By Michael B. Kent Jr. (Campbell University)
Of the many current issues facing state and local governments, perhaps one of the most pressing is public pension reform. According to the U.S. Census Bureau, there are nearly 4,000 public pension systems in the United States, the vast majority (3,742) of which are administered by local governments. As of 2014, these systems had more than 19,000,000 members and more than 9,000,000 beneficiaries receiving periodic payments. But many of these systems are in serious financial trouble, collectively facing unfunded liabilities that, by some estimates, equal approximately $4.7 trillion. In light of these shortfalls, many states have enacted a variety of reform measures to stave off fiscal collapse, and these reforms have drawn numerous legal challenges from public sector employees and retirees.
One of the challenges often asserted by these plaintiffs is that changes to public pension plans violate the Takings Clause of the federal constitution or one of its state constitutional counterparts. Despite the frequency with which they are raised, however, these claims seldom receive engaged analysis by the courts, and they have been given a sort of second class treatment by most legal scholars. On one level, this treatment is not all that surprising. Because most public pension plans are deemed to create contract rights in their participants, the Contracts Clause seems the more obvious provision under which to analyze pension plan changes. As a result, takings challenges are often overshadowed by challenges brought under the Contracts Clause, with many courts and commentators viewing them as largely duplicative. Additionally, even when takings challenges are treated independently, the number of troublesome issues and the general messiness of takings doctrine make meaningful analysis difficult.

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