A Senate committee pushed forward Wednesday with a bill that would overhaul how local governments fund pensions for police officers and firefighters, hoping that a different political climate in 2014 will allow the legislation to succeed after it died in the House during the spring legislative session.
The legislation (SB 246), which won unanimous approval from the Senate Governmental Oversight and Accountability Committee, comes as cities say their pensions are dangerously underfunded and after the Department of Management Services has issued letters to several cities reinterpreting a key section of the law.
That reinterpretation gave local governments more freedom in how they used revenue generated by a tax on insurance premiums.
The proposal approved Wednesday would require retirement plans that are underfunded for future benefits by more than 20 percent to use half of any increase in insurance premium taxes over the amount they raised in 2012 to pay down that deficit. The rest could be used to fund other benefits.
Cities oppose that plan, saying the new interpretation of the state’s current law by the Department of Management Services gives them more flexibility in deciding how to use money raised by the insurance premium tax. Police and firefighters unions, though, say the plan goes too far. Until the new state interpretation of the law, new insurance tax revenues had to be used to fund additional benefits.
A similar, bipartisan bill passed the Senate last year but got bogged down in a conflict between the two chambers over the future of the Florida Retirement System, the retirement plan for other public employees.
House Speaker Will Weatherford, R-Wesley Chapel, pressed the Senate to approve a measure that would have prevented new employees from enrolling in the traditional pension plan in the Florida Retirement System and required them to join a 401(k)-style plan, but the upper chamber refused.
Sponsors say they hope to avoid getting into a similar situation when the 2014 legislative session begins in March.
“We’re very early in the process. But, in talking to my friends in the House, I am confident that we’re going to be able to decouple the municipal pension issue from the FRS issues, and we’re going be able to deal with this municipal pension issue on its own merits,” said Sen. Rob Bradley, R-Fleming Island.
Bradley has worked with Sen. Jeremy Ring, the Margate Democrat who chairs the Governmental Oversight and Accountability Committee, to craft the legislation.
Both sides of the issue are, at best, lukewarm about the idea. Kraig Conn, a lobbyist for the Florida League of Cities, rapped the proposal for essentially doing away with the part of the law that allowed for the Department of Management Services’ new interpretation.
Lawmakers are concerned that the new reading of the law could be overturned by a court.
“From the cities’ perspective we are losing the statutory basis for this current flexibility that we believe is essential to getting these pension plans back on a sound financial footing,” Conn told the committee.
Matt Puckett, executive director of the Florida Police Benevolent Association, said his group could likely work within the boundaries of the legislation, but he also said that many cities’ pension plans might look worse off than they are, considering the economic recovery that’s taking hold and the increase in the stock market in recent years.
“We think a lot of the problems can be self-correcting,” Puckett said.
–Brandon Larrabee, News Service of Florida