Client News
Palm Beach Post: Legislature must revisit premium tax dollar issue
Tuesday, June 07, 2011
In response to the editorial “No one worked overtime,” which criticized the Legislature for doing little to help cities with pension shortfalls, in January, the LeRoy Collins Institute at Florida State University released a report titled, “Trouble Ahead: Florida Local Governments and Retirement Obligations.”
The report revealed that many local government pension plans, not part of the Florida Retirement System, are dangerously underfunded. The study found that some cities are seeing their retirement costs exceed 50 percent of their payrolls. Many groups, including the Florida League of Cities, brought our findings to state lawmakers’ attention, hoping for solutions.
The resulting bill, SB 1128, includes some provisions that were part of our recommendations: limiting the use of overtime pay and encouraging more transparency of local retirement systems. Unfortunately, this session has also left many potential solutions off the table, including one of the most significant institute recommendations: changing the statutes surrounding premium tax dollars. These tax dollars can be used only to increase the pensions of special-risk class (police and fire) employees, whereas the institute recommended that the 1999 statute be removed or amended, so these dollars can finance current obligations.
We hope that the governor will sign SB 1128 as a good first step. But we also hope that dialogue on this important issue will continue, and that more comprehensive reforms can be addressed in the next legislative session.
JEFFREY BARTEL
Palm Beach
Editor’s note: Jeffrey Bartel is a board member of the LeRoy Collins Institute.