Local Governments, Workers Oppose 'Stricter' Pension Rating Standard
A proposal to rate the financial health of public pension plans the same way private companies’ are rated, is meeting strong opposition from public workers’ unions. The measure made it past the Senate Governmental Oversight and Accountability Committee on Thursday after a lengthy debate.
Studies show, for most Florida cities, public employee pensions are underfunded. But when it comes to evaluating exactly how much Florida cities are on the hook for pensions, it gets dicey. Sen. Jeff Brandes (R-St. Petersburg) wants to create a statewide standard for rating local pensions, based on what he believes is a more accurate rating system.
“My goal, really, here is to highlight for our beloved police and fire and general employees the obligations that are out there and particularly the unfunded obligations that each of these cities possesses,” Brandes said.
He said, using the current rating system is what led to today’s situation: many cities’ pension liabilities exceeding what they can actually pay. He wants the state to apply a more conservative rating standard, the one used to evaluate private companies’ retirement plans. Theoretically, it would expose liabilities to be higher and funding levels lower, which Brandes thinks is closer to reality.
But public employee unions don’t want the stricter rating of their members’ pensions.
Robert Suarez, vice president of the Florida Professional Firefighters Association, said “If someone’s going to talk about a better way to model hurricanes and track hurricanes, that’s fine. We want to know more about our storms. But you can’t measure a hurricane using tornado modeling.”
He and other opponents say a stricter government standard is already coming next year, so adding in the private-standard rating could confuse things further.
And Sen. Bill Montford (D-Apalachicola) said, he’s concerned about the potentially downgraded pension funds because they could lower cities’ credit scores and scare investors away from buying bonds.
“I think we’re on thin ice when we do something, or could do something, that could undermine the confidence in that system,” Montford said.
The bill, S.B. 534, would not only create the new rating standard but require local governments to report their ratings to the state. Sponsor Brandes said, although public workers don’t like the idea, he’s only thinking of their ability to make informed decisions about their retirement.
Finally, after the heated pension debate, chair Sen. Jeremy Ring steered the committee to take up a less contentious bill, this one dealing with poetry.
Ring joked, “Let’s take on maybe the toughest bill that we’re going to do in this session, either the House or the Senate, all year: Senate Bill 366, Senator Hukill. State poet laureate.”
Joe Cavnaugh, president of the Florida State Poets Association, was up from Ormond Beach to press for the measure, which creates a four-year appointment for the state poet laureate, who would be chosen by the governor.
“In the words of Peter Meinke, who is the poet laureate of St. Petersberg, Florida, ‘Poetry is the emotional history of the world,’’’ Cavanaugh said.
The poetry bill creates a volunteer poet laureate who would travel to schools and promote poetry. The House version, sponsored by Rep. Dan Raulerson (R-Plant City) passed a subcommittee on Wednesday. And if it passes the full Legislature, Raulerson has promised to write a poem about the legislative process.