Happytown: New pension fund law could cost local governments 

Counties could have to cough up $264 million to help stabilize deficit in Florida Retirement System Pension Fund

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$900 MILLION

AMOUNT TO BE CHARGED TO STATE AND LOCAL GOVERNMENT AGENCIES UNDER A NEW LAW TO STABILIZE A DEFICIT IN THE $135 BILLION FLORIDA RETIREMENT SYSTEM PENSION FUND

 

$264 MILLION

AMOUNT TO BE PAID BY THE STATE’S 67 COUNTIES, WHICH WERE NOT SUPPLEMENTED WITH ADDITIONAL REVENUES LIKE THE SCHOOL DISTRICTS AND STATE AGENCIES THAT WILL MAKE UP THE DIFFERENCE

 

$10.5 MILLION

PROJECTED EXPENSE TO ORANGE COUNTY UNDER THE LAW; MIAMI-DADE COUNTY WILL PAY $21.2 MILLION, AND HILLSBOROUGH COUNTY WILL BE RESPONSIBLE FOR $7 MILLION

 

“WE ALL KNOW THIS IS ONE OF THE MORE SOLID PENSION PROGRAMS IN THE COUNTRY. IS THAT MONEY GOING TO [FLORIDA RETIREMENT SYSTEM] TO ACTUALLY SHORE IT UP? OR IS IT A LONG-TERM STRATEGY TO PRESSURE THOSE OF US AT THE LOCAL LEVEL TO SAY WE CAN’T SUSTAIN THESE INCREASES?”
– HILLSBOROUGH COUNTY PROPERTY APPRAISER BOB HENRIQUEZ
SOURCES: THE TAMPA BAY TIMES, ORANGE COUNTY GOVERNMENT

COUNTY TREAT

This one’s got to sting. Following a legislative session that saw elected officials talking out of both sides of their mouths when it came to whether or not county rule should even exist, effectively – House Bill 655 would have it that no county can make its own rules regarding employment benefits, though it has yet to be signed by the governor (or even, reportedly, delivered to him) – it’s interesting to note that counties are now being expected to pay the piper on the state’s allegedly troubled pension program. Under the ruse of fiscal responsibility (and following the failure of an initiative to shut the pension program down altogether), legislators unanimously agreed that the $135 billion Florida Retirement System pension fund was in need of the austerity treatment, and, because the state didn’t want to cut any of its precious tax giveaways to billionaires, local government agencies should be on the hook. Senate Bill 1810 passed on the last day of session (May 3) and was quietly signed into law two weeks later. A scar was born.

As the Tampa Bay Times points out, the rolling attacks on the state’s pension system are likely part of a larger punitive crusade. It’s only been a couple of years since the Legislature mandated that public employees take an effective 3 percent pay cut to fund the perceived/predicted pension gaps, and the sky-is-falling rhetoric that convinced the House this year to pass a bill (killed by the Senate) forcing public employees into 401(k) programs on the private market showed obvious disdain for the FRS, not to mention workers and seniors. The pension program is a clear target for Republicans.

But, at least in the case of SB 1810, it’s not as clear as the votes would have it seem. It turns out that during the floor debate on the bill, some were under the impression that the new law would not raise the burden on counties, mostly because that’s what they were told. When state Rep. Mike Fasano, R-New Port Richey, asked pointedly if the rates on counties would stay the same or go up, bill co-sponsor Rep. Seth McKeel, R-Lakeland, replied, “They are the same rates they were originally, sir.” Only, McKeel was referring to the rates being the “same” as they were when the bill was first heard in April, not the same as they are for counties now.

“If he had said rates were going up, it wouldn’t have just been me voting against it,” Fasano told the Times. “It’s hypocritical that the Legislature and governor say they don’t want tax increases but are pushing a bill through the back door that would require a tax increase on the local level.”

At least one county – Pinellas – is already indicating that it will consider a property tax hike to cover the expense, while others are scrambling to carve out millions from their struggling budgets. Here in Orange County, leaders don’t expect to have to bend too hard to cover our $10.5 million portion of the $900 million hole. The county, according to Randy Singh, the manager of the county’s Office of Management and Budget, will offset the cost with some of its $14.5 million in surplus funding. (The city of Orlando manages its own pensions, so the bill has no effect.)

“Obviously, we would have preferred for the rates to be lower, but fortunately, the county is in a healthy financial state to withstand this increase without any tax increase,” Singh says. Obviously.

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