House Speaker Dean Cannon says state pension reform is "on the agenda." But the subject promises to be contentious, as public-sector labor unions have already ramped up their defenses.
The AFL-CIO dismisses critical reports about the retirement fund's "myths."
But across the country, states are reforming their pension programs to contain costs and bring them into line with private-sector funds, which require employee contributions.
As of Jan. 1, Florida is the only state that gives all its public workers a free ride. Amid rising budget deficits, a growing number of politicians and policymakers have concluded that Florida's old-style "defined benefit" program is a luxury that state and local governments can no longer afford.
Utah legislators made that determination last year when they replaced the state's defined-benefit pensions with a 401(k)-style plan for all new public employees. For the first time, local and state workers were required to contribute to their retirement fund.
Though the move promises to save taxpayers billions of dollars and put the state on firmer financial footing, union bosses fought the reforms. They staged public rallies threatening to defeat any lawmaker who dared to vote for it.
But when the November elections rolled around, not a single Republican who voted for the reforms lost. In fact, the Wall Street Journal noted, the GOP picked up seats.
Florida union leaders appear to be spoiling for a similar public-relations fight -- even as taxpayers clearly want their elected lawmakers to pass cost-saving measures.
While the AFL-CIO notes that state pension benefits averaging $16,000 to $23,000 a year cannot be considered extravagant, Gov. Rick Scott sees the Florida Retirement System as a $122 billion "ticking time bomb."
As of June 30, the fund had an unfunded liability of about $15 billion. Though that's a relatively low percentage of the assets, Scott and others see the liability level ballooning in the years ahead if changes aren't forthcoming.
Last year, the fund posted a $16.7 billion shortfall.
"Underfunded public pension liabilities are economic sinkholes waiting to collapse," said J. Robert McClure III, president of the James Madison Institute, a conservative research center based in Tallahassee.
Following the recent examples set by Utah, Virginia and Missouri, Scott wants all new state employees to start contributing to their pensions. Grandfathering existing employees could help to blunt union resistance and legal challenges.
But Florida's unions aren't conceding.
Florida AFL-CIO legislative and political director Rich Templin calls criticism of the existing pension system "political rhetoric and ideological posturing." Defenders of the status-quo say "defined contribution" 401(k)-style programs don't necessarily perform any better, and could do worse.
Unions tried those lines of defense in Utah, but they were routed at the polls. Floridians, who elected supermajorities of Republicans to the House and Senate, appear to be of like mind.
Cannon, in remarks on Wednesday, said the exigencies of Florida's budget require action.
There is no doubt that the road ahead is difficult, said Cannon. We know that there is no secret stash of money; no hidden account, and no politically easy, pain-free magic bullet.
"Governing in 2011 is not about choosing between programs that you like and those you dont like. With our current budget, all levels of government must responsibly make difficult choices between worthwhile ideas.
In that vein, Florida faces a fork in the road. It can leave its retirement program untouched and follow states like California, New York and Illinois where rising pension costs are squeezing other services, shutting down parks and siphoning school funds.
Or it can follow the lead of Utah and a dozen other states in implementing cost-saving pension reforms, including expense-sharing by public employees.
If there's a battle ahead, Scott is ready to fight. He campaigned on a pledge to require state workers to contribute to their pensions, and he unequivocally reiterated that promise to reporters on Wednesday.
Democrats, meantime, seem paralyzed by the debate. Doug Schoen, a political strategist and former pollster for Bill Clinton, says that's because public-employee unions have a "stranglehold" on the party.
"Working-class families are fleeing the Democratic Party en masse, a trend that is likely to continue if their own economic situation remains weak in the face of ever-higher taxes, deficits and debt.
"These working-class voters see that public employees are continuing to receive more generous benefits and enjoy greater job security than they are," Schoen wrote in a Wall Street Journal op-ed on Thursday.
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Reach Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341.
