Full opinion text
Opinion CLARK, J. Defendants, Controller of the State of California and Auditor-Controller of the County of Los Angeles, appeal from judgment declaring unconstitutional 1976 legislation purporting to place a limit on cost-of-living increases previously provided for judicial salaries. The statute as amended was held unconstitutional by the superior court on grounds it constitutes an impermissible impairment of vested contractual rights (U.S. Const., art. I, § 10; Cal. Const., art. I, § 9) and conflicts with California Constitution, article III, section 4. Defendants contend that placing a limit on current provisions providing for cost-of-living increases to judicial salaries does not impair the vested or contractual rights of judges in office or of judicial pensioners. Additionally, defendants contend that the amendment to section 68203 does not reduce judicial salaries in violation of Proposition 6. We reject defendants’ contentions and affirm in part the judgment of the superior court. In amending section 68203 the Legislature attempted in effect first to maintain judicial salaries at the 1 September 1976 level for 22 months, and then to limit prospective increases beginning on 1 July 1978 to 5 percent regardless of the actual increase in the California Consumer Price Index (hereinafter CPI). (See fn. 1, ante.) Without the amendment judges would have been entitled to a 5.327 percent increase beginning on 1 September 1977. After the defendant Controller announced he would not pay such an increase, plaintiffs—judges in office and judicial pensioners—commenced this action for declaratory relief. Conflict of Interest We consider first whether we may hear and adjudicate the cause, recognizing each member of this court is financially interested in the outcome. The rule of necessity provides that a judge is not disqualified from adjudicating a cause because of personal financial interest if there is no other judge or court available to hear and resolve the cause. (See Atkins v. United States (1977) 556 F.2d 1028 [214 Ct.Cl. 118].) It is immediately apparent that all California judges have at least an involuntary financial interest in this case. To disqualify one would disqualify all, depriving them and their surviving spouses of opportunity to litigate their case. This court as now constituted is qualified to hear and determine the issues before us. Abridgment of Vested or Contractual Rights of Judges in Office We recognize the often quoted language that public employment is not held by contract and therefore is not protected by the contract clause. (Markman v. County of Los Angeles (1973) 35 Cal.App.3d 132, 134-135 [110 Cal.Rptr. 610]; see also Butterworth v. Boyd (1938) 12 Cal.2d 140, 150 [82 P.2d 434, 126 A.L.R. 838].) Those and other cases involve purported rights to remain in office or to continued public employment. On the other hand, we deal here with the right to compensation by persons serving their term of public office to which they have undisputed rights. “[P]ublic employment gives rise to certain obligations which are protected by the contract clause of the Constitution. ...” {Kern v. City of Long Beach (1947) 29 Cal. 2d 848, 852-853 [179 P.2d 799]; see also California League of City Employee Associations v. Palos Verdes Library Dist. (1978) 87 Cal.App.3d 135, 139 [150 Cal.Rptr. 739].) Promised compensation is one such protected right. {Sonoma County Organization of Public Employees v. County of Sonoma (1979) 23 Cal.3d 296, 308-309 [152 Cal.Rptr. 903, 591 P.2d 1].) Once vested, the right to compensation cannot be eliminated without unconstitutionally impairing the contract obligation. {Id., at p. 314.) When agreements of employment between the state and public employees have been adopted by governing bodies, such agreements are binding and constitutionally protected. {Sonoma County Organization of Public Employees v. County of Sonoma, supra, 23 Cal. 3d 296, 304, quoting from Glendale City Employees Assn., Inc. v. City of Glendale (1975) 15 Cal.3d 328, 337-338 [124 Cal.Rptr. 513, 540 P.2d 609].) In the instant case the Legislature in 1969 adopted the full cost-of-living increase provision, binding the state to pay persons employed at the represented compensation for their terms of office. Prior to the 1976 amendment judges had a vested right not only to their office for a certain term but also to an annual increase in salary equal to the full increase in the CPI during the prior calendar year. with the 1976 amendment the state purported to withdraw that right unilaterally thus impairing a vested interest. The question remaining is whether in the circumstances of this case the impairment is in some way permissible. In Sonoma County Organization of Public Employees v. County of Sonoma, supra, 23 Cal.3d 296 this court reiterated the four factors identified by the United States Supreme Court in Home Building and Loan Assn. v. Blaisdell (1934) 290 U.S. 398 [78 L.Ed. 413, 54 S.Ct. 231, 88 A.L.R. 1481] warranting legislative impairment of vested contract rights. Those factors are: (1) the enactment serves to protect basic interests of society, (2) there is an emergency justification for the enactment, (3) the enactment is appropriate for the emergency, and (4) the enactment is designed as a temporary measure, during which time the vested contract rights are not lost but merely deferred for a brief period, interest running during the temporary deferment. (23 Cal.3d at pp. 305-306.) In applying these standards the enactment’s severity must be measured to determine “the height of the hurdle the state legislation must clear.” (Allied Structural Steel Co. v. Spannaus (1978) 438 U.S. 234 [57 L.Ed.2d 727, 98 S.Ct. 2716].) This court stated in Sonoma County that impairing a granted increase in wages goes to the heart of the employment contract and is therefore severe and permanent. (Sonoma County Organization of Public Employees v. County of Sonoma, supra, 23 Cal.3d 296, 308-309.) Therefore the state’s hurdle in applying the four factors in the instant case is heightened because section 68203 is an impairment affecting the heart of the employment contract. Defendants, offering no reason or justification for the state action, fail even to approach their burden of demonstrating the impairment of plaintiffs’ rights is warranted by an “emergency” serving to protect a “basic interest of society.” A judge entering office is deemed to do so in consideration of—at least in part—salary benefits then offered by the state for that office. If salary benefits are diminished by the Legislature during a judge’s term, or during the unexpired term of a predecessor judge (see Cal. Const., art. VI, § 16; Gov. Code, §§ 71145, 71180), the judge is nevertheless entitled to the contracted-for benefits during the remainder of such term. The right to such benefit accrues to a judge who served during the period beginning 1 January 1970 to 1 January 1977, whether his term of office commenced prior to or during that time period. “An employee’s contractual pension expectations are measured by benefits which are in effect not only when employment commences, but which are thereafter conferred during the employee’s subsequent tenure.” (Betts v. Board of Administration, supra, 21 Cal.3d 859, 866.) A judge who completes one term during which he was entitled to unlimited cost-of-living increases and elects to enter a new term has impliedly agreed to be bound by salary benefits then offered by the state for the different term. Thus, while a judge is entitled to a salary based on unmodified Government Code section 68203 throughout a term ending, for instance, in 1978, his salary for a new term beginning on or after the effective date of the 1976 amendment—1 January 1977—will be governed by the statute as amended. Likewise, a judge entering office for the first time on or after 1 January 1977, including a judge entering upon his Own term or upon the unexpired term of a predecessor judge, cannot claim any benefit based on section 68203 before the 1976 amendment. As will be seen, our conclusions based on the contract clause as affecting salaries of judges in office are consistent with our conclusions regarding Proposition 6. Abridgement of Vested or Contractual Rights of Judicial Pensioners The 1976 amendment, in addition to impairing the vested rights of judges in office, also impairs those of judicial pensioners. A long line of this court’s decisions has reiterated the principle that a public employee’s pension rights are an integral element of compensation and a vested contractual right accruing upon acceptance of employment. (Betts v. Board of Administration, supra, 21 Cal.3d 859, 863; Kern v. City of Long Beach, supra, 29 Cal.2d 848, 852-853.) In Betts, this court held that a former state treasurer who had served in that office from 1959 to 1967 was entitled to a pension on the basis of the law in effect at the time of his termination rather than the modified law in effect at the time of his application for pension benefits in 1976. {Id., at pp. 867-868.) The statute in effect in 1976 purported to withdraw benefits to which he had earned a vested contractual right while employed. Although an employee does not obtain any “absolute right to fixed or specific benefits... there [are] strict limitations] on the conditions which may modify the pension system in effect during employment.” {Betts v. Board of Administration, supra, 21 Cal.3d 859, 863-864.) Such modifications must be reasonable and any “‘changes in a pension plan which result in disadvantage to employees should be accompanied by comparable new advantages.’” {Id., at p. 864.) Since no new comparable or offsetting benefit appeared in the modified plan, we held the 1976 statute unconstitutionally impaired the pensioner’s vested rights. In the present case the state has purported to modify pension rights with the amendment of section 68203. Between 31 December 1969 and 1 January 1977, a judicial pensioner was entitled to receive benefits based on a specified percentage of the salary of a judge holding the judicial office to which the retired or deceased judge was last elected or appointed. (Gov. Code, § 75000 et seq.) The salary for such a judicial office—if the retired or deceased judge served in office during the period 1970 to 1977—was convenanted to increase annually with the increase in the CPI. The 1976 limitation on increases in judicial salaries is, in turn, calculated to diminish benefits otherwise available to those judicial pensioners. Such modification of pension benefits works to the disadvantage of judicial pensioners by reducing potential pension increases, and provides no comparable new benefit. Again, we conclude that defendants have failed to demonstrate justification for impairing these rights or that comparable new advantages were included and that section 68203 as amended is unconstitutional as to certain judicial pensioners. Contractually, each judicial pensioner is entitled to some fixed percentage of the salary payable to the judge holding the particular judicial office to which the retired or deceased judge was last elected or appointed. (See e.g., Gov. Code, §§ 75032, 75033.5, 75060.6, 75076, 75077, 75091, 75093, 75094, 75096, 75096.1, 75096.3.) Accordingly, a judicial pensioner cannot claim impairment of a vested right arising out of the 1976 amendment except when the judge holding the particular judicial office could also claim such an impairment. The resolution of pensioner vested rights, then, is dependent on the foregoing resolution of judges’ vested rights left unimpaired by the 1976 amendment. Judicial pensioners whose benefits are based on judicial services terminating while section 68203 provided for unlimited cost-of-living increases in judicial salaries, acquired a vested right to a pension benefit based on some proportionate share of the salary of the judge or justice occupying the particular judicial office including the incumbent judge’s or justice’s unlimited cost-of-living increases. Judicial pensioners whose benefits are based on judicial services terminating before the effective date of applicable law providing for unlimited cost-of-living increases, have no vested right to benefits resulting therefrom. Legislation providing for unlimited cost-of-living increases was first enacted in 1964 to become effective on 1 January 1965, although the statute then provided for quadrennial increases based on a different index than the CPI. (Stats. 1964, First Ex. Sess., ch. 144, p. 518, § 4.) However, it is not necessary for our purposes to determine a judicial pensioner’s right as being vested. Vested or not, a pensioner’s right entitles him or her to benefits based on the prevailing salary for the judge or justice occupying the particular judicial office, regardless of the date of termination of judicial services giving rise to the pension. Finally, as in the case of judges or justices who enter upon a new or unexpired term of a predecessor judge after 31 December 1976, benefits of judicial pensioners based on the salaries of such judges will be governed by the 1976 amendment. Reduction of Judicial Salaries as a Violation of California Constitution, Article III, Section 4 Judges are state officers. (Cal. Const., art. VI, §§ 1, 16; see also Spreckles v. Graham (1924) 194 Cal. 516 [228 P. 1040].) Therefore, the prohibition against reducing state officers’ salaries includes judicial salaries. (See fn. 2, ante.) The word “salaries” in Proposition 6 (see fn. 2, ante) must bear the same meaning in both contexts in which it appears in that constitutional provision. (See Miller v. Dunn (1887) 72 Cal. 462, 466 [14 P. 27].) Legislative history demonstrates that the provision “[l]aws that set these salaries are appropriations” was drafted in 1972 to forestall the effect of a budgetary “line-item” veto. Such a veto could not effectively eliminate funding for an existing provision of law—such as judges’ salaries including a cost-of-living increase—when the statute is an appropriation. The word “salaries” in the last sentence of Proposition 6 is thus intended to mean cost-of-living salaries because the appropriating law then provided for annual cost-of-living adjustments. It follows that the provision in Proposition 6 that “[s]alaries of elected state officers may not be reduced during their term of office” forecloses during that term any limitation on cost-of-living increases even though such increases were first provided by the Legislature during that same term. To the extent that the 1976 amendment to Government Code section 68203 contemplates such limitations it is unconstitutional. Policies underlying Proposition 6 support our interpretation. The primary purpose of that constitutional provision is to “strengthen the independence of all three branches of the government,”including the judiciary. Security of both tenure and subsistence are important factors in creating and maintaining an independent judiciary. These factors are met by insuring relatively long, fixed terms of office (Cal. Const., art. VI, § 16; Gov. Code, § 71145) and foreclosing reduction in salary during term of office. Should the state arbitrarily limit the cost-of-living salary, the level of subsistence would be reduced. Defendants rely on Atkins v. United States (1977) 556 F.2d 1028 [214 Ct.Cl. 186]. Atkins involved a claim by federal judges that Congress unconstitutionally reduced salaries by refusing to increase salary levels in the face of continuing inflation. However, the federal judges, unlike plaintiff judges, did not have the benefit of a guaranteed statutory cost-of-living provision. Moreover, no action was ever taken to place a limitation on salaries already fixed by Congress. In contrast, the Legislature has provided California judges with a cost-of-living provision as part of their established salaries. Applicability . Having concluded the 1976 amendment to Government Code section 68203 infringes upon constitutionally protected rights when applied to some but not to all judges, it is apparent that if so applied salary disparity among peer judges will result. While it is established that the Legislature may create different salary levels for different officers or employees performing similar duties (see Gov. Code, § 18850 et seq.; Sevier v. Riley (1926) 198 Cal. 170 [244 P. 323]; Crawford v. Payne (1936) 12 Cal.App.2d 485 [55 P.2d 1240]), a further question arises whether an enactment which has immediate constitutional application in some instances but only prospective application in others, satisfies constitutional requirements. The issue raised is not one of severability in the usual sense. No part of the enactment is constitutionally infirm and therefore no question arises as to whether part of the enactment taints the remainder so as to render the whole a nullity. (See Santa Barbara Sch. Dist. v. Superior Court (1975) 13 Cal.3d 315, 330-335 [118 Cal.Rptr. 637, 530 P.2d 605]; In re Blaney (1947) 30 Cal.2d 643, 655 [184 P.2d 892].) Further, the amendment to section 68203 is incapable of mechanical severance and must survive, if at all, as a wholly integrated enactment. If it does so survive, then its application to particular judges during their protected terms of office must be deferred to the end of each such term. The issue presented has been dealt with by this court in similar factual situations. The court has concluded that when an enactment suffers from a temporary constitutional defect its applicability is merely delayed until such time as the constitutional bar ceases to exist. In Busch v. Turner (1945) 26 Cal.2d 817 [161 P.2d 456, 171 A.L.R. 1063], legislation increasing salaries of public officials was confronted with a constitutional provision precluding an increase in compensation during a term in office. Before the term of one such official had expired the constitutional provision was amended and implementing legislation was enacted removing the bar to an increase in the official’s compensation. This court held that the provision for increased compensation was merely held in abeyance as to that official during the period of the statute’s constitutional infirmity, to become applicable when the constitutional bar was removed. After referring to other decisions in which constitutionally inapplicable statutes were deferred until a change of circumstances permitted applicability, the court stated: “These decisions. .. represent a specific application of the general principle that statutes will be construed, if their language permits, so as to avoid unconstitutionality. The court [in those cases] thus held, in substance, that the Legislature intended the statutes to be operative at the earliest time the Constitution would permit, but not before.. . ‘The old law stands and controls the right to compensation until the time arrives at which, by the constitution, the new law is permitted to supersede it. . . .’” (Id., at p. 820; see also Regan v. County of San Mateo (1939) 14 Cal.2d 713 [97 P.2d 231]; Galeenerv. Honeycutt (1916) 173 Cal. 100 [159 P.2d 595]; Smith v. Mathews (1909) 155 Cal. 752 [103 P. 199]; Harrison v. Colgan (1905) 148 Cal. 69 [82 P. 674]; Kilroy v. Whitmore (1931) 115 Cal.App. 43 [300 P. 851]; Shay v. Roth (1923) 64 CaLApp. 314 [221 P. 967].) While the bar in Busch was removed by constitutional amendment and in the instant case the running of a judge’s protected term renders the amendment applicable as to him, “[t]he reason why the prohibition ceases to operate is entirely immaterial. ...” (Busch v. Turner, supra, 26 Cal.2d 817, 821.) This court concluded in Busch that there is “no constitutional objection” to a statutory interpretation giving prospective effect to a provision constitutionally inapplicable on the stated effective date. (Id., at pp. 821-822.) We adhere to the rule of construction in Busch and the cases on which it relies. No different rule is warranted where, as here, the enactment can be applied to different judges at different times. We conclude that the 1976 amendment to Government Code section 68203 fixes salaries of all judges—and benefits of judicial pensioners grounded on such salaries—except during completion of particular protected terms of office as defined above. In the absence of express legislative intent we should rely on the settled rule of construction presuming legislative intent. Thus in Busch it is stated without reference to actual legislative expression that the courts have “in substance” held that the Legislature intended statutes to be operative at the earliest time the Constitution would permit. {Id., at p. 820.) Presumed legislative intent follows in part from the recognized rule that statutes will be construed when possible to avoid unconstitutionality. The 1976 amendment is thus construed to avoid unconstitutionality by a presumed legislative intent that it be temporarily inapplicable to fix salaries of those judges to whom it cannot be constitutionally applied. The same rule of construction and presumed legislative intent is stated by this court in Smith v. Mathews, supra, 155 Cal. 752 to serve as “precedent for the construction of all future acts of the same character.” (Id., at p. 760.) Our presumption of legislative intent is bolstered by the further presumption that the Legislature in adopting the amendment to section 68203 was aware of the existing rule of construction making the amendment prospectively applicable in those instances of temporary constitutional infirmity. (See Bailey v. Superior Court (1977) 19 Cal.3d 970, 977 [140 Cal.Rptr. 669, 568 P.2d 394]; Bishop v. City of San Jose (1969) 1 Cal.3d 56, 65 [81 Cal.Rptr. 465, 460 P.2d 137],) Conclusion We conclude that Government Code section 68203 as amended in 1976, insofar as it would limit cost-of-living salary increases as provided by section 68203 before the 1976 amendment, cannot be constitutionally applied to (1) a judge or justice during any term of office, or unexpired term of office of a predecessor, if the judge or justice served some portion thereof (a “protected term”) prior to 1 January 1977, and (2) a judicial pensioner whose benefits are based on some proportionate amount of the salary of the judge or justice occupying that office. The salaries of judges and justices as fixed on 1 September 1976 constituted equal compensation for all judges and justices in a particular peer group (the “base salary”). (See Gov. Code, §§ 68200-68203.) Salaries for judges and justices never having served in a protected term are fixed by the legislative scheme to be at any time the 1976 base salaries increased annually by the percentage increase in the CPI not to exceed 5 percent, beginning on 1 July 1978 (the “statutory salary”). However, salaries for judges and justices while serving a protected term will be increased above the 1976 base on 1 September each year beginning 1977, by the percentage increase in the CPI for the prior calendar year. There will thus be a disparity in salaries within a peer group of judges or justices while any judge or justice within that group continues to serve a protected term. Such disparity will continue, in the case of trial judges, no later than the first Monday in January 1981 and, in the case of appellate justices, no later than the first Monday in January 1987. (Cal. Const., art. VI, § 5, subd. (a), § 16, subd. (a); Gov. Code, § 71145.) A judge or justice who completes a protected term and voluntarily embarks upon a new term can no longer claim to serve in a protected term, and his or her compensation will thereafter be governed by the provisions of section 68203 as amended in 1976. While that section speaks of annual increases in the salaries of “each justice or judge” by a percentage of the then current salary of “such justice or judge,” we do not deem this to mean that the salary of a judge or justice at the end of a protected term will be the salary at which the judge or justice commences a new, unprotected term should he or she succeed himself or herself. As stated {ante, pp. 544-545), section 68203 becomes fully applicable upon expiration of a protected term and it follows that the benefits derived from constitutional protections during that term cannot be projected into an unprotected term. Thus the salary at which any unprotected term is commenced—including the salary of a judge or justice leaving a protected and embarking upon an unprotected term—is the statutory salary then paid to judges or justices of equal rank who never served during a protected term. Although a salary of a judge or justice serving a protected term will be decreased upon entering a new term, such a result is constitutionally permissible as such a judge or justice has voluntarily embarked or will voluntarily embark upon a new term for which there was or is a legislatvely designated compensation. The judgment is affirmed as to any judge or justice who served any portion of his term or the unexpired term of a predecessor prior to 1 January 1977, and as to judicial pensioners whose benefits are based on the salary of such a judge or justice. In all other respects the judgment is reversed. All parties shall bear their own costs on appeal. Manuel, Acting C. J., Mosk, J., Richardson, J., Racanelli, J., and Brown (G. A.), J.,* concurred. Prior to amendment in 1976 Government Code section 68203 provided in pertinent part: “... on September 1 of each year. . . the salary of each justice and judge. . .shall be increased by that amount which is produced by multiplying the then current salary of each justice or judge by the percentage by which the figure representing the California consumer price index as compiled and reported by the California Department of Industrial Relations has increased in the previous calendar year.” (Stats. 1969, ch. 1507, § I.) Section 68203, effective 1 January 1977, provides in pertinent part: “On July 1, 1978, and on July 1 of each year thereafter the salary of each justice and judge. . .shall be increased by that amount which is produced by multiplying the then current salary of each justice or judge. . .by the percentage by which the figure representing the California consumer price index as compiled and reported by the California Department of Industrial Relations has increased in the previous calendar year, but not to exceed five percent (5%).” (Stats. 1976, ch. 1183, § 4.) Thal section provides: “Salaries of elected state officers may not be reduced during their term of office. Laws that set these salaries are appropriations.” The section was added to the Constitution in 1972 as a part of an initiative measure designated Proposilion No. 6. It is hereinafter referred to as Proposition 6. Also pertinent to the issues herein is California Constitution, article VI, section 19: “The Legislature shall prescribe compensation for judges of courts of record.” We are not persuaded by dicta extracted from Millholen v. Riley (1930) 211 Cal. 29 [293 P. 69], claimed to suggest that the relationship between judges and the state is not contractual in nature. In the first place, the employment relationship there involved a law secretary whose duties were deemed to be in “the nature of a public office” which apparently could be terminated at will. (Id., at p. 33.) The issue was not one of a vested contractual right but rather the constitutional power of a court to employ and provide compensation for necessary personnel independently of statutory provisions deemed to concern only the executive department of state. Moreover, although the elements of a public office—an office created by law rather than by an express contract of employment—may be different in some respects (see 1 Witkin, Summary of Cal. Law (8th ed. 1973) p. 647), it does not follow that no contractual relationship exists between the state and a person elected or appointed to that office. In fact, the elements of compensation for such an office become contractually vested upon acceptance of employment. (See Betts v. Board of Administration (1978) 21 Cal.3d 859, 863 [148 CaI.Rptr. I 58, 582 P.2d 614].) While Betts deals with questions of a pensioner’s—as distinguished from an employed person’s—contractual benefits, it is clear a pensioner’s contractual benefits are merely derivative from covenants of employment. Moreover, as will be seen in our discussion of Proposition 6, that constitutional provision forecloses any salary reduction during a judge’s term in office, including reduction in a cost-of-living provision enacted during the same term in office. As used herein, the phrase “judicial pensioners” refers to both retired judges and other persons whose benefits are based on services of a deceased judge, e.g., the surviving spouse or minor children of a deceased or retired judge. Even pre-1965 pensioners are entitled to percentage participation in judicial salaries actually paid or to be paid under compulsion of law to judges or justices occupying the judicial office to which the retired or deceased judge or justice was last elected or appointed. We note that in Betts this court held the pensioner was entitled to both the benefit of a basic retirement allowance calculated as a proportionate part of the fluctuating salary of the incumbent in the office occupied by the pensioner and, additionally, a cost-of-living adjustment of the basic allowance. We stated then that the effect of the holding “is that petitioner thereby receives the benefit of a double increment of increase, a troubling result.” (Betts v. Board of Administration, supra, 21 Cal.3d 859, 867.) The net effect of our holding in the instant case is to allow a judicial pensioner but one increment of increase, that being the increment of pro-rata increase in the salary of the judge occupying the office formerly occupied by the retired or deceased judge. While that salary fluctuates with cost-of-living increases, the judicial pensioner’s proportionate share is his basic retirement allowance and it is not increased by any cost-of-living factor. Betts is distinguishable on the ground that, unlike the instant case, there was express legislative direction mandating the cost-of-living adjustment be applied to the fluctuating basic retirement allowance. (Id., at p. 865.) It was thus necessarily held that since statutes establishing both the fluctuating basic retirement allowance and the cost-of-living adjustment thereto were in effect during the pensioner’s term in office, he had acquired vested contractual rights to the dual benefits. In the instant case legislation exists directing increases—cost-of-living or otherwise—in the basic retirement allowance, although that allowance itself may fluctuate depending on adjustments —cost-of-living or otherwise—in salaries of incumbent judges. Excerpt from Arguments in Favor of Proposition 6, signed by Bruce W. Summer, Chairman of the Constitutional Revision Commission, Senator Nicholas G. Petris, and Assemblyman Robert G. Beverly. The Legislature has clearly indicated its intent, in recognition of vested interests, to provide minimum levels or to afford elections by which differing levels of compensation may become available to judicial pensioners. (See, e.g., Gov. Code, §§ 75060.1, 75060.2, 75075.1, 75076, 75090, 75090.1, 75090.2, 75090.3, 75093, 75094, 75095, 75095.1.) The Legislature has thus indicated its inclination to accommodate constitutionally compelled innovations in preservation of the substance of its legislative policies. In addition to the running of its course, a protected term may otherwise end, as by death of the incumbent, by retirement, by election or removal to another office, or by other departure from office. The deferred application of the 1976 amendment is not a right applying to a particular judicial office. Upon termination of a protected term, a judge or justice who succeeds to the judicial office—including the incumbent—will be entitled only to that salary provided by sections 68200 through 68202, inclusive, as applicable, and amended section 68203. We note that judicial salaries have in all instances been paid in accordance with section 68203 as amended in 1976. The composition of the court in this case having been approved by the parties at the commencement of hearing, we deem as moot the question of disqualification inappropriately addressed in the dissenting opinion. Assigned by the Acting Chairperson of the Judicial Council.
NEWMAN, J. I dissent. One year ago, in another politically sensitive case, I quoted Learned Hand as follows (People v. Tanner (1979) 24 Cal.3d 514, 538 [156 Cal.Rptr. 450, 596 P.2d 328]): “‘When we ask what Congress [or another legislature] “intended”, usually there can be no answer, if what we mean is what any person or group of persons actually had in mind. Flinch as we may, what we do, and must do, is to project ourselves, as best we can, into the position of those who uttered the words, and to impute to them how they would have dealt with the concrete occasion.’ (United States v. Klinger (2d Cir. 1952) 199 F.2d 645, 648.) The distinguished justice added, ‘He who supposes that he can be certain of the result, is the least fitted for the attempt.’” How might this salary case have been decided if each of us on the court had projected himself conscientiously into the 1964, 1969, 1972, and 1976 positions of those legislators who “uttered the words” that are contained in the legislative measures pertinent here? In 1969, for instance, what if a legislator in debate (or the Legislative Counsel, in his summary) had stated, “Interested observers have noted that (1) for incumbent appellate judges, increases based on the Consumer Price Index will irrevocably be guaranteed until those judges’ terms expire, and (2) for some incumbents the terms will not expire until 1982”? What if a legislative committee chairman had advised: “For each judge you are being asked to approve an ‘employment contract’ and to endorse his or her ‘promised compensation’ [ante at pp. 538, 539], The bill as now drafted means you are about to adopt ‘agreements of employment. .. [that] are binding and constitutionally protected’ [ante, p. 538]. Its ‘full cost-of-living provision’ would require our State to pay all judges ‘the represented compensation [including full cost-of-living increases] for their terms of office’; that is, for some judges until 1982—more than 12 years from now [id.]. Further, regardless of the salaries that, in future years, laws will set for all other state officers and employees, the Legislature may never impair the contracts with judges that this bill would adopt unless there is some ‘“emergency” serving to protect “a basic interest of society”’ [ante, p. 539].” In brief summary, I dissent here because I am persuaded that no evidence whatever suggests that the California Legislature ever intended (1) to promise judges anything, (2) to adopt any formally recognized “agreements of employment” [ante at p. 538], or (3) to preclude modification by statute of cost-of-living adjustments that demonstrably were experimental and tentative. If this court’s 1980 views had been forecast by anyone, if slide-rule projections of the now grotesquely swollen and embarrassingly out-of-line salaries—cultured anachronically in the medium of the Consumer Price Index plan—had been reported, if the pay scales that now have won the majority’s blessing had earlier been arrayed in full Winchester Mystery House splendor, I think it is inconceivable that the legislators would have enacted and left unchanged the pending proposals—in 1969, for unrestricted use of the Consumer Price Index and, in 1972, for rigidifying by Assembly Constitutional Amendment not only the salaries of elected state officers but also (as hindsight now seems to counsel) the unique salary-adjustment-formula for incumbent judges. Finally, as will be explained, I think my colleagues have failed to answer several arguments ably set forth in the Court of Appeal opinion in this case (by Fleming, J., with Roth, P. J., and Beach, J., concurring). I. Contractual and vested rights Does the 1976 amendment to Government Code section 68203 impair contractual or vested rights? If so, prior to the amendment exactly what contractual rights did the section vest in the judges who took office before January 1, 1977? The section then read, “[Ojn the effective date of the 1969 amendments to this section and on September 1 of each year thereafter the salary of each justice and judge. . .shall be increased by that amount which is produced by multiplying [etc.].” (Italics added.) The justices and judges referred to were those “named in Sections 68200 to 68202.” The names appearing in those sections were “the Chief Justice... and each Associate Justice of the Supreme Court,” the “[presiding justice or associate justice of a court of appeal division,” each “[j]udge of the superior court,” and each “[j]udge of a municipal court.” Did the Legislature mean the incumbents only? Obviously not. Those who took office after the original enactment and after amendment were included too. However, with regard to each individual justice and judge did the Legislature express or imply any intent as to “term of office”? I think not. The statute nowhere mentions anybody’s term. Instead it specifies “each year thereafter.” Until when? I submit that “each year thereafter” meant each year until the statute was amended or repealed, with no extra years to be set by terms of office. Public officers and employees may, of course, enter into salary and wage agreements with the state; and by statute the Legislature may articulate the terms of the agreements. But section 68203 is not that kind of statute. The majority of the legislators never would have approved the law, I believe, had they been advised that its words created a contractual right to cost-of-living increases that would survive amendment or repeal. There was no contract because there was no offer or acceptance. “[E]ach year thereafter” was designed as a legislative, not a contractual, phrase. Salary and wage contracts that bind employers, including public employers, typically contain definite dates. Is it not startling for the majority here to rule that a statute referring only to “each year thereafter [indefinitely]” nonetheless creates a binding contract to pay certain salaries during particular terms of office? I believe there was no binding contract, and thus I identify no rights that could have been impaired. Indeed, it was the absence from salary statutes of vested rights to compensation for services not yet rendered that necessitated the constitutional prohibition of reductions in elected officers’ salaries during their terms of office (art. Ill, § 4). It is neither necessary nor fitting for this court to add to that constitutional protection a judicially contrived right, purportedly contractual, that is not enjoyed by the thousands of other public officers and employees who serve indefinite tenures. As to (1) pensioners, and (2) the judges who took office on or after January 1, 1977, I am persuaded by these excerpts from Justice Fleming’s opinion: “[T]he rights of judicial pensioners are directly tied to those of sitting judges and take the form of a floating pension proportionate to the comparable current judicial salary. We have heretofore concluded that, absent any reduction in the dollar amount of the pension, judicial pensioners’ rights are dependent upon sitting judges’ rights to salary, and, if a prospective increase in salary for sitting judges does not materialize, the pensioners have no independent grounds for complaint. Any contractual rights for future increases in judicial salary and any vested or accrued rights to future increases in judicial salary are not the rights of the pensioners. Consequently, any impairment or infringement of such rights only indirectly and secondarily affects judicial pensioners and gives them no separate cause to complain. (Cf. Harrison v. Colgan (1905) 148 Cal. 64, 73 [82 P. 674].) The pensioner floats in water whose origin is the current judicial office, and like water his rights cannot rise above their source. “Newly-elected Judges. Nor do newly-elected or newly-appointed judges have cause to complain of prior legislative change in the future salary of the office to which the judge has been elected or appointed. Such judges did not serve under the old dispensation and could have no legitimate expectation of the continuance of cost-of-living increases in salary under the old law, in that the law had already been changed prior to their assumption of office.” II. The constitutional mandate The next question is whether the 1976 amendment to section 68203 conflicts with the constitutional prohibition of reductions in salaries; The question is difficult. I believe that it is answered correctly in Justice Fleming’s opinion as follows: “Before discussing this constitutional issue we first note the general considerations that lead to constitutional prohibitions against reductions in the salaries of judicial officers during their term of office. The key objective is to create and maintain an independent judiciary, and the key factors thought to bring this about are security of tenure and security of subsistence. Both factors appear in the federal Constitution, which declares that judges shall hold office during good behavior and receive a compensation which shall not be diminished during their continuance in office. (U.S. Const., art. Ill, § 1.) As observed by the Supreme Court in Evans v. Gore (1920) 253 U.S. 245, 252 [64 L.Ed. 887, 892, 40 S.Ct. 550, 11 A.L.R. 519], in turn quoting Hamilton in The Federalist, No. 79, ‘[a] power over a man’s subsistence amounts to a power over his will.’ That court further noted the constitutional premise that protection of a judge’s subsistence is not so much for the benefit of the judge as it is for the public interest in the preservation of an independent judiciary. (Evans v. Gore, supra, at pp. 248-254 [64 L.Ed. at pp. 890-893].) “These basic constitutional premises find expression in the California Constitution, which gives judges the protection of relatively-long fixed terms (appellate judges, 12 years; trial judges, 6 years (art. VI, § 16)) and which prevents reductions in judges’ salaries during their term of office (art. Ill, § 4). “Factually, reductions in judicial salary may come about in four different ways: “(1) Reduction in dollar amounts of judicial salaries. “(2) Increased specific deductions against judicial salaries. “(3) Increased general deductions against all salaries. “(4) Reduction in purchasing power of all salaries. “Clearly, if the Legislature had undertaken to reduce the dollar amounts payable as salaries to judges (item 1), or had undertaken to deduct increased amounts from judicial salaries for pension contributions or the like and thereby brought about an absolute reduction in judges’ salaries (item 2), the constitutional prohibition against reduction in salary during a judge’s term of office would come into play. (Cf. Abbott v. City of Los Angeles (1958) 50 Cal.2d 438, 451 [326 P.2d 484].) Neither of these events has occurred. Nor has any complaint been made of reduction in judicial salaries as a consequence of a general tax imposed on all salaries (item 3), which was the issue in Evans v. Gore (1920) 253 U.S. 245 [64 L.Ed. 887, 40 S.Ct. 550, 11 A.L.R. 519], the case which exempted the salaries of federal judges from the then newly-imposed general income tax. The reduction complained of here is related to the loss in purchasing power for all salaries (item 4). Plaintiffs do not directly complain of loss of purchasing power in judges’ salaries as a result of inflation and the depreciating value of the dollar, the issue unsuccessfully raised in Atkins v. United States (Ct.Cl. 1977) 556 F.2d 1028, cert, denied (1978) 434 U.S. 1009 [54 L.Ed.2d 751, 98 S.Ct. 718], but they present the point in indirect form by arguing that removal during an inflationary period of statutory protection against increases in the cost-of-living constitutes a reduction in salary contrary to article III, section 4 of the California Constitution. Plaintiffs argue that sitting judges during 1969 to 1976 had a legal expectation of annual increases in salary commensurate with increases in the cost-of-living as shown by the California consumer price index, a legal expectation that constituted a valuable part of their compensation, and that any diminution in the amount of such increases during their term of office effected an unconstitutional reduction in salary. Plaintiffs conclude that article III, section 4, which forbids reduction in salary during a judge’s term of office, likewise forbids modification of future salary increases called for under an automatic cost-of-living formula. “Of equal general importance to this cause is another provision of the California Constitution, article VI, section 19, which authorizes the Legislature to prescribe compensation for judges of courts of record. That provision confers on the Legislature ‘the fullest measure of control, direction, ordination, and dictation over the matter of the amount and payment of judicial salaries. . . .’ (Sevier v. Riley (1926) 198 Cal. 170, 175 [244 P. 323].) Absent some constitutional or statutory provision to the contrary, the salaries of all public employees, including judges, may be modified by legislative action. No officer or employee of the State of California has an immutable vested right to any specific salary. (Butterworth v. Boyd (1938) 12 Cal.2d 140, 150 [82 P.2d 434, 126 A.L.R. 838]; Miller v. Kister (1885) 68 Cal. 142, 144 [8 P. 813]; cf. Miller v. State of California (1977) 18 Cal.3d 808, 813 [135 Cal.Rptr. 386, 557 P.2d 970].) “Plaintiffs’ constitutional challenge to the 1976 amendment to section 68203 asserts that article III, section 4, which prohibits any reduction in the salaries of elected state officers during their term of office, not only qualifies the Legislature’s plenary power to adjust current judicial salaries but prohibits legislative adjustment during a judge’s term of office in the cost-of-living formula established in 1969 by section 68203. In opposition, defendant argues that the legislative attempts in 1964 and 1969 to solve the perennial controversy over judicial salaries by adopting a cost-of-living formula to determine future judicial salaries, did not bind the Legislature to maintain indefinitely any particular cost-of-living formula for future judicial salaries. The constitutional issue posed is whether the 1976 modification of prospective cost-of-living increases in salary constituted a reduction in salaries as that term is used in the Constitution. “A. The History of Article III, Section 4, Does Not Support Plaintiffs’ Interpretation of Its Meaning. “Plaintiffs assert that article III, section 4, was expressly intended by the Legislature to prohibit revision of the prospective cost-of-living adjustments contained in section 68203. In support of their assertion plaintiffs submitted to the superior court materials which related to the background of the enactment of article III, section 4. “From these materials it appears that in 1971 the then Governor attempted to prevent the 1970 cost-of-living increase for judges from coming into effect by a line-item veto of a budget appropriation which covered the increase in judicial salaries. The Attorney General gave an opinion to the Controller which concluded that ‘Section 68203 does not, of itself, appropriate funds necessary to support the increase required by Section 68203. . .,’ that although judicial salaries remained payable at the new and higher rate, they could not be paid except to the extent funds for the payment of judicial salaries had been appropriated. Thus, if the Governor were to adhere to his position, judicial salaries would be paid at the increased rates, but the funds appropriated to pay such salaries would become exhausted before the close of the fiscal year. On an annualized basis the veto would become effective to prevent full compliance with section 68203. Push did not come to shove, however, and the potential future fiscal crisis was averted when the Governor withdrew his line-item veto. Thereafter, the chairman of the Constitution Revision Commission personally drafted an amendment to the constitutional revision then under consideration in the Legislature, an amendment which added the second sentence to what is now section 4 of article III. ‘Salaries of elected state officers may not be reduced during their term of office. Laws that set these salaries are appropriations' (Italics ours.) This additional sentence remained in the final legislative version of the Constitution adopted by the electorate in November 1972. “From this incident plaintiffs argue that the proponents of article III, section 4, expressly intended to prevent modification of prospective salary adjustments under section 68203—that is, to forbid future legislative modification of the automatic cost-of-living formula then contained in that section, even for future years and for future salary levels. This speculation seems wide of the mark. Plainly the proponents and draft-men of article III, section 4, meant to prevent a repetition of the line-item veto incident, a goal achieved by the second sentence of article III, section 4, which converts a salary law such as section 68203 into an appropriation and renders unnecessary a separate budget appropriation which a governor could veto. But it is one thing to view article III, section 4, as protective of salary increases that have become due and payable, and another to argue, as do plaintiffs, that it also prevents modification of all prospective salary adjustments. We find nothing in the legislative history of article III, section 4, and nothing in the 1971 veto incident to support that argument. “Nor can plaintiffs derive support for their interpretation of article III, section 4, from the ballot arguments presented to the voters at the time of the adoption of the constitutional revision in November 1972. The arguments in the ballot pamphlet submitted to the voters were not only devoid of any disclosure of intent and purpose to prevent modification of prospective judicial salary adjustments, but to the contrary they suggested the absence of any such purpose. Insofar as they related to article III, section 4, the ballot arguments stated: “‘A provision would be added to prohibit any reduction in the salaries of elected state officers during their term of office and to provide that laws setting those salaries are appropriations. This would eliminate the existing requirement that there be a specific appropriation enacted in the Budget Act, or otherwise, to pay salaries.' “‘The various revisions and deletions of existing language in the State Constitution proposed by this amendment will not result in any cost or revenue changes.' “‘Proposition 6 also protects elected State officers in all three branches of government by providing that their salaries can’t be reduced during the term for which they were elected and makes salary statutes appropriations. This will not increase the cost of government or cost the taxpayers more, but will strengthen the independence of all three branches of government.’ (Italics added.) No reference was made to section 68203 or, indeed, to any aspect of the cost-of-living adjustment issue, other than the general statements that adoption of article III, section 4, ‘will not increase the cost of government or cost the taxpayers more’ and ‘will not result in any cost or revenue changes.’ “In short, the history of article III, section 4, indicates it was directed against a perceived evil—attempts by veto of appropriations to prevent payment of increased judicial salaries after cost-of-living adjustments had gone into effect and become due and payable. The materials before the court suggest that those who drafted article III, section 4, those who voted to put it on the ballot, and those who voted in its favor, never considered or intended that adoption of article III, section 4, would freeze into the constitutional landscape the statutory experiment in judicial cost-of-living salary adjustments set out in section 68203. “B. Prospective Cost-of-Living Increases Are Not Salaries Within the Meaning of Article III, Section 4. “Plaintiffs’ challenge to the 1976 amendment to section 68203 raises the question whether prospective cost-of-living increases—that is, increases which have not yet gone into effect—are salaries within the meaning of article III, section 4 of the Constitution. Two settled principles of constitutional law are relevant. The first is the presumption of constitutionality to which all legislation is entitled. (See, e.g., California Housing Finance Agency v. Elliott (1976) 17 Cal.3d 575, 594 [131 Cal.Rptr. 361, 551 P.2d 1193].) The second is the canon that ‘where the Legislature has by statute adopted a reasonable construction of a constitutional provision its action has strong persuasive force and will ordinarily be followed.’ (Woodcock v. Dick (1950) 36 Cal.2d 146, 148 [222 P.2d 667]; see also Lundberg v. County of Alameda (1956) 46 Cal.2d 644, 652 [298 P.2d 1]; San Francisco v. Industrial Acc. Com. (1920) 183 Cal. 273, 279 [191 P.26].) At bench, the Legislature’s implicit construction in 1976 that the word salary in article III, section 4, does not include prospective cost-of-living increases, was reasonably contemporaneous with its approval of article III, section 4, in 1972. “Section 68203, as it existed when article III, section 4, was drafted and adopted, provided that on September 1 of each year ‘the salary of each justice or judge shall be increased’ by an amount determined by multiplying the ‘then current salary’ by the percentage increase in the California consumer price index. The use of the future tense ‘shall’ and the reference to ‘then current salary’ indicate that the Legislature did not view a prospective cost-of-living increase as part of a judge’s salary until that increase became due and was added to ‘then current salary’ to become the salary payable for the next 12 months. Likewise, salary is defined in the Judges’ Retirement Law (Gov. Code, § 75003) as ‘the compensation received by a judge as the emolument of the office of judge’ (italics added). This definition obviously does not embrace compensation payable in the future after cost-of-living adjustments have been made; clearly, under section 75003 a judge’s salary is the compensation he is currently being paid. “In Harrison v. Colgan (1905) 148 Cal. 69 [82 P. 674], the California Supreme Court, in a somewhat related context, refused to treat a prospective salary increase as included within the term salary. That case involved a constitutional provision entitling justices of District Courts of Appeal to the same salaries as justices of the Supreme Court. In 1905 the Legislature raised the annual salaries of Supreme Court justices from $6,000 to $8,000. However, due to the then constitutional prohibition against increases in the salaries of judges during their term of office, no Supreme Court justice was eligible to claim the higher salary until 1907, when two justices would begin to serve new terms. Plaintiff, a justice of a District Court of Appeal, claimed that because he had been appointed after the effective date of the 1905 increase, he was entitled to the higher salary under the constitutional provision making the salaries of District Court of Appeal justices the same as those of Supreme Court justices. The Supreme Court rejected this claim stating: 'What, then, are the salaries of the justices of the supreme court to which those of the district court justices must for the present conform? Clearly not the salaries which may hereafter be payable under the amended statute when a new term of some of the justices of the supreme court shall have begun, but the present salaries now allowed and paid by them by law.’ (Harrison v. Colgan (1905) 148 Cal. 69, at p. 72; italics added.) In other words, even though Supreme Court justices might have a future right to an increase in compensation, until the increase became effective it could not be considered salary within the meaning of the provision entitling District Court of Appeal justices to the same salary as Supreme Court justices. The salary of a Supreme Court justice was what he was then being paid. So here. The salary of an elected state officer is the amount he is presently being paid. For example, if in January 1976 the Legislature in its wisdom had passed a law making the salary of a Court of Appeal justice for the calendar year 1977 the same as that of a Supreme Court justice, and had then repealed the law in February 1976, thus returning future Court of Appeal salaries to their original amounts, under the reasoning of Harrison the prospective increase which never materialized could not be considered salary, and no reduction in salary would have occurred by reason of the repeal. Although former section 68203 provided that judges would receive annual cost-of-living increases, those future increases did not become salary within the meaning of article III, section 4, until they had become payable as current salary. “To conclude the point, salary is present pay, not future pay. “C. Elimination of a Prospective Increase in Salary Is Not a Reduction in Salary. “Although no California court has decided the precise issue, three New Jersey cases have rejected the argument that elimination of a prospective increase in salary constitutes a reduction in salary. (Greenway v. Board of Education (1943) 129 N.J.L. 461 [29 A.2d 890, 145 A.L.R. 404]; Offhouse v. State Board of Education (1944) 131 N.J.L. 391 [36 A.2d 884]; Kopera v. Bd. of Ed. of Town of West Orange, Essex Co. (1960) 60 N.J.Super. 288 [158 A.2d 842, 846].) In Green-way, supra, a New Jersey statute prohibited local school boards from reducing teachers’ salaries. A local board’s existing teachers’ salary schedule, which provided future incremental salary increases for teachers, was repealed by the local board as an economy measure during the depression. A teacher contended that the repeal of the prospective increase by the local board constituted an impermissible reduction in salary contrary to the state statute. The New Jersey court disagreed, holding that increments do not become part of a teacher’s salary until they accrue, and that until accrual their modification does not constitute a reduction in salary. (29 A.2d at p. 891.) In Offhouse, supra, the court made the same point: ‘Only accrued increments under a valid and subsisting regulation of the local board are beyond repeal. Unaccrued increments do not take the classification of ‘salary’ within the intendment of [the statute].’ (36 A.2d at p. 887.) And in Ropera, supra, the court said: ‘The failure to receive an increase of salary does not constitute a reduction.’ (158 A.2d at p. 846.) “Plaintiffs seek to distinguish these cases on the ground that they deal with a mere statutory prohibition against salary reductions and not with a constitutional prohibition. Such a suggestion misconceives the issue. The New Jersey statute, like the constitutional provision at issue here, prohibited salary reductions; the issue there, as here, was whether repeal by a subordinate body of prospective increases it had previously authorized constituted a reduction in salary within the meaning of the statutory prohibition. The New Jersey courts held it did not, stating: ‘Until the accrual, the modification or repeal of the rule providing for increments does not constitute a reduction of salary within the intendment of [the statute], A regulation providing for increments is a mere declaration of legislative policy that is at all t