The opinion of the court was delivered by: Lake, Justice
On discretionary review pursuant to N.C.G.S. § 7A-31 prior to a determination by the Court of Appeals from an order for plaintiffs entered by Thompson, J., on 2 June 1995 and an amended order entered on 25 September 1995 in Superior Court, Wake County. Heard in the Supreme Court 12 September 1996.
This is an appeal from an order entered essentially in plaintiffs' favor by the Honorable Jack A. Thompson in Superior Court, Wake County, pursuant to assignment and designation of the case as an exceptional case under Rule 2.1 of the General Rules of Practice. Following a two-week trial, including the testimony of twenty-four witnesses and 1,689 pages of transcript, and subsequent proceedings before the trial court, a final order on all issues was entered 25 September 1995.
This class action was initiated by the filing of plaintiffs' complaint on 2 October 1992. Many of the plaintiffs in this suit had previously brought a virtually identical suit, which resulted in certification of the class and partial summary judgment for plaintiffs. This ruling was reversed on appeal by this Court for failure of plaintiffs to comply with mandatory protest or demand requirements contained in N.C.G.S. § 105-267, which the Court held was the exclusive method for challenging unconstitutional or invalid income taxes in North Carolina. Bailey v. North Carolina, 330 N.C. 227, 412 S.E.2d 295 (1991), cert. denied, 504 U.S. 911, 118 L. Ed. 2d 547 (1992) ("Bailey I"). Plaintiffs took a voluntary dismissal in Bailey I before filing this action.
Plaintiffs' motion for class certification was again allowed by an order filed 10 October 1994, certifying a class of state and local government retirees and beneficiaries with claims for tax years 1989, 1990 and 1991 who had complied with North Carolina requirements for refund claims.
The trial court's judgment for plaintiffs was contained in two orders, the import of which held that the 1989 legislation which partially taxed state and local government retirement benefits was an unconstitutional impairment of contract under the United States Constitution. The trial court also ruled that the taxation was a material breach of contract, was an unconstitutional retroactive tax, violated Judges' state constitutional rights not to have their salaries diminished during office, and violated other state and federal constitutional provisions.
On 25 September 1995, the trial court entered an Amended Order in Wake County Superior Court. The amended order made further findings of fact and Conclusions of law and ruled on certain of plaintiffs' claims which were previously unaddressed. The amended order also provided for retirees who had five or more years of retirement system service as of 12 August 1989 to recover income taxes paid on retirement benefits since 1989 in the form of tax credits or refunds, if they had filed timely "protests." It also enjoined defendants to cease collecting income taxes on state and local government retirement benefits attributable to service prior to 1989. The amended order further provided for fifteen percent of the refund or credit amount for each plaintiff class member to be paid to a common fund for payment of plaintiffs' attorney's fees and various expenses and costs, with any excess remaining in the common fund to be paid to the State Employees' Association. Finally, the amended order stayed, pending appeal, the relief awarded to plaintiffs, including refunds, credits, and injunctive relief, except for notice to class members and preservation of relevant records.
Defendants filed notice of appeal on 25 September 1995. On 5 February 1996, defendants filed with this Court a petition for discretionary review prior to determination by the Court of Appeals. This petition was allowed by this Court on 3 April 1996.
The facts relevant to this appeal as established at trial are as follows. Beginning in 1939, the North Carolina General Assembly established numerous programs for the provision of retirement benefits to North Carolina state and local government employees. As of 12 August 1989, the date on which the General Assembly enacted chapter 792 of the 1989 Session Laws, the legislation which is the subject of this case, at least thirteen different public employee retirement systems were operating for the purpose of providing public servants with retirement benefits. These various systems are set forth in chapters 58, 120, 127A, 128, 135, 143, 143B, 147 and 161 of the North Carolina General Statutes (collectively referred to as the "Retirement Systems"). The Retirement Systems include three different benefit and contribution schemes: mandatory defined benefit plans with mandatory contribution, optional defined contribution plans or defined benefit plans to which employees may contribute, and noncontributory defined benefit plans.
The mandatory defined benefit systems include the Legislative Retirement System (LRS), the Consolidated Judicial Retirement System (CJRS), the Teachers' and State Employees' Retirement System (TSERS), the Local Government Employees' Retirement System (LGERS), and the Disability Income Plan (DIP). During the period relevant to this appeal, all full-time state and local government employees had to be a member of at least one of these systems and were required to contribute a specified percentage of their salary to the system through payroll deduction. Prior to 12 August 1989, an exemption from state and local taxation was allowed for each of the above systems, providing:
the right of a person to a pension, an annuity, or a retirement allowance, to the return of contributions, the pension, annuity or retirement allowance itself, any optional benefit or any other right accrued or accruing to any person under the provisions of [the primary deferred benefit retirement acts], and the moneys in the various funds . . . are hereby exempt from any state or municipal tax, and exempt from levy and sale, garnishment, attachment, or any other process whatsoever . . . .
N.C.G.S. § 128-31 (1986) (LGERS); accord N.C.G.S. § 120-4.29 (1986) (LRS); N.C.G.S. § 135-9 (1988) (TSERS); N.C.G.S. § 135-111 (1988) (DIP); N.C.G.S. § 135-52(a) (1988) (CJRS).
The optional defined contribution or defined benefit plans include the Supplemental Retirement Income Plan (SRIP), the Deferred Compensation Plan (DCP), and the Supplemental Retirement Income Plan for State Law Enforcement Officers (SRIPLEO). For each of these plans, employees could contribute during the course of their employment but were not required to contribute. An exemption from taxation was allowed for benefits accruing as a result of participation in these plans prior to 12 August 1989 in one of the following forms: "These benefits are . . . exempt from all State and local taxation," N.C.G.S. § 147-9.4 (1987) (DCP), or "[t]he right . . . to the benefits . . . is nonforfeitable and exempt from levy, sale, garnishment, and the benefits payable under this Article are hereby exempt from any State and local government taxes," N.C.G.S. § 143-166.30(g) (1987) (SRIPLEO); accord N.C.G.S. § 135-95 (1988) (SRIP).
The noncontributory defined benefit plans include the National Guard Pension Fund (NGPF), the Register of Deeds Supplemental Pension Fund (RofDSPF), the Separate Insurance Benefits Plan (SIBP), and the Sheriffs' Supplemental Pension Fund (SSPF). Employees were neither required to nor allowed to contribute to these systems, but benefits were offered to all employees eligible for participation in the plans. For each of these systems, an exemption from taxation was allowed prior to 12 August 1989 under one of the following provisions: "Benefits paid under the provisions of this [retirement system] shall be exempt from North Carolina income tax," N.C.G.S. § 143-166.85(e) (1987) (SSPF); accord N.C.G.S. § 127A-40(e) (Supp. 1979) (NGPF); N.C.G.S. § 161-50.5 (1987) (RofDSPF); or "The right of a participant . . . to the benefits provided . . . is nonforfeitable . . . and the benefits payable . . . are exempt from any State and local government taxes," N.C.G.S. § 143-166.60(h) (1987) (SIBP).
Each of these systems contains certain preconditions to the receipt of benefits. The primary one is the requirement that employees work a predetermined amount of time in public service before they are eligible for retirement benefits. After employment for the set number of years, an employee is deemed to have "vested" in the retirement system. Thereafter, the employee generally is guaranteed a percentage payment at retirement based upon years of service. Since the inception of the Retirement Systems, the periods of employment required for vesting have been shortened. For example, the LGERS, TSERS and CJRS or their predecessor systems were shortened over time from twenty years' service to the present five years' service. Plaintiff class members each completed five or more years of creditable public service prior to 12 August 1989, retired, and received benefits under one of the Retirement Systems after their retirement.
From their inception and until 12 August 1989, the benefits paid plaintiff retirees from the Retirement Systems were exempted from state taxation. Evidence adduced at trial established that the exemptions were contained in the aforementioned retirement statutes, alongside the requirements for and descriptions of benefits, as opposed to being located among or within the statutes providing the individual income tax provisions or other tax statutes. Numerous employee witnesses testified that defendants' agents offered the exemptions as a type of compensation to employees of state and local governments. The testimony reveals that often the exemption of benefits from taxation was communicated to prospective employees with the intent of inducing individuals to either begin or continue public service employment. Moreover, testimony and exhibits offered at trial establish that innumerable communications were made to plaintiff public employees throughout their careers, both orally and in writing (including multiple unequivocal written statements in official publications and employee handbooks) that their retirement benefits would be exempt from state taxation. Plaintiffs assert they relied on such statutes and communications as assuring compensation in the form of such exemption in exchange for public service. Upon accepting employment, plaintiffs also bore the risk that they would receive no benefits and that their contributions would be returned without interest should they fail to work the time required for vesting.
The exemption from state taxation on retirement benefits paid by the State, as provided under the Retirement Systems, applied only to state and local government employees and was not available to federal government employees. This case is one of many that arose in the wake of the United States Supreme Court's ruling in Davis v. Michigan Dep't of Treasury, 489 U.S. 803, 103 L. Ed. 2d 891 (1989). In Davis, the Supreme Court held that if a state taxes state and local government employees differently than it taxes federal employees, the state violates the constitutional doctrine of intergovernmental tax immunity as well as federal statutory law. Id. at 817, 103 L. Ed. 2d at 906. Under 4 U.S.C. § 111, the federal government expressly "consents to the taxation [by states] of pay or compensation for personal service as an officer or employee of the United States . . . if the taxation does not discriminate against the officer or employee because of the source of the pay or compensation." 4 U.S.C. § 111 (1988). Since the State made different provisions for taxation of federal employees (i.e., the exemption from state tax), the exemption was held to be violative as applied. Davis, 489 U.S. at 817, 103 L. Ed. 2d at 906.
In response to Davis, the North Carolina General Assembly passed 1989 Session Laws chapter 792, section 3.9 ("the Act"). The Act changed the exemption of retired state employees from taxation on retirement benefits in two important ways. First, the Act amended the exemption to provide it to all governmental employees--state, local and federal. Second, the Act placed a $4,000 cap on the amount of annual benefits that would be exempt from state taxation. N.C.G.S. § 105-134.6 (1989) (adjustments to taxable income).
Class plaintiffs are North Carolina state and local government employees whose retirement benefits vested on or before 12 August 1989, the ratification date of the Act. Plaintiffs assert, inter alia, that the State's removal of the exemption beyond the amount of $4,000 operated unconstitutionally to deprive them of benefits to which they had a vested right.
In this opinion, we first address whether plaintiffs have a contractual right to an exemption of their benefits from state taxation that has been impaired by the Act. Necessary to a full consideration of this question is examination of several subissues, including the legal relationship between vested members of the Retirement Systems and the State, the constitutionality of the State's contracting for a tax exemption, the factual basis of plaintiffs' contract claim, and finally the degree and reasonableness of the State's impairment of those contracts. In the second part of this opinion, we examine whether the State's passage of the Act amounts to a taking of plaintiffs' property without just compensation. Next, we consider whether the trial court erred by enjoining the State from future collection of the taxes in question. We then review the trial court's creation of a common fund for payment of fees and expenses incurred by plaintiffs. Lastly, we address whether the trial court erred by limiting recovery only to those plaintiffs who met the statutory requirements for filing a tax refund lawsuit as opposed to all retirees affected by the Act.
I. IMPAIRMENT OF CONTRACT
The central issue in this case is whether the plaintiffs have an enforceable contract right that has been unconstitutionally impaired by the State of North Carolina. Plaintiffs urge this Court to follow the Court of Appeals' decision in Simpson v. N.C. Local Gov't Employees' Retirement Sys., 88 N.C. App. 218, 363 S.E.2d 90 (1987), aff'd per curiam, 323 N.C. 362, 372 S.E.2d 559 (1988), which held that the relationship between the Retirement Systems and state employees who have vested in those systems is contractual in nature. Defendants argue that no contractual relationship exists between the Retirement Systems and the employees in this case. This argument is based on several contentions, notably that: (1) Simpson was wrongly decided, and there is no contractual relationship between vested state employees and the Retirement Systems; (2) as a general matter, statutes are statements of policy, and the legislature expressed no intent to create a contract for a tax exemption through the statute; and (3) the North Carolina Constitution prohibits contracting away the State's sovereign "power to tax" under Article V, Section 2(1). Upon analysis, we conclude that plaintiffs did have an enforceable contract right which has been impaired by the State through the passage of the Act by the General Assembly.
Article I, Section 10 of the United States Constitution, the "Contract Clause," provides in pertinent part, "No State shall . . . pass any . . . Law impairing the Obligation of Contracts . . . ." U.S. Const. art. I, § 10. In determining whether a contractual right has been unconstitutionally impaired, we are guided by the three-part test set forth in U.S. Trust Co. of N.Y. v. New Jersey, 431 U.S. 1, 52 L. Ed. 2d 92 (1977). The U.S. Trust test requires a court to ascertain: (1) whether a contractual obligation is present, (2) whether the state's actions impaired that contract, and (3) whether the impairment was reasonable and necessary to serve an important public purpose. Id.
A. Contractual Obligation
The first step of our analysis is determining whether a contractual obligation is present between plaintiffs and the State. The most pertinent North Carolina case on this subject is the Court of Appeals' decision in Simpson. In Simpson, plaintiffs were vested members of the North Carolina Local Government Employees' Retirement System. They brought a class- action suit against the State of North Carolina, the retirement system and its board of trustees. Plaintiffs argued that the State unconstitutionally impaired their contractual rights to a specific pension plan when the legislature amended the method of calculating the plan's benefits, resulting in a reduction of their benefits. The Court of Appeals, upon examination of approaches taken by other states, agreed and held that "the relationship between plaintiffs and the Retirement System is one of contract." Simpson, 88 N.C. App. at 223, 363 S.E.2d at 93. This was based on the premise that retirement benefits are presently earned but deferred compensation to which employees have a vested contractual right. Id. at 223, 363 S.E.2d at 93-94. As the Court of Appeals stated:
"A pension paid a governmental employee . . . is a deferred portion of the compensation earned for services rendered." If a pension is but deferred compensation, already in effect earned, merely transubstantiated over time into a retirement allowance, then an employee has contractual rights to it. The agreement to defer the compensation is the contract. Fundamental fairness also dictates this result. A public employee has a right to expect that the retirement rights bargained for in exchange for his loyalty and continued services, and continually promised him over many years, will not be removed or diminished. Plaintiffs, as members of the North Carolina Local Governmental Employees' Retirement System, had a contractual right to rely on the terms of the retirement plan as these terms existed at the moment their retirement rights became vested.
Id. at 223-24, 363 S.E.2d at 94 (quoting Great Am. Ins. Co. v. Johnson, 257 N.C. 367, 370, 126 S.E.2d 92, 94 (1962)) (emphasis added).
The Court of Appeals and this Court have reaffirmed this central principle of Simpson in several subsequent cases. Faulkenbury v. Teachers' & State Employees' Retirement Sys., 345 N.C. 683, 483 S.E.2d 422 (1997) (vested plaintiffs had contractual right to disability retirement benefits, making subsequent amendment of calculation method subject to impairment analysis); Miracle v. N.C. Local Gov't Employees Retirement Sys., 124 N.C. App. 285, 477 S.E.2d 204 (1996) (pension terms at time of plaintiff's vesting deemed contractual, and subsequent alteration by the legislature subject to impairment analysis under Article I, Section 10 of the United States Constitution), disc. rev. denied, 345 N.C. 754, 485 S.E.2d 57 (1997); Hogan v. City of Winston-Salem, 121 N.C. App. 414, 466 S.E.2d 303 (pension term allowing retirement instead of transfer upon injury deemed contractual, and alteration after plaintiff's injury deemed subject to impairment analysis), aff'd per curiam, 344 N.C. 728, 477 S.E.2d 150 (1996); Woodard v. N.C. Local Gov't Employees' Retirement Sys., 108 N.C. App. 378, 424 S.E.2d 431 (amendment of disability benefits impaired vested member's contract), aff'd per curiam, 335 N.C. 161, 435 S.E.2d 770 (1993).
An examination of North Carolina case law, as well as an analysis of the principles underlying Simpson, confirms that the contractual relationship approach taken by the Court of Appeals in Simpson and our subsequent decisions is the proper one.
Cases arising in North Carolina have long demonstrated a respect for the sanctity of private and public obligations from subsequent legislative infringement. See, e.g., Trustees of the Univ. of N.C. v. Foy, 5 N.C. 58 (1805); see also Springs v. Scott, 132 N.C. 548, 44 S.E. 116 (1903) (judgment is a vested property right that cannot be taken by the legislature); Dunham v. Anders, 128 N.C. 207, 38 S.E. 832 (1901) (legislature has no power to destroy or to interfere with vested rights). In fact, scholars credit this Court, in the case of Trustees v. Foy, with being the first state or federal court to interpret the phrase "due process" as a protection of private rights against the lawmaking power of the legislature. Robert F. Utter, Swimming in the Jaws of the Crocodile: State Court Comment on Federal Constitutional Issues when Disposing of Cases on State Constitutional Grounds, 63 Tex. L. Rev. 1025, 1031-32, 1031 n.28 (1985). This Court in Foy interpreted the "Law of the Land" Clause, currently found in Article I, Section 19 of our Constitution, to mean that "individuals shall not be so deprived of their liberties or properties, unless by a trial by jury in a court of Justice, according to the known and established rules of decision derived from the common law and such acts of the Legislature as are consistent with the Constitution." Foy, 5 N.C. at 88.
This respect for individual rights has manifested itself through the expansion of situations in which courts have held contractual relationships to exist, and in which they have held these contracts to have been impaired by subsequent state legislation. In Jones v. Crittenden, 4 N.C. 55 (1814), this Court afforded protection to a private debtor-creditor contract by striking down an act of the legislature that temporarily suspended executions of judgments against debtors. In Stanmire v. Taylor, 48 N.C. 207 (1855), this Court extended contractual protection to a grant of property by the State by declaring unconstitutional a legislative act that sought to grant land previously granted by the State to someone else. This Court held that the first grant gave to the recipient a contractually based vested right that could not be impaired by subsequent legislation. Id. at 213; see also Ogelsby v. Adams, 268 N.C. 272, 150 S.E.2d 383 (1966) (statutory attempt to raise fee during term of lease of state property found to impair lease contract). In the case of Wilmington & Weldon R.R. Co. v. Reid, 80 U.S. 264, 20 L. Ed. 568 (1871), the United States Supreme Court applied the contractual analysis to a North Carolina incorporation charter and determined that the charter, which contained an exemption from all taxes for the company, created a contract between the railroad and the State. Id. at 267-68, 20 L. Ed. at 569. A subsequent legislative attempt to tax the property of the railroad was, therefore, an unconstitutional impairment of the contract. Id. at 268, 20 L. Ed. at 570. In Broadfoot v. City of Fayetteville, 124 N.C. 478, 32 S.E. 804 (1899), this Court extended that contractual analysis to municipal bond obligations. In that case, the Court held that the General Assembly's establishment of a new city charter that prohibited Fayetteville from taxing its citizens to pay for plaintiff's bonds issued under the old charter was an unconstitutional impairment of contract. Id. at 489-90, 32 S.E. at 807; see also Bryson City Bank v. Town of Bryson City, 213 N.C. 165, 195 S.E. 398 (1938) (ordinance limiting taxation subsequent to issuance of bonds constituted impairment of contract to the extent the town was thereby unable to meet its obligation). In First Nat'l Bank of Charlotte v. Jenkins, 64 N.C. 719 (1870), this Court extended protection from impairment beyond the strict contractual terms and beyond application to just the offeror and offeree by holding that equities arising in favor of a creditor out of contract between the State and the debtor are afforded protection. Id. at 725. A more recent and far-reaching case in this area is Pritchard v. Elizabeth City, 81 N.C. App. 543, 344 S.E.2d 821, disc. rev. denied, 318 N.C. 417, 349 S.E.2d 598 (1986). There, the Court of Appeals held that oral representations to municipal employees by city officials regarding accrual of benefits, upon which the employees relied, constituted a contractual agreement to which the city was bound. Id. at 551-53, 344 S.E.2d at 826-27. The court found no impairment, however, because the act that purportedly affected the benefits had not been applied retroactively.
The basis of the contractual relationship determinations in these and related cases is the principle that where a party in entering an obligation relies on the State, he or she obtains vested rights that cannot be diminished by subsequent state action. In Jones v. Crittenden, this Court stated, "The first principles of Justice teach us that he to whom a promise is made under legal sanctions should signify his consent before any part of it can be rightfullly canceled by a legislative act." Jones, 4 N.C. at 57 (emphasis added). In Stanmire, this Court quoted Chief Justice John Marshall in underscoring the inviolate nature of vested contractual rights:
"A law," says Judge Marshall, "annulling conveyances between individuals, and declaring that the grantors should stand seized of their former estates, notwithstanding those grants, would be as repugnant to the [c]onstitution as a law discharging the vendors of property from the obligation of executing their contracts by conveyances." Neither can the Legislature discharge itself from its obligation to perform its contracts.
Stanmire, 48 N.C. at 213 (quoting Fletcher v. Peck, 10 U.S. 87, 137, 3 L. Ed. 162, 178 (1810)). In Broadfoot, this Court upheld vested contractual rights even against the State's power to control taxation on the basis that "the power of taxation which is vested in the Legislature . . . is subject to the qualification which attends all State legislation--that is, that it must not be exercised to impair the obligation of contracts, thereby conflicting with the Constitution of the United States and of North Carolina." Broadfoot, 124 N.C. at 489, 32 S.E. at 807. In Ogelsby, this Court again enunciated the underlying expectational interests safeguarded by the Contract Clause protection of vested rights:
"The general principle is established in American jurisprudence that a legislative grant under which rights have vested amounts to a contract . . . ." "[A] legislative enactment in the ordinary form of a statute may contain provisions which, when accepted as the basis of action by individuals or corporations, become contracts between them and the State within the protection of the clause of the Federal Constitution forbidding impairment of contract obligations; rights may accrue under a statute or even be conferred by it, of such character as to be regarded as contractual, and such rights cannot be defeated by subsequent legislation. When such a right has arisen, the repeal of the statute does not affect the right or an action for its enforcement."
Ogelsby, 268 N.C. at 273-74, 150 S.E.2d at 385 (quoting 16 Am. Jur. 2d 790 Constitutional Law § 442 (1966)) (emphasis added).
Earlier North Carolina decisions involving the governmental provision of pensions, as well as Simpson, are similarly rooted in the protection of expectational interests upon which individuals have relied through their actions, thus gaining a vested right. In the case of In re Smith, 130 N.C. 638, 41 S.E. 802 (1902), this Court addressed the issue of whether pension warrants erroneously issued to pensioners after their death were property of the pensioners' estates. In concluding that they were not, the Court reasoned that pension warrants are charitable gifts because they are granted by the State only on the basis of indigence as defined in the statute. Id. at 639, 41 S.E. at 802. The Court went on to say, however, that had the pension warrants been disbursed as reimbursement or compensation, then they would belong to the estates. Id. The Court also recognized that had the pension warrants been issued before death but not cashed until after death, then the pensioners' estates would also be entitled to the benefits. Id. at 639, 41 S.E. at 803. These determinations imply that pensioners have vested rights to pension payments that are earned and have become due. See R.D. Hursh, Vested Right of Pensioner to Pension, 52 A.L.R. 2d 437, at 470-71 (1957). In Dillon v. Wentz, 227 N.C. 117, 41 S.E.2d 202 (1947), this Court addressed the question of how assets of a public employees' pension fund should be distributed upon dissolution of the fund. The Court determined that the members whose claims have accrued at the time of the dissolution have a "vested interest" in their benefits; and therefore, those members' benefits should be paid in full before distribution of the remainder of the fund. Id. at 122, 41 S.E.2d at 207.
In Simpson, the same principles were applied. There, the Court of Appeals concluded not only that employees relied on the representations regarding their pension benefits as consideration for their continued employment, but also that the pension benefits were "deferred compensation, already in effect earned." Simpson, 88 N.C. App. at 223, 363 S.E.2d at 94. Thus, the employees "had a contractual right to rely on the terms of the retirement plan as these terms existed at the moment their retirement rights became vested." Id. at 224, 363 S.E.2d at 94. Because the holding in Simpson is based on the protection of vested rights, as were the other cases in which courts found a contractual relationship, the Simpson court's determination that the relationship between employees vested in the retirement system and the State is contractual in nature is the appropriate Conclusion.
However, this determination does not end our analysis. This Court must determine whether the tax exemption was a condition or term included in the retirement contract. Our role in reviewing this issue is limited. Where the trial is conducted by the Judge sitting without a jury, as occurred in this case, the trial court's findings of fact have the force and effect of a jury verdict and are conclusive on appeal if there is competent evidence to support them, even though the evidence could be viewed as supporting a different finding. Curl v. Key, 311 N.C. 259, 260, 316 S.E.2d 272, 273 (1984). In the present case, the trial court found as a fact that "[a] reasonable person would have concluded from the totality of the circumstances and communications made to plaintiff class members that the tax exemption was a term of the retirement benefits offered in exchange for public service to state and local governments." A thorough review of the record reveals abundant, competent evidence to support this finding, including inter alia: creation of various statutory tax exemptions by the legislature, the location of those provisions alongside the other statutorily created benefit terms instead of within the general income tax code, the frequency of governmental contract making, communication of the exemption by governmental agents in both written and oral form, use of the exemption as inducement for employment, mandatory participation, reduction of periodic wages by ...