Court fees may rise to bolster pensions

It may cost Arizonans more to use the state’s court system, after a House panel Monday voted to increase judicial fees to prop up the severely underfunded pension fund for politicians and judges.

HB 2564 raises 55 Superior Court and 15 justice base court fees, while slightly cutting the distribution formulas for domestic-violence services, child-abuse prevention and county general services.

If the legislation becomes law, it will cost a bit more to file for divorce, obtain a power of attorney or file a subpoena. Fees will increase from $2 to $18, depending on the court service. For example, an application for probate court will increase to $149 from $131.

The House Banking and Insurance Committee approved HB 2564 in a 7-1 vote.

The legislation is projected to raise up to $2.5 million for the Elected Officials’ Retirement Plan, according to Jerry Landau, the government affairs director for the state Supreme Court and a supporter of the bill.

Landau said while the distribution formula is being lowered for social services they should receive the same amount of money because the fees will be higher and they will be “held harmless.”

A portion of court fees have historically been used to help fund the pension plan, as $8.6 million was brought in last year.

Rep. Eddie Farnsworth, R-Gilbert, cast the lone no vote. He said the legislation amounted to trying to fix a funding problem with hidden taxes. The Legislature needs to make a comprehensive fix that includes asking voters to change the state Constitution, which prohibits state public pension benefits from being cut.

A majority of funding for the pension plan comes from government employers (taxpayers); elected officials contribute a portion of their pay, 13 percent, toward their pension benefits. Pension officials have said the

amount coming from government employers — 23.5 percent of an employee’s pay — is not enough to keep the system afloat.

Lawmakers also are considering raising contributions from employers to about 61 percent, though a bill to do that failed Monday. That legislation likely is to be reintroduced.

The pension system for politicians and judges is managed by the Public Safety Personnel Retirement System, which also oversees pensions for correctional officers.

The EORP fund is in danger of going bankrupt in less than 10 years because of generous benefits, poor investment returns, court rulings and legislative decisions to close the plan to new enrollees. A Maricopa County judge last year ordered the Legislature to significantly increase funding for EORP. Superior Court Judge Timothy Thomason did not tell the Legislature how, specifically, to fix the shortfall but he advised that payments from public employers would need to nearly double or lawmakers would need to pump an additional $43 million a year into the trust from the general fund.

Rep. David Livingston, R-Peoria, sponsored the legislation to raise court fees. He said he’s trying to fix the problem, otherwise the system will go broke and the state will face lawsuits from retirees. EORP only has about 33 cents for every dollar needed to pay the benefits of those collecting a pension and those who qualify.

The average EORP pension last year was $53,088, according to system records. That’s up 41 percent from 2008.