Bill Tying Senate's State Employee Pay Raises To House's Pension Reform Heads To Floor

May 1, 2017

Senate Budget Chairman Jack Latvala speaking to reporters Monday.
Credit Florida Channel

State employees will be getting a pay raise this year, under a proposal now heading to the Senate floor. But, it’s tied to a controversial pension reform issue and health insurance reform package backed by the House.

In the Senate’s original bill, Sen. Dennis Baxley (R-Ocala)—the main sponsor—says it included a benefit for firefighters who contract certain types of cancers due to their job. That’s still included in the new proposal.

“Multiple myeloma, non-Hodgkin’s, lymphoma, prostate cancer, or testicular cancer,” said Baxley.

It still contains a controversial provision criticized by many union groups. If new employees don’t make a retirement choice within a certain period of time, they would automatically default into the investment plan—a 401K style plan and the less popular retirement option for employees.

Today, public employees are defaulted into the traditional pension plan.

That’s one of the House’s biggest priorities. And, to get more Senators on board, there’s now a new change to the pension reform package.

Sen. Denise Grimsley (R-Sebring) says new hires would get a longer time period to choose their retirement option and it also includes a carve out for the default change.

“It extends the election period from six months to nine months for all new hires,” she said. “The new hires filling positions in the special risk class will continue to default into the pension plan.”

The newly expanded bill also incorporates a proposal to create a new state health insurance program based on a four-tier system from Platinum level to Bronze. It will take effect in 2020, and has an actuarial study tied to it to look at the savings and cost.

“Some younger employees that don’t have as many medical needs can pick a plan with a higher deductible or less benefits and they can pay less for it,” said Sen. Jack Latvala (R-Clearwater). “So, they put more money in their pocket. As they proceed as state employees and need more medical benefits or as they get a family or as they have kids, and their needs change, they can change to one of the other levels.”

Latvala is the Senate Budget Chairman, whose biggest priority also made it into the pension reform bill: pay raises.

“It includes a pay increase for every state employee in the state of Florida, except legislators,” he added.

For example, those making less than $40,000 a year will receive a $1,400 increase, while those making more than $40,000 will receive a $1,000 pay hike.

Excluding the pay raises, there’s normally not been an appetite in the Senate for pension reform, which Sen. Bill Montford (D-Tallahassee) pointed out during the bill’s last committee hearing in the Senate.

“We’ve been dealing with this issue—retirement and insurance—literally for five or six years,” said Montford. “It seems to have been an interest in the House and when it gets to the Senate, it doesn’t go anywhere. And, all of a sudden now, we’ve got a pay raise wrapped up with retirement with insurance. So, that raises question in my mind as to ‘why are we doing it this way?’”

Senate Democratic Leader Oscar Braynon was also not too happy about either the pension reform proposal or the insurance changes added to the pay raises.

“I have a problem with it,” he stated “But, all that being said, I think I’m going to swallow the apple because there’s some candy around it.”

Grimsley calls it “a comprehensive benefit pay package,” and Latvala also adds,It’s part of an agreement to make sure that everything relating to our state employees—both what we want in the Senate and what the House wants is in one package. So, it either succeeds together or it fails together.”

Union groups continue to express frustration over the default provision—saying the investment plan is the riskier plan for employees.

And, while bill proponents say new employees can still make a one-time choice to switch to the pension plan, opponents—like United Faculty of Florida’s Marshall Ogletree—say it’s not much of a choice because they have to buy back into the plan.

“It’s pretty expensive,” Ogletree said. “That can be cost prohibitive.”

Police and firefighter union groups—previously opposed to the bill—have now signed off on the proposal. But, Florida Education Association’s Lynda Russell, who likes the pay raises, says it’s easy to see why.

“We’ve exempted public safety workers out of this and I think it is a recognition that the investment plan is a far inferior plan,” she said. “But, I think we’ve also exempted them because we recognize the fact that our communities need career police and career firefighters. There’s no question, and they need to be able to retire with dignity. We still believe that our community still needs career teachers as well.”

Still, the controversial measure received unanimous support in the Senate Appropriations committee. And, following the meeting’s end Monday, Latvala expressed his irritation over the opposing union groups.

“It irritates me  greatly that some of those people who make their living as union organizers who are trying to stir up their members are trying to make something bad out of it,” he said, speaking to reporters.

With less than a week left in the legislative session, the comprehensive bill is slated for a floor vote this week.

For more news updates, follow Sascha Cordner on Twitter: @SaschaCordner.