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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, December 7, 2012

The Retroactive Removal of Public Pension Tax Exemptions

Raven Merlau (J.D. 2013, George Mason), Comment, The State Giveth and the State Taketh: Constitutional Pension Protections and the Retroactive Removal of Public Pension Tax Exemptions, 19 Geo. Mason L. Rev. 1229 (2012):

This Comment analyzes the constitutionality of repealing tax exemptions for public pensions in states where constitutional amendments treat pension benefits as contractual obligations. It proceeds in four parts. Part I briefly traces the historical and legal background concerning the protection of public pensions, including the history of public pensions and the rise of state constitutional amendments protecting them. Part II then describes the move by states to repeal tax exemptions immediately following the U.S. Supreme Court's 1989 decision in Davis. In so doing, it analyzes both Herrick and the cases that followed it. Part III discusses attempts by states with constitutional pension provisions to repeal tax exemptions after Davis, including Michigan's recent success. Part IV then critiques the reasoning of Herrick by arguing that there is no legal distinction between reducing the corpus of a pension payment and eliminating a tax exemption. This Comment concludes that states with constitutional amendments making pension benefits contractual obligations should not follow Herrick or the lead of Michigan.

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