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Scott to lawmakers: pension bills not good enough

By Tom Flanigan


Tallahassee, FL – There's a new angle to the debate over Florida's pensions for public employees. The house and senate have been working on their own reform plans and now, as Tom Flanigan reports, Governor Rick Scott has weighed in with a reform plan of his own.

For weeks, the Florida Legislature has been wrestling with the issue how to move hundreds of thousands of Florida's public employees into paying for part of their own retirement funds. Florida is the only state which still has a pension program into which participants pay nothing. The Florida House and Florida Senate each have bills that would require participants to contribute something, but would otherwise keep the pension system pretty much intact. Now Governor Scott is backing a third plan his plan.

"The right thing to do is to do exactly what the private sector has done; you move new employees into a defined contribution plan because then you know exactly what your costs are."

Instead of the current pension plan, which the state pays for in its entirety, Scott says what he envisions retirement plans in which all participants would have a solid stake.

"You know, my proposal, which I believe in, is that it should be a flat rate of five percent."

The governor is not alone in supporting that arrangement. Tuesday morning, he stood with a coalition of supporters that calls itself "Floridians for Sustainable Pensions". It consists of mostly pro-business groups like Florida TaxWatch, Associated Industries of Florida, the Florida Chamber of Commerce, National Federation for Independent Business, FreedomWorks Florida, Americans for Tax Reform and Americans for Prosperity. Also the James Madison Institute headed by Dr. Robert McClure.

"It's time for the public sector to do what most of the private sector has already done; replace taxpayer-guaranteed pension perks with 401K style retirement savings plans that they own, they can take with them when they leave and they can control."

State of Florida workers aren't the only public sector employees on the state retirement system rolls. There are somewhere around one-hundred-eighty thousand county and city employees in Florida who are on the pension plan. Dr. David Matkin, lead researcher for the LeRoy Collins Institute at Florida State University, says cities and counties have to spend more than the state on a relative basis to fund their employees' pensions.

"In the Fiscal Year 2009, cities were contributing five-point-six percent on average of their total governmental costs toward pension contributions and counties five-percent. And that's a 33-percent increase for cities and a 42-percent increase for counties from 2003 to 2009."

But the single largest employee group in the Florida Retirement System is the state's public school teachers and other school district workers. There are nearly three-hundred-nineteen thousand of them on the state pension plan now. Florida Education Association Spokesman Mark Pudlow says, Florida's Retirement System, now funded at more than eighty percent of obligations, is among the nation's healthiest. In addition, its annual rate of return is more than seven-percent again, among the country's best. He wonders why the need to change something that seems to be working so well.

"State workers are being asked to take a pay cut. You know, sort of like being imposed an income tax if you will, and that money's going straight into the general revenue fund. This looks like another attempt to try to raise money based on something that's already been promised to people, something that state workers have already earned."

There could be another problem for the governor's pension plan. He's pushing it relatively late in the session when both the house and senate plans are headed to a reconciliation in upcoming conference committee meetings. Florida House Minority Leader, Democrat Ron Saunders, doesn't give Governor Scott's proposal much chance of making a significant impact at this point.

"The pension issue is a very important issue and I think deserves a lot of input from the people affected. You know, coming up with new ideas halfway through the session is a bad way to go. So I don't even support what we've already done and I think it's gone too far. For the governor to suggest it doesn't go far enough I think does not take into consideration what's in the best interests, not just of employees but for the state of Florida."

Saunders sees it as part of a national effort against public employees in the name of creating more private sector jobs.

"I think it's more that they just don't like public employees and once they quit or get fired, they'll go out and get other jobs that helps the governor meet his 700,000 goal, even though they may be minimum wage jobs and so I just think it's just more anti-public employee more than trying to help anything else."

Another bill impacting state workers cleared the Florida House back on Friday and is moving ahead in the senate. It would stop the deduction of union dues from public employee paychecks and require workers to give their unions written permission to use their dues payments for political purposes.