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Study shows city pension woes here to stay

by John Kennedy | September 26th, 2012

Municipal pension plans are stretching thinner in Florida as a smaller workforce supports a growing number of retirees — with prospects bleak that funds will recover, a report released Wednesday concludes.

The Leroy Collins Institute’s latest review of the plans found that while the sluggish economy has contributed to the funds’ problems, deeper woes plague them.

“These municipal pension issues were not created overnight and can’t be changed overnight,” said David Matkin, a public administration professor at Florida State University, who studied Florida’s 492 municipal pension plans for the Tallahassee-based institute.

The problems track those facing the Social Security system or Medicare:  Too few workers supporting a growing number of retirees. If anything, municipal budget cuts and layoffs in recent years have contributed to the imbalance, analysts said.

The result: city commissioners must earmark a larger share of municipal budgets for pension benefits. That means citizen services decline, Matkin said.

“They take up a space that is demanded by other services,” Matkin said. “You have to have some budgeting tradeoffs.”

A report released last November by the Leroy Collins Institute gave mixed reviews on the health of pension plans in 100 Florida cities, with one-third drawing ‘D’ or “F” grades for being underfunded. In Palm Beach County, plans in six cities earned failing, or near-failing grades.

Boynton Beach’s police plan and Palm Beach Gardens’ police and fire pensions were among the 15 percent of municipal plans drawing F’s. Various Plans in Riviera Beach, Boca Raton, Jupiter, Boynton Beach and Lake Worth earned D’s in the Collins Institute analysis of financial strength.

But general employee pensions in Boca Raton, Delray Beach and the West Palm Beach police pension also were named as some of the best-funded plans in the state.

Matkin found Florida’s pension slide began in the early 2000s, well before the recession. The timing is close to when Gov. Jeb Bush and the Republican-led Legislature approved changes that improved city police and fire pensions.

 The provision requires that growth in dollars flowing to cities from state taxes on property insurance premiums go to additional benefits for police officers and firefighters.

Cities next responded with such pension sweeteners as cost-of-living adjustments, lower retirement age, or an increased “multiplier” used in determining pensions based on years-of-service, all of which municipal officials say have forced cities to spend hundreds of millions of dollars more on pension costs since 1999.

 The pro-union law was the first measure enacted by Bush and Republican legislators in Florida that year, then the first GOP-controlled government of any state that had been part of the Confederacy. Bush had been endorsed in the 1998 governor’s race by police and fire unions over Democrat Buddy MacKay, largely on the strength of the promised payback.

Bush eagerly signed the measure ­- relishing the symbolism of making good in a hurry on a campaign promise.

Bush and Republican leaders, however, are rarely thought of as being allied with unions. Indeed, Bush last year co-authored an Op-Ed in the Los Angeles Times, decrying the financial woes of states, putting much of the blame on union contracts.

Bush’s co-writer was Newt Gingrich, then a candidate for the Republican presidential nomination.

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4 Responses to “Study shows city pension woes here to stay”

  1. NO more democrats Says:

    Holy Smokes, the failed democrat dominated state of CALIFORNIA is REVAMPING it’s PENSION PROGRAMS!

    Who would have known??!!!!

    Here’s the plan APPROVED by Democrat Governor Jerry Brown and his Democrat dominated Legislature:

    “The main pension bill, AB340, passed 49-8 in the Assembly and 38-1 in the state Senate. Gov. Jerry Brown negotiated the reforms with the Legislature’s Democratic leadership.

    The legislation will INCREASE the RETIREMENT AGE for new employees,
    CAP the annual PENSION PAYOUTS at $132,120,
    ELIMINATE NUMEROUS ABUSES of the system and REQUIRE WORKERS who are not contributing half of their retirement costs TO PAY MORE.”

    YEP! the dominate DEMOCRATS in political office in CA are following the LEAD of Wisconsin Governor Scott Walker who the democrats recalled and FAILED to oust from office! The people of Wisconsin voted Walker BACK into office!

    Wonder if CA taxpayers are able to stop paying the $18,000 PER MONTH for Nancy Pelosi’s congressional office (YES THAT IS A PER MONTH COST!)?

    Democrat dominated CALIFORNIA is crumbling. There is AN EXODUS from CALIFORNIA. The population has DEcreased. People are moving OUT because they KNOW the TAX HIKES are coming, Real estate prices are too high, the educational system is the pits, the regulations and rules have drummed out businesses.
    Businesses are relocating. (even Palm Beach has increased the number of former CA residents who are now coming to FL to reside because of taxation, costs and regulations.

    Read the article. Review the charts and graphs. A very heady piece on the failures in CA and soon across the nation.

  2. Thomas Whitmore Says:

    Good morning. Good morning. In less than an hour, aircraft from here will join others from around the world, and you will be launching the largest aerial battle in the history of mankind. Mankind, that word should have new meaning for all of us today. We can’t be consumed by our petty differences any more. We will be united in our common interest. Perhaps it’s fate that today is the 4th of July, and you will once again be fighting for our freedom. Not from tyranny, oppression, or persecution, but from annihilation. We’re fighting for our right to live, to exist�and should we win the day, the 4th of July will no longer be known as an American holiday, but as the day when the world declared in one voice, ‘We will not go quietly into the night! We will not vanish without a fight! We’re going to live on, we’re going to survive.’ Today we celebrate our independence day

  3. tom reynolds Says:

    Jeb Bush the cancer of Florida . He will not be held accountable . He will blame everybody but never will he admit to his bad actions . The only thing that will save these cities is the kind of BK that disolves the entire city .So anyway , nothing new with the Bush family . No accountable for Republicans.

  4. tom reynolds Says:

    Thanks Jeb ! Stop blaming you and your brother .

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