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Politics

Florida Senate Passes Plan to Shore up Local Pensions

April 21, 2015 - 6:00pm

The Senate unanimously approved legislation Wednesday revamping how local pensions for police officers and firefighters are funded, bringing closer to resolution a long-running debate over the retirement plans.

The bill (SB 172), which now heads to the House, cleared the upper chamber 36-0 after less than 10 minutes of debate. It relies on a deal struck between cities and unions last year --- one that cities have backed away from after the re-election of Gov. Rick Scott in November.

The House is expected to take up its version of the legislation (HB 341) as early as Thursday. A bill could be headed to Scott's desk by the end of the week.

"Assuming we don't have a veto, we're going to pass the bill this year," said Sen. Jeremy Ring, a Margate Democrat who has worked on the proposal for several years.

"We are now at hand to finally bring some meaningful reform to local pensions in the state of Florida," said Sen. Rob Bradley, a Fleming Island Republican who has worked with Ring on the legislation.

Supporters argue that changes are needed because of concerns about the financial health of some local pension plans. Ring and Bradley pushed cities and unions to figure out a compromise last year on how local governments can use revenues from the state's tax on insurance premiums, a major source of funding for the retirement plans.

The proposal would essentially repeal existing restrictions in state law on how premium taxes are spent, so long as local governments and unions can come to agreement. If there is no agreement, the taxes would be sifted through a complex formula detailing how much should be spent on existing benefits and how much should be given to workers in a separate retirement account.

Supporters say the intricate standards for divvying up the money are meant to push governments and unions to compromise on how to spend the money instead of declaring an impasse in negotiations.

The proposal has run into resistance this year from the Florida League of Cities, which supported the bill in 2014.

At the time, both sides had reason to negotiate. Under Scott, the state Department of Management Services had issued what is known as the "Naples letter," a controversial reinterpretation of state law that gave cities a much freer hand in how they used the premium taxes --- driving unions to the bargaining table.

But critics questioned the letter's legality, and cities were concerned that Democratic gubernatorial candidate Charlie Crist might return to the old interpretation of the law if he won the election. Scott defeated Crist in the November election.

The bill's chances were boosted this year when House Speaker Steve Crisafulli, R-Merritt Island, said before the legislative session that he wouldn't insist changes to the Florida Retirement System, the pension plan for state and county employees, also be a part of any pension reform legislation. Such demands by former House Speaker Will Weatherford, R-Wesley Chapel, killed the local-pension changes in the past.

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