claims by the UPEA and five state workers that HB213, which was passed as a cost-saving measure by the 2005 Legislature, represents an unconstitutional "taking" of employee property.
Currently, employees can exchange one day of unused sick leave for a month of state-paid medical insurance when they retire. Lawmakers wanted to change that in passing HB213, which allows workers to get a dollar-for-dollar exchange for unused sick days and also requires employees to cash out one-quarter of their saved sick leave and put it in their 401(k) retirement savings plan.
UPEA challenged the change in district court and lost, but it won an emergency stay from the Utah Supreme Court for the law's Jan. 1, 2006 enactment date.
The state argues in its latest legal document that putting the first quarter of accumulated sick leave into the 401(k) "is an important and beneficial change" because it "eliminates the potential constructive tax liabilities created by the existing program."
The state also argues that the law now lets workers potentially buy the same amount of health insurance without a potential tax liability, especially those who retire after age 60 who under the new law may end up with more health insurance than under the past program.
Both sides agree that the law was passed to save the state money.
The state notes in its brief that the Legislature became concerned with mushrooming health insurance costs for retirees which went from about $8.8 million in fiscal year 2001 to $15.8 million in fiscal year 2005.
Oral arguments in the case before the Utah Supreme Court will be Tuesday.
E-mail: lindat@desnews.com
