Florida House panel OKs multi-billion-dollar boost to state pensions

A Florida House committee on Thursday passed it unanimously. suggestion It would increase pensions for about 1 million state employees and retirees while increasing the annual cost of living by 3%.

The cost of living allowance (COLA) was abolished in 2011 during the Great Recession.

Members of the House Government Operations subcommittee were unfazed by the bill’s estimated $2 billion price tag, saying it was the cost of Congress keeping its promise.

The cost has given lawmakers little pause, and the committee has warmly welcomed the bill (HB151) Rep. Demi Busatta Cabrera (R-Miami-Dade) had a labor lobbyist tell lawmakers, “Good things seem to happen when I remain silent, so I rarely have anything to say.” Ta.

The Florida Retirement System provides pension benefits to state, county, and city employees. Last year, it paid out $12 billion in benefits to more than 400,000 retired teachers, bus drivers, firefighters and office workers.

Before:State pensions for Florida public employees could increase under new law

To help balance state and local government budgets during the economic downturn, lawmakers have vowed to abolish COLAs starting in 2010 and reconsider the issue in five years.

“A quick history lesson, folks: That never happened,” said Rep. Chuck Brannan (R-McClenny). He was an investigator for the Baker County Sheriff’s Office when the repeal was passed and called on lawmakers to stop it.

The legislation immediately increases monthly pension benefits for 151,000 retirees and pension COLAs for all current workers.

Pensions: Inflation erodes cost-of-living increases.

Since 2011, inflation has eroded more than a third of the purchasing power of a dollar. For example, without a COLA, his average FRS pension in 2011 was $18,625, which would result in a loss of approximately $7,000 in purchasing power by 2023.

Rep. Doug Bankson (R-Apopka) was quick to support the bill, telling his colleagues, “We can’t balance the budget because of the people who paved the way for us.”

The James Madison Institute, a Tallahassee-based public policy think tank, and Americans for Prosperity, part of the Koch Network, oppose the measure. AFP’s Christopher Stramberg told lawmakers that his organization values public servants and believes they should be properly compensated, but that Cabrera’s bill would eliminate the full FRS. He said it would jeopardize more than a decade of work to get funding back on track.

With $184 billion in assets, the FRS would have enough money to pay 82% of its debts even if all 629,000 working members retired at once.The remaining 18% is the so-called unfunded liability 38 billion dollars. Because everyone retires at different times, financial experts consider a pension plan that is at least 80% funded to be healthy.

With billions of dollars in debt, reinstated COLA bills will continue to grow as more workers retire, Stramberg warned. He would be binding future lawmakers to these costs. ”

State agencies, counties, school boards, state universities, colleges, and local governments would share the costs. County pension costs would increase by $863 million, the school board would increase by $796 million, and the state budget would absorb a $331 million hit.

MP: Where will the money come from?

Rep. Keith Truenow (R-Tavares) asked Cabrera where that money would come from.

“I know you’re worried about the fiscal costs,” Cabrera said as he flipped through his portfolio and pulled out a page showing how much money the state had allocated to Trunow’s home Lake County in sales tax. Ta. In 2020 alone he increased by 24% and since 2019 he increased by 45%.

Cabrera pointed out that various lawmakers and AFP’s Stranberg have been bombarding public servants with platitudes about evaluating them and thanking them for their work.

“But that doesn’t help someone pay the costs of inflation. It doesn’t help someone pay the rising costs of property insurance or the rising costs of grocery stores and gas stations,” Cabrera said. Told.

She pledged to maintain the FRS as one of the healthiest pension systems in the country. Committee Chairman Rep. Spencer Roach (R-Fort Myers) also promised lawmakers a thorough actuarial analysis of the bill before its next committee session.

Mr. Brannan acknowledged to the committee that he collects state pensions but is still frustrated by the 2011 changes, which cost him about $300 a year. But he also noted that his father, a Florida Highway Patrol trooper, had to go back to work after retirement, and that his grandmother earned little money working at a state hospital.

“Let’s get it right,” Brannan said.

The bill’s next stop is the House Appropriations Committee. A hearing on the bill (SB 242) in the Senate has not yet been scheduled.

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Florida House panel OKs multi-billion-dollar boost to state pensions

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