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South Carolina Public Workers Challenge Budget Board Health Premiums Decision

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COLUMBIA, S.C. (AP) — The leaders of groups representing teachers and state employees asked the South Carolina Supreme Court on Wednesday to take up its lawsuit against a panel led by Gov. Nikki Haley, whom critics accuse of voting against employees to score political points ahead of her speech at the Republican National Convention.

The lawsuit challenges the Budget and Control Board’s decision last week to raise health insurance premiums for public workers despite lawmakers agreeing to foot the bill in the state budget. It is the second such lawsuit. A University of South Carolina professor filed a class-action lawsuit Monday in Richland County court.

The latest suit represents two teachers who are officials in the South Carolina Education Association, as well as the executive director of the State Employees Association.

Their attorney, Allen Nickles, asked the state’s high court to hear the case directly, rather than start in the lower courts. He believes that provides the best opportunity for the case to be resolved before the hikes take effect Jan. 1.

“This is a matter of constitutional law,” Nickles said. “The Supreme Court is the final authority on constitutional law.”

He did not seek class-action status, saying that’s unnecessary. If the board’s vote is deemed invalid, the ruling would automatically apply to the more than 234,000 public workers and retirees who have health insurancethrough the state health plan, he said. A total of 415,310 residents are covered through the plan, when including spouses and children.

Haley, chairwoman of the five-member board, convinced a majority last week to disregard the budget and split the cost of the hikes between employers and workers. The board voted 3-2 to raise rates on both by 4.6%.

“We have every intention of defending and winning this case,” said Haley’s spokesman, Rob Godfrey.

Lawmakers agreed to fully cover the premium hikes as part of a larger compromise on worker pay.

After four years with no raise, legislators wanted to provide workers a noticeable increase in their paychecks in a year that economic advisers predicted more than $1 billion in additional revenue, compared to 2011-12. The final budget increased most state workers’ salaries by 3%, but also required them to contribute more toward their retirement. It also distributed the necessary $20.6 million to agencies, school districts and public colleges to fully cover premium hikes.

The executive director of the SCEA, Roger Smith, said the action seems to be an attempt by Haley to appeal to Tea Party activists by attacking public employees, in a state that lacks public unions.

Haley never misses an opportunity to bash unions, calling the state’s low union membership rates an economic development tool. Earlier this year, Haley traveled to Wisconsin to help Gov. Scott Walker win his fight with public employees’ unions — a fight that made him a GOP star. But in South Carolina, public workers are banned from collectively bargaining. Associations that represent public workers are essentially advocacy groups.

“The governor seems determined to aggressively climb the political career ladder at the expense of teachers and school employees,” said Jackie Hicks, president of the SCEA and one of the three groups suing.

Haley’s spokesman said that’s ridiculous.

“All we’ve asked is that state employees share in the cost of their health insurance spike with the taxpayers of this state — there’s nothing unreasonable, unwarranted, or political about it,” Godfrey said.

The board’s stunning move not only upset public workers, but infuriated legislators of both parties. In the past, the board’s vote to set the rates was considered procedural. House Speaker Bobby Harrell, R-Charleston, predicted last week the board would be sued — and lose. Senate President Pro Tem John Courson, R-Columbia, was among a group of senators calling on the board to meet again and take back the vote.

Godfrey said that, while legislators designated the money, the budget doesn’t specifically set the premium rates.

That “means their argument must boil down to the idea that because the Legislature appropriated the money we were then required to spend it,” he said. “That mentality is exactly what is wrong with government.”

On average, agencies would pay an extra $19 monthly, while employees and retirees would pay $7 more. Specific amounts by plan are not yet determined.

Critics of both parties have noted Haley made the surprise request despite not touching the raises or premiums in her line-item budget vetoes. Nickles’ lawsuit says the vote was effectively an administrative veto that circumvents the legislative process.

Godfrey said Haley didn’t veto the premium coverage because that would have put the full cost of premium hikes on employees, and she wanted a split.

Such a veto likely would have been overturned.

The vote to split the increase leaves a $5.8 million surplus. There’s no mechanism for it to directly benefit taxpayers. It would mark the second consecutive year that premium hikes were split between agencies and workers.

The president of the South Carolina Association of Taxpayers said Haley, Treasurer Curtis Loftis and Comptroller General Richard Eckstrom did the right thing by standing up for taxpayers. Public workers will still see an increase in their paychecks, Don Weaver said.

He said he’s worried that employee lobbying associations will continue to ask the Legislature to fully fund premium hikes as long as state revenues are increasing.

“It gets to be a precedent,” he said. “That’s what we’re more concerned about.”