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Senate approves local pension overhaul facing uncertain future in House

Monday, April 28th, 2014 by John Kennedy

The Florida Senate set itself on a collision course Monday by approving a proposal overhauling local police and fire pensions but ignoring a more sweeping plan that cleared the House last week.

The Senate approach (CS/SB 246) give cities a chance to use the state’s insurance premium tax to bolster police and fire pension funds.

With the support of police and fire unions, the bill relaxes a 1999 law that required cities to offer only new benefits with these tax dollars, a move that analysts say has contributed to many funds now becoming financially troubled.

“This is one of the great crises facing Florida,” said Sen. Jeremy Ring, D-Margate, who has been working four years on trying to forge a consensus on local pensions.

The House, however, has merged a similar pension bill with a larger change to the Florida Retirement System. The FRS rewrite has little support in the Senate, and the House tactic is clearly aimed at trying to muscle senators into accepting it if they want to repair local pensions.

Ring acknowledged that in the session’s closing week, it’s difficult to predict the local pension bill’s fate. But he said it is poised to improve retirement accounts across Florida.

“If and when this bill passes, we won’t be involved in local pensions again,” Ring assured senators.

The Leroy Collins Institute at Florida State University has studied the state’ municipal pensions, sounding alarms about the financial health of many plans.

Those drawing low marks in the 2011 review, included Boynton Beach’s police plan and Palm Beach Gardens’ police and fire plans – while West Palm Beach’s police pension was named among the best-funded in the state.

The study concluded that the municipal 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 which improved city police and fire pensions.

The law was effectively a payback for unions which endorsed Bush over Democrat Buddy MacKay in the 1998 governor’s race.

Pit bull-Chihuahua pension mix springs to life in House

Thursday, April 24th, 2014 by John Kennedy

The House tentatively approved a proposal one Democrat earlier condemned as “marrying a pit bull and a Chihuahua,” a combination that would rewrite the Florida Retirement System and local police and fire pensions.

Over fierce opposition from public employees’ unions, House Republicans have been intent on overhauling the $144 billion FRS, used by 622,000 government workers. But enough Senate Republicans have refused to go along with earlier pitches that House leaders are now turning to a new approach.

The House Thursday combined the FRS overhaul with another, more popular move that applies new standards to the local government plans. The city proposal has been hammered out after several years of off-and-on talks between police and fire unions and municipal officials.

Democrats see the approach as a desperate effort to force the Senate’s hand. Rep. Dwyane Taylor, D-Daytona Beach, last week likened it to unorthodox dog breeding.

Rep. Jim Boyd, R-Bradenton, sponsor of the dual proposal (CS/HB 7181), defended it.

“The common thread is public pensions,” Boyd told House Democrats, who peppered him with questions Thursday. “We feel the best course of action is to combine two bills into one.”

Senate pension overhaul hits early bumps

Tuesday, February 18th, 2014 by John Kennedy

The latest attempt Tuesday by Republican lawmakers to revamp the pension plan used by 623,000 Florida public employees got off to a shaky start.

The Senate Community Affairs Committee argued at length over the proposed overhaul by Chairman Wilton Simpson, R-Trilby, which relies on introducing a new cash-balance fund for new hires.

When put to a vote, the measure barely squeaked through Simpson’s own committee, 5-4.

With even a top Senate Republican, Jack Latvala, R-Clearwater, voting against it, the odds suddenly seemed to turn against any change happening to the Florida Retirement System this election year.

Simpson acknowledged the legislation (SPB 7046) faced a steep climb ahead in the Senate and House, which is expected soon to unveil its own proposal.

“I think it suggests that this will be a very well-debated bill,” Simpson said. “I’ve got more convincing to do.”

Brogan’s early exit means he’s no longer a million-dollar man

Friday, August 9th, 2013 by John Kennedy

State University System Chancellor Frank Brogan, a former Florida Atlantic University president, acknowledged he would “take a hit,” with his move to a similar job in Pennsylvania.

He’s taking a salary cut: from $357,000 to $327,500 a year.

But the 35-year government employee will find the pay reduction cushioned by $16,029-a-month in pension payments once he leaves the Florida system Oct. 1, according to the state’s Department of Management Services, which oversees the Florida Retirement System.

Brogan’s departure is a mixed bag. Three years ago, Brogan enrolled in the Deferred Retirement Option Program (DROP) and had been in line for a one-time payout of $1.1 million if he completed the program’s five-year wind-down of his career.

By leaving two years early, Brogan instead gets the monthly pension for two years, then a $622,109 payment. All told, the longtime educator and one-time lieutenant governor will lose $102,286 off what would have been his million-dollar one-time payout, according to DMS.

Senate pension plan drawing some union fans

Thursday, March 28th, 2013 by John Kennedy

Although most Democrats remain opposed, unions came around Thursday to support the Senate’s plan to revamp the Florida Retirement System — a milder version of the overhaul pushed by House Speaker Will Weatherford and fellow Republicans in that chamber.

The Senate plan (CS/SB 1392) cleared the Appropriations Committee 13-5, with Sen. Jeremy Ring of Margate the lone Democrat joining with the Republican majority.

The measure, sponsored by Sen. Wilton Simpson, R-Trilby, is aimed at encouraging teachers, firefighters, law enforcement officials and others public employees to abandon the traditional pension plan in favor of an investment retirement plan.

But the only workers required to join the 401(k)-styled plan would be new hires in senior management categories, a smaller slice which includes mostly higher-paid employees.

Matt Puckett, lobbyist for the Florida Police Benevolent Association, endorsed the proposal — saying the legislation would “get pensions out of the headlines.”

“We will no longer have guaranteed pensions to people who will get $100,000 or more in salaries,” Puckett said.

The $136 billion Florida Retirement System has more than 620,000 active members. The House is looking to have all new employees join the investment plan.

The House requirement would still affect those currently in the traditional pension, analysts have said. Investment strategies will change, analysts note, as the defined benefit pension caters increasingly to an older, smaller workforce.

House Democrats and unions have locked in opposition to Weatherford’s approach.

But with Ring and several union representatives supporting the Senate version, it appears some critics of the House proposal are looking to strengthen Simpson’s hand for looming end-of-session dealmaking between the two chambers.

 

Union research shows pension overhaul will cost workers, taxpayers

Tuesday, March 26th, 2013 by John Kennedy

Public employee unions fighting the House pension overhaul rolled out research Tuesday that says the move will cost taxpayers more — challenging the view of House Speaker Will Weatherford and other proponents that closing the traditional plan to new workers will reduce state costs.

A report by Keystone Research Council, a Pennsylvania think tank whose directors include a number of union leaders, underscores many of the points raised by Florida opponents.

A key provision is that with a shrinking pool of public employees in the defined benefit plan, investment strategies will change, becoming less risky and less likely to earn sizable returns.

The change will force those in the plan to contribute more to offset more modest returns. Public employers, including school boards, cities and the state, will also have to pay more to cover the cost of the rising number of retirees still in the traditional pension, the report concluded.

“The bottom line,” said Sarabeth Snuggs, co-author of Keystone’s report and a former Florida Retirement System administrator, “is that the House proposal means higher costs for taxpayers and lower-quality pensions for employees, hurting businesses that depend on the buying power of retirees.”

The House voted 73-43 along party lines Friday for the measure (CS/HB 7011), which would close the traditional pension plan to new employees. Beginning Jan. 1, new hires seeking a retirement account could instead only join a defined contribution investment plan similar to a 401(k) plan available to many private sector workers.

The Post reported that the  legislation may be rooted in the American Legislative Exchance Council, the advocacy group that helps corporations and conservative interest groups write bills for legislatures across the country.

Dozens of Florida Republican lawmakers gathered at an ALEC conference in New Orleans in 2011, where a pitch for pension reform was a central part of the three-day gathering. Among those attending were Weatherford, R-Wesley Chapel, and Rep. Jason Brodeur, R-Sanford, the bill’s sponsor.

ALEC has advocated changes in environmental and labor laws, voter ID measures and pro-gun laws such as the “stand your ground” legislation, which came into focus following Trayvon Martin’s shooting death last year in Central Florida.

In Florida, where free-market conservative Republicans control every phase of state government, ALEC’s model bills have proved a touchstone for many policies.

But as the legislative session nears its midpoint in Florida, the Republican-led Senate isn’t looking to go as far as its House counterparts.

Instead, Sen. Wilton Simpson, R-Trilby, is advancing a measure (CS/SB 1392) aimed chiefly at encouraging workers to join the investment plan. But the Senate would keep the traditional, defined benefit pension open to them.

“We don’t want to make a mistake. It’s a lot of money, and people’s livelihoods are at stake,” Simpson told the Post.

House OK’s pension overhaul — facing troubled future

Friday, March 22nd, 2013 by John Kennedy

After fierce debate Friday between ruling Republicans and union-allied Democrats, the House approves an overhaul of the Florida Retirement System, the pension fund used by more than 620,000 teachers, law enforcement and other public employees.

Breaking along party lines, the House voted 74-42 for the measure (CS/HB 7011), which would close the traditional pension plan to new employees. New hires seeking a retirement account would instead be required to join a defined contribution investment plan beginning Jan. 1.

The legislation is a top priority of House Speaker Will Weatherford, R-Wesley Chapel, who maintains that the Florida Retirement System is underfunded and will command increasing millions of dollars from Florida taxpayers to keep it afloat in future years, a stance disputed by many experts.

“It’s fair. It’s fiscally responsible. And it’s time to act,” said Rep. Ritch Workman, R-Melbourne.

But Democrats accused House Republicans of using scare tactics to push through a proposal which already has been rejected by fellow Republicans in the Senate.

“You’re using boogyman tactics of how the taxpayers will save money….it’s absolutely false,” said Rep. Dwayne Taylor, D-Daytona Beach.

Democrats said the legislation is not only unnecessary but potentially dangerous to the $136 billion pension fund, which is used by more than 623,000 state and local government workers and another 335,000 retirees.

The FRS is considered 87 percent funded, with most analysts acknowledging that 80 percent is the benchmark for a fund considered to be on solid financial footing.

Republican leaders, however, say that unfunded actuarial liability is $19.2 billion — a level they say is alarming. Still, those defending the fund say the shortfall exists only if every pensioner demanded their full payments at once, which analysts say would never happen.

 

Senator calls House approach to pension “wrong,” “ill-conceived”

Wednesday, March 20th, 2013 by John Kennedy

The legislative standoff over revamping the Florida Retirement System hardened Wednesday — with Sen. Jack Latvala deriding the House approach as “wrong” and “ill-conceived.”

The Senate Community Affairs Committee approved its more modest approach to the $136 billion fund on a 5-3 party-line vote, with Democrats opposed.

The Senate proposal (CS/SB 1392)  by Sen. Wilton Simpson, R-Trilby, would give new public employees an incentive by cutting their payroll contributions to 2 percent if they join the state’s 401(k) styled investment plan.

If workers choose the traditional, defined benefit pension plan, they’d pay 3 percent. The only new workers required to join the investment plan would be senior managers, under Simpson’s bill.

The House, by contrast, is looking to close the Florida Retirement System’s defined benefit plan to new employees. The legislation (CS/HB 7011) is expected to clear the House on Friday — over opposition from outnumbered Democrats, who are siding with union allies who are fighting the changes.

The legislation is a top priority of House Speaker Will Weatherford, R-Wesley Chapel, who maintains that the FRS is underfunded and will command increasing millions of dollars from Florida taxpayers to keep it afloat in future years, a stance disputed by many experts.

The Senate’s Simpson also downplays House warnings about the state of the pension plan.  He also told fellow senators “it would be a cold day,” before he would fold and go along with the House approach.

 

House-Senate split on pension hints at deal-making to come

Thursday, March 14th, 2013 by John Kennedy

An effort by leading House Republicans to close the Florida Retirement System’s traditional pension plan to new employees cleared its final committee stop Thursday — after undergoing some changes that did little to ease overwhelming opposition from public workers’ unions.

Rep. Jason Brodeur, R-Sanford, endorsed an amendment that continues to make new hires eligible for disability and death benefits — a provision whose earlier absence had infuriated police and firefighter unions.

More than 60 opponents of the legislation — many police and firefighters in uniform — signed up to speak against the bill (CS/HB 7011) which cleared the State Affairs Committee on a 12-5 partyline vote. But restoring the disability and death benefits didn’t soften their criticism of the bill.

Democrats were locked in opposition to the measure.

“There’s no reason for it,” said Rep. Dwayne Taylor, D-Daytona Beach. “It defies logic. This is a bad, bad, bad idea.”

New hires seeking a retirement account would instead be required to join a defined contribution investment plan beginning Jan. 1.

The legislation is a top priority of House Speaker Will Weatherford, R-Wesley Chapel, who maintains that the FRS is underfunded and will command increasing millions of dollars from Florida taxpayers to keep it afloat in future years, a
stance disputed by many experts.

Republicans on the committee said it was important for the state to act swiftly.

“This plan will decrease the financial risk to our taxpayers,” said Rep. Jake Raburn, R-Lithia.

But opponents warned that the legislation is not only unnecessary, it’s potentially dangerous. The $126 billion pension fund is used by more than 623,000 state and local government workers and another 335,000 retirees.

The FRS is considered 87 percent funded. Most analysts acknowledge that 80 percent is the benchmark for a fund considered to be on solid financial footing.

Republican leaders, however, say that unfunded actuarial liability is $19.2 billion — a level they say is alarming.

Still, those defending the fund say the shortfall would exist only if every pensioner demanded their full payments at once, which analysts say would never happen.

While the measure could head to the House floor as early as next week, the Republican-led Senate seems to have little interest in going that far.

A more modest change, proposed by Sen. Wilton Simpson, R-Trilby, advanced Thursday in the Senate’s Governmental Oversight and Accountability Committee.

The bill (SB1392) would give new public employees an incentive by cutting their payroll contributions to 2 percent if they join the investment plan. If they choose the traditional plan, they’d pay 3 percent.

The only new workers required to join the investment plan would be senior managers, under Simpson’s bill. Senate President Don Gaetz, R-Niceville, has come in favor of Simpson’s proposal.

The division between the House and Senate makes it likely that some kind of compromise will have to be forged for any FRS changes to clear the Legislature this spring.

“It looks like we’ll have to sit down and talk to Sen. Simpson,” Brodeur conceded after the House vote.

House plan to close traditional pension to new workers carries costs, study concludes

Friday, February 15th, 2013 by John Kennedy

The Florida Retirement System, used by more than 600,000 state workers, teachers, police officers and firefighters, would change dramatically under a state House proposal to close the plan’s traditional pension to new employees, according to a state study released Friday night.

The analysis by Milliman, a Virginia-based actuarial firm, concluded that the move would likely increase the plan’s cost for employees. These workers began contributing 3 percent of their pay to take part in the plan for the first time, beginning in 2011.

Also, within as little as seven years, more employees could belong to the 401(k)-style investment plan than the traditional defined benefit plan. The shift  would contribute to a likely change in how the $122 billion FRS invests its holdings,  concluded Milliman, who completed the report for the state’s Department of Management Services.

House Speaker Will Weatherford, R-Wesley Chapel, who is spearheading the pension change, said the report will help lawmakers map a course for the FRS when the legislative session begins next month.

“We are reviewing the study received from the actuary and will derive from it the fiscal impact of our plan to reform Florida’s outdated pension system,” Weatherford said. “Ultimately, we believe that reducing the taxpayer exposure to Florida’s pension liability and creating greater fiscal predictability in our budget is in the best interest of all Floridians.”

The pension fund currently is 87 percent funded — with Gov. Rick Scott recommending in his budget that state lawmakers add $552 million in taxpayer money to fund the state’s share of the fund’s liability.

It’s those payments Weatherford and other supporters of the plan would like to see reduced. Florida’s fund is currently considered strong by most analysts, with the recommended minimum level of funding usually considered to be 80 percent.

Unions oppose ending the defined benefit option for new employees.

They say the move would undermine a strong pension plan and that it is driven by politics — with the Republican-controlled Legislature intent on weakening union strength in Florida.

“This is more about ideology than money,” said Rich Templin, spokesman for the AFL-CIO.

The Florida Retirement System has 623,011 currently employed members, including teachers, state workers, and many local government employees, police officers and firefighters.

Within the system, workers currently can choose between the traditional pension or, for the past decade, an optional 401(k)-like plan. The pension remains the favorite, though, with more than 500,00 employees enrolled, compared with only about 100,000 in the inverstment plan.

The pension fund has another 334,682 retirees enrolled who already collect benefits.

Closing the plan to new employees will rob the traditional pension fund of its stream of new dollars, Milliman concluded. It will also create a system where only older workers looking forward to gaining larger pensions, remain in the fund.

 

House committee takes hurry-up action on pension overhaul

Thursday, February 7th, 2013 by John Kennedy

A House panel raced ahead Thursday with one of House Speaker Will Weatherford’s top priorities — closing the state’s traditional pension plan to new hires — over opposition from union representatives who warn the move could undermine the Florida Retirement System.

The hurry-up action by the usually conservative Republican House also comes a week before a study is expected to be completed aimed at gauging the legislation’s financial impact.

The House Governmental Operations Subcommittee approved the measure on an 8-3 vote, divided on party lines. Democrats critical of the overhaul sided with union officials who said that closing the defined benefit portion of the Florida Retirement System to new employees would jeopardize the plan for those now in the plan.

New hires seeking a pension plan would be forced to join a defined contribution, 401(k)-styled investment plan beginning Jan. 1, under the legislation. The bill also would bar new employees from eligibility for disability benefits — a restriction fiercely opposed by police and fire unions.

“There’s concern about the unknown,” said Matt Puckett, representing the Florida Police Benevolent Association. “That’s what this is all about. There’s risk in closing the plan.”

Chairman Jason Brodeur, R-Sanford, acknowledged lawmakers will have a better idea about the financial affects of the potential change when the state’s Department of Management Services completes a study next week. But it’s clear that Weatherford’s push for the change helped drive Thursday’s vote.

“These sensible reforms will offer a sound investment plan to future employees, while at the same time being realistic about the commitments our state government can continue to make,” Brodeur said after the vote.

The Florida Retirement System has 623,011 currently employed members, including teachers, state workers, police officers and firefighters. Another 334,682 are already retired and collecting benefits.

Weatherford, R-Wesley Chapel, has clamored for revamping the system, warning that state payments into the pension fund will continue to escalate. The $126 billion FRS currently is 87 percent funded — with Gov. Rick Scott recommending in his budget that state lawmakers add $552 million in taxpayer money to fund the state’s share of the fund’s liability.

It’s those payments Weatherford and other supporters of the plan would like to see reduced. Florida’s fund is currently considered strong by most analysts, with a minimum level of funding put at 80 percent.

But that could change, union officials told lawmakers.

“Without new people coming in, it loses its stability and loses more stability over time,” said Rich Templin of the AFL-CIO.

Florida’s pension plans have proved a target for Scott and the state’s Republican leadership.

Last month, the Florida Supreme Court narrowly upheld the Legislature’s decision in 2011 to require workers to contribute 3 percent of their pay to participate in the FRS. The $2 billion collected from those payments the past two years allowed lawmakers to have more cash to plug holes elsewhere in the state budget.

Unions unsuccesfully challenged the law claiming it violated contractual rights granted public employees in 1974, when the pension was converted to a “noncontributory system.”

While the House is focused on the FRS, the Senate is considering legislation aimed at revising laws governing hundreds of municipal pension across Florida.

 

Scott’s budget gets another gentle review — this time from Senate

Wednesday, February 6th, 2013 by John Kennedy

A day after the House budget committee gave Gov. Rick Scott’s proposed $74.2 billion state spending plan a mostly gentle review, its Senate counterpart followed suit Wednesday — although a few stylistic differences emerged.

Senators seemed more concerned than the House about the state maintaining fat reserve funds — a particular focus of Senate Appropriations Chairman Joe Negron, R-Stuart.

Sen. John Thrasher, R-St. Augustine, also extracted an acknowledgement from Scott budget director Jerry McDaniel that the Legislature could move forward with a funding boost for Florida State University similar to the $15 million extra the governor wants for University of Florida to help it achieve top 1o ranking by academic reviewers.

McDaniel also pledged that Scott’s plan for $2,500 pay increases for teachers would not interfere with local collective bargaining agreements between union representatives and county school boards.

Several counties have reached deals that require raises to be based on performance standards — which may affect how counties dole out the pay hikes sought by Scott.

“We recognize that some teachers may get $4,000; some may get $1,000,” McDaniel said.

Otherwise, the Senate panel followed a course similar to that cut Tuesday by the House budget panel. Democrats’ questions pivoted mostly on school funding and why Scott was not endorsing the Medicaid expansion authorized under the Affordable Care Act.

“We believe we have too many questions than answers,” McDaniel said, echoing comments he made a day earlier.

But McDaniel may have given some hope to health care advocates who have been looking for signs that Scott’s resistence is waning.

“He does not yet propose expansion,” McDaniel told the committee.

Scott and teachers union meet over grouper dinner — with a little history on the side

Friday, September 14th, 2012 by John Kennedy

History was the garnish to plates of grouper served Friday night at the Governor’s Mansion, when Republican Gov. Rick Scott had dinner with a half-dozen representatives of the state’s largest teachers’ union.

Both sides said the closed-door dinner meeting went well, being the first of its kind since Scott took office in January 2011. Florida Education Association President Andy Ford is expected to return for a meeting with Scott next week — this time a more traditional business huddle likely slated for Wednesday in the governor’s office, both sides said.

“I think we can always find opportunity to improve what’s on the books — especially with merit pay,” Ford said, adding, “Tonight was a good first step toward having some dialogue that probably should have happened a long time ago.”  

Scott railed against the teachers’ union during his election campaign two years ago, when the FEA was a heavy backer of Scott’s rival, vanquished Democratic gubernatorial nominee Alex Sink.

 The relationship didn’t get any warmer.

The first bill Scott signed into law as governor recast the way teachers were evaluated — making reviews more dependent on student performance. The legislation has been challenged by the union. The same session, Scott approved a measure that extracted 3 percent payments from public employees in the Florida Retirement System, the bulk of them teachers and other school board employees.

The first state budget Scott signed cut public school funding by $1.3 billion. The second spending plan restored $1 billion — but most school districts have eliminated scores of jobs.

Much of the discussion Friday pivoted around how the Florida Comprehensive Assessment Test (FCAT) is deployed both for gauging students and teachers, along with Scott and the Republican-ruled Legislature’s push to expand virtual education. The possibility of private school vouchers returning — after they were ruled unconstitutional in 2006 by the Florida Supreme Court — wasn’t on the table, Scott said.

“I’m working on this job,” Scott said, when asked why it’s taken so long to meet with FEA representatives. “Remember, as a lawyer, you’re always practicing.”

The Friday night dinner capped a week in which Scott traveled the state on a “listening tour,” meeting with parents, teachers, school superintendents and principals to discuss how Florida can improve its education system.  He was in Boca Raton on Tuesday and plans to complete his tour next week in Fort Walton Beach.

“I believe parents ought to have choice, I believe that’s good for them,” Scott said. “I believe in the public school system. I grew up in the public school system. It was good for me. The teachers had a dramatic, positive impact on the my life….Is choice good? Yeah. But let’s make sure we do it the right way. Is competition good? Sure, but let’s make sure we do it the right way.”

After bidding goodnight to Scott at the mansion door, Ford acknowledged he was “shocked” by the reachout from the governor. But he said he welcomed the dialogue. Still, he told reporters, some issues are not up for discussion.

Vouchers? “Not for us. End of story,” Ford said.

Pension battle now in hands of high court

Friday, September 7th, 2012 by John Kennedy

The battle over 3 percent payroll contributions demanded of public employees by Gov. Rick Scott and the Florida Legislature in 2011 went Friday before the state Supreme Court, with a lawyer for workers saying it violates an almost 40-year pension fund guarantee.

About $2 billion is at stake — cash lawmakers expected to draw from the payments. It was used to plug holes in last year’s budget and this year’s spending plan, which took effect July 1.

 Lawmakers also could be forced to repay $786 million already collected from employees of  the state, school boards, counties, colleges, universities and special districts if justices agree with a lower court that found the payments unconstitutional.

Ron Meyer, attorney for the Florida Education Association, the state’s largest teachers’ union, said much of the dispute turns on timing. The lower court found the move violated the constitution because it applied to all 623,000 employees in the Florida Retirement System. 

If lawmayers had sought the payments only from workers hired after the law took effect July 1 last year, they may have been on solid legal ground, Meyer conceded.

“You just can’t go back and change the deal midway,” Meyer said following arguments before the seven-member court.

Scott and lawmakers, however, say a 1981 court ruling involving the Florida Sheriffs Association, held that the Legislature could reduce the amount of benefits that would go to FRS members. Former Supreme Court Justice Raoul Cantero argued for the state before his former colleagues.

Scott called the change “common-sense public pension reform.”

“The legal question in the case is straightforward,” Scott said. “The Legislature relied on and carefully followed a thirty-year-old Florida Supreme Court case, which held that the Legislature can change the public pension system on a going-forward basis.  We therefore expect the Supreme Court to follow its own prior decision.”

 

Americans for Prosperity launches ’5 for Florida’ campaign

Friday, June 22nd, 2012 by John Kennedy

A conservative group Friday said it is launching an election-year campaign aimed at getting political candidates to endorse dramatic changes to Florida’s public pension plans, its tax system and education.

Slade O’Brien, Florida director for Americans for Prosperity, said the organization will ask the public and those running for office this year to commit to promoting its “Five for Florida,” plan.

The five issues highlighted will make Florida the “most attractive state in the nation for families, businesses and entrepreneurs,” said O’Brien, who is based in Boca Raton.

The plan is posted on www.FiveforFlorida.com. A questionnaire seeking support for the proposals also is being sent to candidates. Results are to be posted on the AFP site. 

AFP, which is supported in the project by the James Madison Institute, is calling for ending the state’s corporate income tax — a move O’Brien said will attract businesses. It would also create a level playing field for businesses when balanced with an end to corporate tax breaks and incentives.

 AFP said Florida’s current tax policy is “dictated by cronyism.”

“Floridians are really clamoring for politicians who will be honest with them,” O’Brien said.

Another plank in ”Five for Florida,” would steer all new employees in the Florida Retirement System into 401(k)-style investment plans, away from the state’s traditional pension plan. The FRS recently received strong marks from the Pew Center on the States, but the groups Friday still warned that the fund is not adequately financed and looms as a potential problem for taxpayers.

Municipal pension plans, which are generally in worse shape than the FRS, also should push new workers into the investment plans to assure longterm solvency, said O’Brien and J. Robert McClure, president and CEO of the James Madison Institute.

McClure said the proposals included in “Five for Florida,” are “another tool in the toolbox for freedom.”

 Americans for Prosperity, a grassroots activist organization, was founded by Charles Koch and part-time Palm Beacher David Koch, billionaire brothers who back of a host of conservative causes and whose Koch Industries is an oil services company.

AFP also is a mainstay of the tea party movement, which was a big supporter of Gov. Rick Scott in his 2010 election.

The pension overhaul and elimination of  the state’s corporate income tax, which brings $1.8 billion into the state treasury, have also been advanced by Scott.

Other provisions of the platform unveiled Friday include a call for expanding charter schools and virtual education, and bringing more public scrutiny to state contracting and permitting at all levels of government. If the changes limit revenue flowing into public coffers, that’s OK, O’Brien said.

“We don’t want government to grow,” he said.

Scott lawyers say judge was wrong in pension case

Monday, June 11th, 2012 by John Kennedy

A Leon County judge was wrong in ruling that Gov. Rick Scott and the Republican-ruled Legislature violated the state constitution last year by ordering 3 percent payroll contributions from public employees in the Florida Retirement System, state lawyers said in a new filing with the Florida Supreme Court.

At stake in the case before justices: close to $2 billion in the budgets of the state, counties and school districts.

Lawyers for Scott and other state officials are appealing the March ruling. Circuit Judge Jackie Fulford at the time said the state’s action overran contractual rights granted public employees in 1974, when the pension plan was converted to a “noncontributory system” for workers.

But former Justice Raoul Cantero, now a private attorney representing the state in the case, argued in a 44-page brief filed with the court that Fulford’s order ”runs contrary to decades of precedent.”

“The Legislature’s decision to modify the FRS system was fully within its prerogatives because the right of public employees to collective bargaining does not override the Legislature’s appropriations power,” Cantero wrote.

Also at the center of the state’s appeal is Fulford’s interpretation of a 1981 state Supreme Court decision involving the Florida Sheriffs Association, which pivoted on the Legislature changing benefits for future state employment. 

Cantero argued that in the Sheriffs ruling, justices held that the Legislature could reduce the amount of benefits that would go to FRS members in the future.

 But Fulford concluded that employees currently in the pension system have a property right to a noncontributory plan and that nothing in the Sheriffs’ case authorizes the Legislature to “change the fundamental nature of the plan itself.”

The lawsuit was filed last summer against Scott and other state officials on behalf of 11 public employees who are members of the retirement system. Those suing include members of the Florida Education Association, AFL-CIO, America Federation of State, County and Municipal Employees, Fraternal Order of Police and Service Employees International Union.

There are 655,000 government workers in the FRS. The Supreme Court has not yet set a date for arguments in the case.

Scott and the Legislature last year used the $1.1 billion in pension fund payments to help close a yawning budget gap. The state’s 67 counties also saved about $600 million in pension payments by having employees contribute the 3 percent.

The same payments were incorporated into the $69.9 billion state budget set to take effect July 1.

If  justices uphold the lower court’s ruling, the state has said reserves would have to be deployed to cover the lost revenue.

As part of its appeal, the state also is arguing that Fulford exceeded her authority by ordering that payments be refunded to the public employees in the FRS.

Cantero, in the state’s appeal, acknowledged that the Legislature’s decision to require pension payments to close a budget hole was controversial. But he said that justices should affirm that such actions are within the power of lawmakers –not courts, to decide.

“While reasonable people may differ about whether the Legislature should have solved the states $3.6 billion budget shortfall in part by reducing employees’ future pension benefits, such difficult policy choices are for the Legislature,” he concluded.

Pension decision heads to Supreme Court

Friday, March 16th, 2012 by John Kennedy

The fate of the Legislature’s push to make government workers in the Florida Retirement System contribute 3 percent to their pensions likely rests with the Florida Supreme Court, after an appellate court Friday certified the case to justices.

A Leon Circuit Court judge last week ruled the contribution requirement violated the state’s constitution. The state is appealing the ruling, which casts an ominous cloud over the state’s finances. The Legislature used the $1 billion in pension payments to help cover holes in both the 2011-12 and 2012-13 budgets.

The Florida Education Association, among several public employees’ unions which challenged the pension contributions, said it welcomed Supreme Court review. The First District Court of Appeal chose not to act on the case.

““We’re pleased that this case will move more quickly toward its final resolution,” said FEA President Andy Ford. “This could help hundreds of thousands of middle-class Florida families who have seen their incomes tumble while the governor and legislative leaders handed out tax giveaways to corporations.”

Fulford to state lawyers in pension case: “I disagree with you.”

Wednesday, October 26th, 2011 by John Kennedy

Lawyers for the state were grilled Wednesday by Leon Circuit Judge Jackie Fulford over the Legislature’s move to rewrite the Florida Retirement System and pull 3 percent payroll contributions from some 700,000 government workers.

Lawmakers were able to use the more than $1 billion from teachers, state workers and other public employees as savings last spring, helping cover what then was an almost $3.8 billion budget shortfall. The Florida Education Association and other public employee unions argued before Fulford that the change is an unconstitutional violation of collective bargaining guarantees. 

But attorneys Doug Hinson and David Godofsky, from the blue-chip law firm, Alston & Bird, representing the state, argued that past case law gives lawmakers authority to make such revisions — which they labeled a “modification.”

In an unusual move, Fulford left the bench to get a better look at slides Hinson was projecting on a courtroom viewing screen. En route to the floor, Fulford delivered a stunning message:

“I disagree with you,” she said.

Fulford, who last month ruled lawmakers violated the constitution by approving a massive prison privatization plan for South Florida in the budget — rather than a separate bill — said she doesn’t know how she’ll decide the pension case.  But she acknowledged having a “fundamental difference,” with the state’s interpretation of its authority.

Arguments continue this afternoon.

Haridopolos agrees to CFO Atwater’s request for public meeting on SBA investment

Thursday, October 6th, 2011 by Dara Kam

Senate President Mike Haridopolos has agreed to call in State Board of Administration executive director Ash Williams to answer questions about a $125 million investment after Chief Financial Officer Jeff Atwater, Haridopolos’ predecessor, asked for the public meeting.

Atwater, a North Palm Beach banker, asked Haridopolos on Thursday to bring Williams in to satisfy Sen. Mike Fasano’s demands for information about an investment earlier this year in hedge fund Starboard Value and Opportunity. Williams gave Fasano, R-New Port Richey, a bill for more than $10,000 in response to a public records request for documents regarding the investment, which was in the works for more than two years before the investment was made in April.

“It is my deep belief that you and the other members of the legislature, elected to represent the interests of Floridians, should have full and open access to information wherever it might reside throughout government, including the SBA,” Atwater wrote in a letter to the senate president.

Atwater also said Fasano should not be charged to review the documents and that he trusts Fasano to keep any confidential information in the records private. On Monday, Fasano asked Haridopolos to subpoena Williams and the documents or to order him to appear before a Senate committee to explain the investment and the public records charges.

“Being that the CFO is a champion of transparency and given his expertise in this realm, I plan to take his recommendation and hold a meeting that will be open to the public and ask the Director of the SBA, Ash Williams, and his staff to be available to answer any questions that the public or my fellow legislators may have about the investment, as well as the public records request,” Haridopolos, R-Merritt Island, said in a statement late Thursday. “Like CFO Atwater, it is my hope that this meeting will alleviate any questions that lawmakers or the public may have regarding this investment and the SBA, and the IAC may continue to conduct business.”

(more…)

Bondi takes over suit against NY bank

Thursday, August 11th, 2011 by John Kennedy

Attorney General Pam Bondi is taking over a whistleblower’s lawsuit against a New York bank accused of skimming millions of dollars from the state’s pension fund in a foreign currency scheme.

Bondi’s office intervened Thursday in the two-year-old lawsuit filed against Bank of New York Mellon, which was among the investment firms handling the $129 million Florida Retirement System. The lawsuit claims the BNY Mellon bought and sold foreign currency for the FRS, but added mark-ups and other fake charges that cost the state when the investments were bought and sold.

BNY Mellon has denied wrongdoing.

Bondi, however, said Thursday, “Every penny that state and local employees entrust to Florida’s pension fund is hard-earned, and we will not allow Floridians’ money to be lost due to fraudulent activity.

“Overcharging for foreign exchange transactions is essentially stealing, and any company that does so will be held accountable.”

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