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House OK’s mashup of state and local pension plan rewrites

Friday, April 25th, 2014 by John Kennedy

A sweeping overhaul of state and local pension plans was approved 74-44 Friday by the state House, but faces long odds of clearing a Senate showing little support for changing the Florida Retirement System.

The House has mashed-up two proposals — a generally popular bill which makes changes to municipal police and fire pensions, and a controversial FRS revamp. House Republican leaders are clearly trying to get the Senate to accept the FRS change as the only way to enact the local pension change.

House Democrats blasted the tactic — and the FRS move.

“The bill is a patchwork of ideas and should be voted down,” said Rep. Carl Zimmerman, D-Palm Harbor.

But Republicans defended the move.

“This bill is about the future,” said Rep. Dennis Baxley, R-Ocala, noting the FRS change will only effect new hires. “This bill keeps the promise, but it secures the future.”

The FRS proposal is aimed at reducing the number of government workers joining the state’s traditional pension – pushing more into a 401(k)-style investment plan that is cheaper for the state to offer.

Over fierce opposition from public employees’ unions, House Republicans have been intent on overhauling the $144 billion FRS, used by 622,000 government workers and another 300,000 retirees. The largest share of those covered are teachers and county school board employees.

But enough Senate Republicans have refused to go along with earlier proposals that House leaders are now turning to a new approach.

Under the House bill, everyone hired in the elected officer or senior manager category beginning in July 2015 could only join the investment plan. All employees who fail to select a plan eight months after being hired would be put into the investment plan, not the pension as current law allows.

The measure also would increase the pension vesting period for all new employees to 10 years, up from the current 8-year standard.

The local proposal gives cities more flexibility to use the state’s insurance premium tax to bolster police and fire pension funds. The bill relaxes a 1999 law that required cities to offer new benefits with insurance tax dollars, a move that has increasingly destabilized many funds.

In a rare moment of harmony, after years of hostility over changing the 1999 law, unions and local governments have agreed on the police and fire pension change that is advancing as a stand-alone bill in the Senate.

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.”

House Republicans float late-hour pension overhaul

Friday, April 4th, 2014 by John Kennedy

The state’s traditional pension plan would be closed to senior managers and other new workers would have to wait longer to be eligible for the plan under legislation that cleared a House panel Friday on a partyline vote.

With a more aggressive overhaul of the Florida Retirement System looking dead this session, the House State Affairs Committee floated a more modest approach as the Legislature lurches into the session’s final month.

While ruling Republicans in recent years demanded changes because they viewed the $144.4 billion pension as financially unstable, the rhetoric has changed with the new proposal. The proposal’s sponsor, Rep. Jim Boyd, R-Bradenton, said the new approach is a “modernization” of the FRS.

Rep. Matt Caldwell, R-Lehigh Acres, endorsed the change while acknowledging the current pension is on solid financial footing.

“Pensions are a 20th century dinosaur in a 21st century world,” Caldwell said. “We may have the strongest dinosaur out there, but it’s still a dinosaur.”

Democrats and public employees’ unions, however,  joined in opposing the change, saying it is unwarranted.

“We are playing fast and loose with public policy,” said Rich Templin of the AFL-CIO.

House Speaker Will Weatherford, R-Wesley Chapel, and Senate President Don Gaetz, R-Niceville, have made changing the FRS one of their priority proposals this spring.

But an earlier proposed change centered on offering new employees a so-called ‘cash balance’ option instead of the traditional pension barely cleared a Senate committee and stalled in the House while a financial study was being prepared.

The late-hour plan taking shape Friday is similar to a proposal backed by the Senate last year. So there is some possibility that it may gain strength. But it looms as a potentially divisive homestretch issue in a session where ruling Republicans appear uninterested in conflicts that could damage Gov. Rick Scott’s re-election prospects this fall.

Supporters of the proposal say that a majority of public employees currently fail to stay in the system long enough to qualify for the traditional pension. They also said that the current 622,000 active members of the FRS and 348,000 retirees wouldn’t be affected by the change in the plan.

Opponents disagreed, saying that limiting some new employees from joining the traditional pension will hurt it financially in coming years.

“The defined benefit plan is going to be weaker,” said Ron Silver, a former legislator now representing the Teamsters Joint Council, whose union includes state correctional officers. “It’ll be less than what it is today.”

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.”

Gaetz and Weatherford vow to push pension overall again

Wednesday, January 29th, 2014 by John Kennedy

The Legislature’s top Republican leaders said Wednesday they are committed to making sweeping changes to the state’s pension plan — but are proposing a more nuanced approach than tried earlier.

The move comes even as Gov. Rick Scott, in his $74.2 billion budget proposal, did not renew his previous call for revamping the Florida Retirement System.

House Speaker Will Weatherford, R-Wesley Chapel, said changes are still needed to the plan used by more than 600,000 teachers, police, firefighters and other public employees.

“We have to protect ourselves from the future,” Weatherford said Wednesday at the Associated Press’ annual planning session at the state Capitol.

Senate President Don Gaetz, R-Niceville, joined Weatherford in saying that the Republican-led Legislature will work toward enacting changes that would shifting new workers joining the statewide pension system into a so-called cash balance pension plan. Both the state and the employee would contribute to the account and some level of retirement benefits would be guaranteed.

Police employees, firefighters and other emergency responders would be exempt from the change, under the Weather and Gaetz concept floated Wednesday. That could blunt some of the toughest opposition that has derailed earlier efforts to rework the FRS.

Lawmakers are worried about the rising cost of the plan, which costs the state more than $500 million a year to finance.

A cash balance approach is being advanced by Republican leaders and is portrayed as a “hybrid” plan. It would meld the best qualities of the state’s traditional pension, which provides set benefits based on salary and years of service, and a 401(k) styled investment plan, also offered within the Florida Retirement System, but subject to stock market volatility.

The Republican-led House last year pushed to force all new hires into the investment plan. But most Republicans in the Senate refused to go along, while union-allied Democrats opposed the concept in both chambers.

Progress Florida examines ALEC’s role in education

Tuesday, June 25th, 2013 by John Kennedy

Progress Florida, the liberal advocacy organization, released a report Tuesday examining the wide-ranging influence the American Legislative Exchange Council has on public education in Florida and across the nation.

ALEC, which has been criticized as a collaboration of multinational corporations and conservative lawmakers, has become a premier force behind the charter school movement, corporate voucher programs and online education, Progress Florida concludes.

“Floridians need to know who is representing, and how cozy their lawmakers are with, the for-profit education industrial complex,” said Mark Ferrulo, executive director of Progress Florida.

ALEC helped shape sweeping changes to the Florida Retirement System proposed in the state Legislature this spring. Although the plan advanced by House Speaker Will Weatherford, R-Wesley Chapel, failed to clear the Senate, Weatherford has said he expects the measure to be back next year.

ALEC also 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 the model legislation can also prove a two-way street, with ALEC’s stand-your-ground proposal shopped nationally after first being approved by Florida lawmakers.

Weatherford’s pension wish fails in Senate

Tuesday, April 30th, 2013 by John Kennedy

The Senate defeated one of House Speaker Will Weatherford’s top priorities of the session Tuesday, refusing to go along with a dramatic overhaul of the Florida Retirement System.

The 22-18 vote followed emotional speeches by several senators — including Sen. Jack Latvala, who fought back tears as he recalled a pair of state firefighters killed two years ago while battling a wildfire.

The Clearwater Republican said the men earned $26,000-a-year for the jobs that cost their lives.

Latvala said the House’s pension proposal not only diminished the service of state workers, it threatened the retirement plans of the teachers, police, firefighters and other government employees in the plan.

“We’re talking about 623,000 Florida lives,” Latvala said. “That’s who’s in this retirement system today.”

Sen. Wilton Simpson, R-Trilby, had proposed a Senate plan that included incentives for employees who chose to join the FRS’s 401(k)-style investment plan instead of its traditional pension plan.

But on Tuesday, Simpson sought to replace his approach with one favored by the House, which closed the traditional pension plan to new employees. To soften the impact, Simpson’s proposal wouldn’t take effect until January 2015, giving the state time to consider steps the improve the investment plan.

Simpson said his revised proposal would be good for younger workers — many of whom don’t work for governments long enough to qualify for the conventional pension. Shifting more workers into an investment plan also would ease the state’s pension costs, freeing more dollars for lawmakers to pump into education, health care and other programs, Simpson said.

“The more we have to put into a defined benefit plan now, the less we can do…in what our priorities are,” Simpson said.

But a majority of the Senate was clearly wary.

“This is kind of unconscionable. It’s not the right thing to do,” said Sen. Gwen Margolis, D-Miami Beach.

After the vote, Simpson said the House-Senate struggle over revamping the Florida Retirement System had ended. No changes will be made this spring.

“It’s dead. It’s over,” Simpson concluded.

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.

Judge strikes down pension payroll contributions — blows $1 billion hole in state budget

Tuesday, March 6th, 2012 by John Kennedy

Gov. Rick Scott and the Republican-ruled Legislature violated the state’s constitutional right to collective bargaining last year when it ordered 3 percent payroll contributions for 655,000 government workers who belong to the Florida Retirement System, a Leon County Circuit judge ruled Tuesday.

Judge Jackie Fulford’s ruling blows a $1 billion hole in the state’s current-year budget, while also costing the state’s 67 counties another $600 million that would now have to be repaid to employees in the pension fund. The debt, however, is likely to be put on hold once state officials appeal the ruling — which is expected quickly.

The Florida Supreme Court is likely to ultimately hear the case, attorneys for both sides have said.

In her decision, Fulford said legislation approved last spring which ordered the contributions was unconstitutional because it violated contractual rights granted employees in 1974, when the pension plan was converted to a “noncontributory system” for workers. 

“To find otherwise would mean that a contract with our state government has not meaning and that the citizens of our state can place no trust in the work of our Legislature,” Fulford said.

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.

Andy Ford, president of the Florida Education Association, the state’s largest teachers’ union, called it a “historic moment”  for labor rights.

“It proves the Florida governor and the Florida Legislature are not above the law and they have to follow the constitution,” Ford said. “Life is a series of choices and the Florida Legislature and governor have made their choices and they need to re-evaluate where they are.

“They have decided…over and over again to provide tax relief to big corporations and to those who put contributions into their campaigns. That needs to stop, they need to fund the services of the state of Florida.”

House Speaker Dean Cannon, R-Winter Park, said he disagreed with Fulford’s ruling, which he also characterized as an early step in a long legal fight. He also said lawmakers would continue to rely on cash from the FRS payroll contributions in the $70 billion budget proposal for the coming year that is poised for a final vote Friday.

 “The ruling of a trial court judge is the first and not the final step. Today’s ruling will have no immediate impact on the passage of the 2012-2013 General Appropriations Act, which the House will take up this Friday in fulfillment of our constitutional responsibility to pass a balanced budget.”



Altman v. Scott — again

Thursday, June 23rd, 2011 by John Kennedy

Republican Sen. Thad Altman, who unsuccessfully sued Gov. Rick Scott for killing the state’s high-speed rail project, swiped at his fellow Republican again Thursday — this time over legislation making 655,000 government employees contribute 3 percent of their pay to the Florida Retirement System.

Altman, R-Viera, represents Brevard County and other parts of Florida’s Space Coast, hard-hit by job losses stemming from the federal government’s closure of the Space Shuttle program. The Florida Education Association and other big labor unions sued Scott in Leon County Circuit Court this week to overturn the FRS overhaul (SB 2100).

Scott praised the legislation in a Thursday ceremonial signing in Orlando, saying it is helping modernize Florida’s pension system.

Altman, though sided with public employees in ridiculing the measure as a tax.

“It is important for government to operate efficiently and effectively,” Altman said.  “These individuals protect our quality of life, personal freedoms and insure a bright future for our children; they deserve more.

“This legislation not only hurts public employees, but is detrimental to all the citizens of Florida,” Altman said.

FEA leads union lawsuit to overturn 3 percent employee payments to retirement

Monday, June 20th, 2011 by John Kennedy

The state’s largest teachers’ union joined with other labor groups Monday in suing to overturn a new 3 percent payroll contribution for the 655,000 workers who belong to the Florida Retirement System, claiming the change violates a 37-year-old contractual agreement with public employees.

The lawsuit was filed in Leon County Circuit Court. But Ron Meyer, a lawyer for the Florida Education Association which filed the suit on behalf of 11 government workers who are members of the FRS, said it will likely wind up being settled in coming months by the Florida Supreme Court.

Meanwhile, the 3 percent contributions, which kick-in July 1, should be segregated in a state account, awaiting the  legal outcome, Meyer said. Documents requesting an injunction to set aside the money has been filed by the FEA with Circuit Judge Jackie Fulford, who has been assigned the case

“We believe a promise is a promise and the state of Florida should live by the promises it makes,” Meyer said Monday.

The Republican-ruled Florida Legislature agreed to stop the full-employer paid provision of the FRS, instead making employees pay 3 percent of their paychecks into the plan. The roughly $1 billion drawn into state coffers with the employee contributions helped lawmakers cover an almost $3.8 billion budget shortfall.

Teachers and other school personnel represent the majority of the 655,000 members of the FRS affected by the new law. But the 11 workers suing the state include members of the AFL-CIO, American Federation of State, County, and Municipal Employees (AFSCME), Fraternal Order of Police, and Service Employees International Union (SEIU).

“It’s a contractual right,” Meyer said of what the union contends lawmakers have violated. “IF you had a 30-year mortgage to buy a house, would your lender 20 years in tell you the house is going to cost 3 percent more?”

Rhetoric flies, party lines divide with budget debate

Friday, May 6th, 2011 by John Kennedy

Working into the night on the legislative session’s 60th and final day,  the House and Senate debated the $69.7 billion budget — the lone bill by law the Legislature must pass each year.

The rhetoric flew in both chambers, with the partisan lines clearly marked. A final vote isn’t expected until after 10 p.m.

Ruling Republicans praised the spending plan for closing a $3.8 billion shortfall, including no-new-taxes, and managing to avoid deep cuts to programs serving critically ill, elderly and disabled Floridians.

“Contained within this budget is the seed for a money tree,” said Rep. Lake Ray, R-Jacksonville, touting the blueprint’s economic development potential.

Democrats, though,  ridiculed the plan for cutting $1.3 billion from schools, reducing dollars for environmental programs, and imposing 3 percent pay cuts on 655,000 government employees who will have to contribute to the Florida Retirement System for the first time since 1974.

Rep.  Jeff Clemens, D-Lake Worth, has stung House Republican leaders several times this session by accusing them of “sticking it” to various segments of Floridians.

He used the phrase to criticize Republicans for enacting new pay standards for teachers, and changes Clemens and other critics said were aimed at reducing womens’ access to abortion.

“It’s a great day in the state of Florida,” Clemens told the House on Friday afternoon, “because this is the last day I can ask ‘who are we sticking it to today?’ Unfortunately, the answer is Floridians.”

State school spending heads further south

Thursday, April 28th, 2011 by John Kennedy

When the House and Senate approved separate budget proposals earlier this month which slashed public school spending by at least $1 billion, lawmakers said they were intent on boosting those dollars before session’s ends.

But wishes met reality Thursday night when school budget negotiators met for the first time and the bottom-line cut mushroomed to $1.3 billion. Per-student funding would drop an average $540 — to $6,269, a deeper reduction than earlier proposed.

Senate schools budget chief David Simmons, R-Altamonte Springs, said the overall cut includes an $859 million reduction stemming from the demand by lawmakers that 655,000 government workers in the Florida Retirement System, most of whom are teachers, contribute 3 percent of their pay to their pensions.

The $859 million represents a savings for school districts, which formerly paid the entire FRS share. Schools also retain $554.8 million in federal stimulus reserves distributed last fall, said Simmons, who refuted lingering pushback from educators who say it’s unfair to count that cash toward state funding.

“It’s all green money,” Simmons insisted. 

 By his calculus, schools are losing less than 1 percent of funding overall, Simmons said.

Negotiations are slated to renew tomorrow morning.

Ring: State workers not the enemy

Thursday, March 10th, 2011 by John Kennedy

A key Florida Senate panel eased back Thursday on proposed changes to the state pension plan used by 655,000 teachers and government workers, setting the stage for a likely clash with the House and Gov. Rick Scott.

In a 12-1 vote, the Governmental Oversight and Accountability Committee agreed to exempt Florida Retirement System members earning less than $40,000 from contributing to their pensions. Those whose salaries top that would pay 2 percent of their paychecks up to $75,000, when the contribution rate would jump to 4 percent.

Sen. Jeremy Ring, D-Margate, sponsor of the measure and the committe chairman, said the new contributions could raise hundreds of millions of dollars.

 But the Senate plan is certain to fall far short of the $1.3 billion Scott and the House are seeking to pull into the recession ravaged budget by making all FRS employees contribute 5 percent of their salaries.

“We tried our hardest and our best not to demonize state workers,” Ring said. “This committee does not believe state workers are the enemy.”

Scott says pension contribution phase-in a no-go

Monday, February 14th, 2011 by Dara Kam

Gov. Rick Scott rejected some GOP lawmakers proposal to phase-in a revamp of the state’s pension system.

Scott’s proposed having state workers kick in 5 percent of their salaries to their pension plans, splitting the 10 percent the state now pays for. That would amount to a 5 percent salary cut for the state’s public school employees, who make up nearly half of the Florida Retirement System.

Senate Education Appropriations Committee Chairman David Simmons said he wants to see the pension reform eased in over more than one year so that beginning teachers won’t get a pay cut while the state’s still struggling to come out of a recession.

Scott says nope.

“It’s only fair. The private sector, they fund their retirement benefits so the public sector ought to be doing the same thing,” Scott said. Asked if he was willing to negotiate on the phase-in, Scott’s response was terse: “No.”

State lost $250 million on NYC real estate deal

Tuesday, September 1st, 2009 by Dara Kam

Florida's $250 million investment in Peter Cooper Village in New York City has turned into a total loss, officials said today.

Florida's $250 million investment in Peter Cooper Village in New York City has turned into a total loss, officials said today.

Florida lost $250 million on a 2007 investment in a Manhattan apartment building, the head of the State Board of Administration told the panel overseeing the board this morning.

Peter Cooper Village in NYC is part of the state’s $99.6 billion portfolio that makes up the state’s pension plan.

The state invested $250 million in the apartment complex, where monthly rents range from $2,625 to $8,333, according to the development’s website.

Less than two years later, the value of the investment is zero, Williams told Gov. Charlie Crist, CFO Alex Sink and AG Bill McCollum, who oversee the SBA.

“We think we’re carrying that investment as a zero on our books,” Williams said.

This morning is the first of the quarterly meetings on the state’s investments requested by Sink that the SBA will give to the panel. (more…)

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