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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.”

 

 

Question lifted from pension rewrite: Scott likes

Saturday, April 30th, 2011 by John Kennedy

Gov. Rick Scott said Saturday that the Legislature’s move to pull 3 percent pay contributions from 655,000 teachers, firefighters, police and other government workers is a “good first step.”

Scott’s comments, issued in a news release, may signal he’s satisfied with the relatively modest steps the Legislature took on revamping the Florida Retirement System.

 Scott had proposed a far more sweeping plan — including 5 percent contributions and closing the traditional pension to new enrollees, leaving a question mark hanging over the deal agreed to by lawmakers Friday night.

But Saturday, Scott seemed ready to sign the move into law, removing the cloud of a possible veto. Still, Scott also wants more in the future — hinting chiefly at a push to make the FRS more of a 401(k)-styled investment plan, rather than a traditional, defined benefit pension.

“It is my goal to continue to modernize Florida’s retirement system until it is no longer reliant on our state’s taxpayers,” Scott said. “But I’m pleased that we’re moving in the right direction.”

Unions and enrollees in the FRS have opposed Scott and the Legislature’s rework of the pension plan, dismissing it solely as a pay cut. Scott and business groups have tried to cast the change as aimed at shoring-up the plan — but the $1.1 billion drawn from the pension employee payments and other revisions is going straight into the state budget.

Scott is still seeking a $333 million corporate income tax reduction from the Legislature — money that could be made available with the worker payments to FRS, which has been solely taxpayer financed since 1974.

Pension work nears finish line

Friday, April 29th, 2011 by John Kennedy

Plans to dramatically revamp Florida pensions at the state and city levels appeared headed Friday toward the finish line — far short of where Gov. Rick Scott and lawmakers had initially proposed.

House and Senate negotiators have settled on extracting 3 percent paycheck contributions from 655,000 teachers, police, firefighters and other government employees enrolled in the Florida Retirement System, part of an effort to pull $1.1 billion into the state’s recession-strapped budget.

But a plan to scrap the state’s Deferred Retirement Option Program (DROP) has been abandoned,  House and Senate negotiators agreed. The House had wanted to bar the lucrative early retirement program to new enrollees in July; the Senate in 2016.

But what emerged Friday night from House lead negotiator Ritch Workman, R-Melbourne, was a proposal to reduce the 6.5 percent interest rate paid on DROP benefits to 1.3 percent. The move will save $81 million, if agreed to by Sen. Lizbeth Benacquisto, R-Wellington, the Senate’s lead negotiator on the Florida Retirement System.

Among other changes nearing agreement are a plan to increase the retirement age for new enrollees in the FRS from age 62 to 65.  An existing 3 percent cost-of-living adjustment would be eliminated for service earned after July 1, with Workman saying the goal being that it would be reinstated in 2016.

That change save $404.8 million, analysts said.

Meanwhile, plans to revamp municipal pensions also have been scaled-back. (more…)

Senate approves state worker pension plan contribution

Thursday, April 7th, 2011 by Dara Kam

State workers would have to contribute between 2 and 6 percent of their annual salaries to their pension plans under an angst-ridden measure approved by the Florida Senate by a 26-13 vote this afternoon.

“I wish we didn’t have to go there. but I think it’s the responsible thing to do when you look at the broad set of issues,” Senate budget chief J.D. Alexander, R-Lake Wales, apologized before the vote.

The chamber also approved an amendment requiring lawmakers and statewide elected officials to kick in slightly more. They’d have to pay in 7 percent of their annual earnings above $50,000 towards their retirement plans.

Senate breaks with House on pensions

Wednesday, April 6th, 2011 by John Kennedy

Dueling budget plans were poised for votes Thursday in the House and Senate – a milestone for lawmakers still far from consensus and struggling to close an almost $3.8 billion budget shortfall.

But during almost daylong debate Wednesday, the Senate made the most striking move – breaking with the House on making 655,000 teachers, police, firefighters and other government workers contribute 3 percent of their pay to the state’s retirement plan.

Instead, senators rolled out an alternate approach, requiring 2 percent to 6 percent contributions. Supporters said the plan would be easier on lower-income employees – the bulk of those enrolled in the Florida Retirement System.

“Our intention is not to run (costs) up higher than it has to be,” said Senate Budget Chief J.D. Alexander, R-Lake Wales.

Sen. Don Gaetz, R-Niceville, is expected Thursday to revive his call for making elected officials pay 7 percent into the retirement system.

 The move drew lengthy debate Wednesday – but a vote was postponed, when Sens. Evelyn Lynn, R-Ormond Beach, and Arthenia Joyner, D-Tampa, argued against the higher rate.

Paging Mr. Zuckerberg: Scott’s first FB townhall rough

Tuesday, March 22nd, 2011 by John Kennedy

In a social network experience marked by little socializing but plenty of network snafus, Gov. Rick Scott held his first Facebook townhall Tuesday night answering a few questions from the hundreds pelted at him.

Most of the Internet crowd was rough. The governor was quizzed about his recommended cuts to schools, merit pay for teachers, reducing pensions, and his reluctance to engage the conventional media.

One  Facebook friend from Tampa, Tony Cona, wrote the governor saying, “I’m taking bets right now that in the end you will prove to be the worse thing that ever happened to the state of Florida.”

As he did with a Twitter town hall a few weeks ago, Scott sidestepped his toughest critics. But he did try to defend some of his policies.

While the governor has gotten heat for blocking implementation of a prescription drug database to combat pill mills flourishing in South Florida, Scott on Facebook voiced sympathy.

“This is a significant (problem) for the State. A friend of mine just lost his daughter. We need to focus on the distribution of “narcotics and close down pill mills that are improperly distributing prescriptions,” Scott wrote.

The governor also pushed back in support of his and the Legislature’s support for tying teacher pay to student performance.

“My experience with teachers is they would like to be measured, the measurement need to be fair, and the most effective teachers need to be rewarded with both recognition and better pay,” Scott responded. (more…)

Rallies from left to right mark session opening

Friday, March 4th, 2011 by John Kennedy

Organizers across the political spectrum Friday began taking aim at the state Capitol for next week’s opening of the two-month legislative session.

The Facebook-drive Awake The State protest has about 30 rallies planned Tuesday from Key West to Pensacola — with critics of Gov. Rick Scott and the Republican-led Legislature’s budget-cutting the focus.

 Teachers, government employees, cops and firefighters form the core of those pushing back against proposed pension overhauls, but expected reductions in schools and health-care programs are drawing more opponents, said Damien Filer of Progress Florida.

“I’ve heard from a lot of people who say, `this is going to be my first rally of any kind,’” Filer said. “I’ll be interested to see what kind of momentum remains among people after next week.”

A West Palm Beach rally is planned from 4 p.m. to 7 p.m., Tuesday, in the 100 block of Clematis Street.

Tea Party activists expect to counter-punch, with several thousand Scott supporters expected in Tallahassee. (more…)

UPDATE: Sink calls Scott deceptive, irresponsible for ‘scaring our retirees’

Tuesday, September 28th, 2010 by Dara Kam

UPDATE: A spokesman for Rick Scott’s campaign responded to Alex Sink’s rant about her GOP opponent Scott’s attack ads, paid for by the Republican Party of Florida.

“As the St Petersburg Times reported, CFO Sink never declared a potential conflict and supported a no-bid contract to her former employer. Instead of looking for a correction from the St Petersburg Times, Sink is trying to draw attention from valid questions over her integrity and competence,” Scott campaign spokesman Joe Kildea said in an e-mail.

As far as her accusation that Scott is scaring pensioners, Kildea wrote: “She is trying to draw attention away from the facts (as reported in the St Pete. Times)”

Chief Financial Officer and Democrat governor hopeful Alex Sink went on a rant in response to questions about her GOP opponent Rick Scott’s attack ads accusing her of benefiting from a no-bid contract that went to her former employer and being responsible for the state pension fund’s $23 billion loss three years ago.

“You know that’s ridiculous,” Sink, a trustee along with Gov. Charlie Crist and Attorney General Bill McCollum of Florida’s State Board of Administration, which handles pension funds for state and municipal workers.

“The whole market almost collapsed. Everybody’s 401K took a dive. And the good news is that independent authorities call the Florida pension fund one of the strongest investment pension funds in the country.
We are one of the strongest public pension funds in the country. He is out there scaring our retirees into thinking that their pensions are at risk. He’s irresponsible and shouldn’t be doing it.”

Sink was even more incensed over an ad accusing her of voting to give former employer Bank of America a no-bid contract when she may have held stock in the company. The Republican Party of Florida paid for both of the television ads.

(more…)

Scott slams Sink with new ads

Monday, September 27th, 2010 by Dara Kam

GOP gubernatorial candidate Rick Scott’s campaign released two new ads attacking his Democrat opponent Chief Financial Officer Alex Sink accusing her of steering no-bid contracts to her former employer and slamming her for poor oversight of the state’s pension fund.

Sink spent more than two decades as a banker and ended her career as the head of Bank of America’s Florida operations.

One of the ads accuses Sink of steering at least $770,000 to Bank of America and its subsidiaries in her role as a member of the board of trustees that oversees the State Board of Administration. Sink sits on the board with fellow Cabinet members Attorney General Bill McCollum and Gov. Charlie Crist.

Sink has said she did not declare a conflict of interest in voting on matters affecting her former employer because her investments are in a blind trust.

(more…)

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