The House Appropriations Committee on Wednesday approved HB 1405, a measure reforming pension plans for state employees -- but not requiring government workers to contribute as much of their annual salaries to the Florida Retirement System (FRS) as a similar measure in the Senate, or as much as Gov. Rick Scott wants.
The bill passed on a party-lines vote, with Republicans backing the reform and Democrats opposing it.
With Scott calling for state employees to invest in their own retirement plans, the Republican leadership controlling the House turned to Rep. Ritch Workman, R-Melbourne, the chairman of the Community and Military Affairs Subcommittee, to push the legislation. Workman spoke to the Appropriations Committee on Wednesday as part of a marathon meeting.
While Scott initially called for FRS participants to contribute 5 percent of their salaries, Workmans bill currently mandates they contribute just 3 percent. Workman called it modest from where we started.
The measure also would pull the plug on the state Deferred Retirement Option Program (DROP) for new workers and would raise the retirement age from 62 to 65.
In order to balance the budget, state government must reduce its costs, said Workman, noting that the FRS has a $16 billion shortfall. The bill is not perfect but it is a reasonable effort to reform the FRS, added Workman, noting that it will add meaningful cost savings to the state.
Workman defended the watered-down version of the initial proposal. We need to do the most modest reform we can to preserve the FRS system, he said.
Workman attempted to define what his legislation did -- and what it did not.
It does not change the current 3 percent COLA, insisted Workman. It does not change the defined benefit options of the FRS.
As they had at previous committee stops, Democrats on the committee went after Workmans proposal, attacking it on a number of grounds.
Are there problems with the current pension systems funding? demanded House Democratic Leader Ron Saunders of Key West who called the 3 percent contribution a tax.
Calling it a tax is just rhetoric, fired back Workman. It is not a tax. Most people pay into their pension fund. Every other state has employees pay into their pension fund.
Saunders replied that he would continue the conversation on the House floor when the measure is debated.
Under questioning from Rep. Leonard Bembry, D-Madison, about the need to reform the FRS, Workman said there is no immediate crisis but one is looming.
I dont believe in waiting for a problem to fix a problem, said Workman, who insisted that there will be, in the future, more retirees in the FRS than employees contributing to it. Pointing to the shortfall, Workman said the FRS will not be sound in 19 years.
More than 40 members of the audience filled out appearance cards to speak on the bill -- with the overwhelming majority opposing it. Uniformed law enforcement officers noted that the average police officer lives less than six years after retirement and defended the current FRS funding system. Leaders from the Fraternal Order of Police and the PBA told the committee that morale is dropping in police ranks across the Sunshine State and that police officers and their families are barely making ends meet as is. Teachers spoke in opposition to Workmans bill, calling it a tax on their income and broken promises. Firefighters and county employees also spoke out against the measure.
Union leadersspoke against the measure, too, arguing that it is not needed.
Weve gotten to the heart of the matter, said Rich Templin of the Florida AFL-CIO. Were not really looking at reform anymore. Were looking at balancing the state budget.
Leaders from the business community generally kept a low profile during the meeting as representatives from the Associated Industries of Florida, Florida Chamber of Commerce and the National Federal of Independent Businesses waved in support of the measure but did not speak in favor of Workmans bill.
After public testimony, Democrats voiced their opposition to the measure during debate. While some of the Democrats agreed that the measure was better than the initial proposal, they still opposed it.
I hope everyone here has listened to the people who spoke today, said Rep. Marty Kiar, D-Parkland, who insisted the FRS is most likely in no danger of failing and remains sound. Kiar maintained that Workmans proposal would hinder recruiting police officers, firefighters and teachers in Florida -- and hinder the public in the long run.
This bill partially balances the state budget by taxing the income of teachers, firefighters and police officers, said Saunders. Thats the bill.
Saunders repeated pledges of the House leadership not to raise taxes, insisting that the proposal was, in fact, an income tax.
It is not a tax, said Workman. You dont get a tax back.
Republicans defended the measure, though many of them that backed Workmans bill did not speak strongly on its behalf.
While he praised Scotts bold proposal, Rep. Seth McKeel, R-Lakeland, admitted thinking it might be challenging to get it through the House.
This bill has evolved, said McKeel, in defense of Workmans bill, which he called reasonable and sensible and doesnt go too far.
Rep. Ed Hooper, R-Clearwater, noted that he contributed 8 percent of his salary during his career as a firefighter. Hooper called the initial version a pretty onerous bill.
I now find myself accepting reality, said Hooper. Something is going to change in the pension world.
Calling it one of the hardest votes he has ever made, Hooper said that Workmans bill was much more palatable than a version in the Senate. Its the best bill in this building, said Hooper.
Rep. Marti Coley, R-Marianna, said that while the bill needs improvement in a number of areas, she will back it for now. Well continue working on those special areas, said Coley. We do have to make tough choices. Theyre unpleasant but theyre necessary.
House Bill 1405 proposes reasonable adjustments to the Florida Retirement System," insisted Workman. "These adjustments are necessary to avoid layoffs, pay cuts and other detrimental actions that would adversely affect public employees.
These adjustments to the system will avoid more severe measures and will help modernize the Florida Retirement System," he added.
The Florida House has taken a careful and deliberate approach in examining Floridas Retirement System, evidenced by the hours of public testimony and the numerous presentations the House has heard on the subject, said McKeel.I firmly believe that House Bill 1405 makes equitable adjustments to the Florida Retirement System that not only ensures that the program will be conducted in a fiscally responsible manner, but also ensures that employees will receive the benefits they have earned and that future benefits are awarded fairly."
Reach Kevin Derby at kderby@sunshinestatenews.com or at (850) 727-0859.
