Florida Senate budget measure would would make public workers pay 3 percent of gross income into retirement listen03/31/11 Kate Bradshaw
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In Tallahassee the Senate Budget Committee approved a bill that would drastically change public employee retirement plans. Reports, dozens of government employees implored the panel to vote down the bill, which among other things would require them to pay three percent of their gross income into their retirement.
State Senator JD Alexander is a Republican from Lake Wales. He is the grandson of late Florida citrus magnate Ben Hill Griffin. He is great-grandson of former Florida Governor Napoleon B. Broward. A Lakeland Ledger article from 2008 lists his net worth as being in excess of $11 million. Today, he brought to committee a bill that would shrink state employee paychecks – even on the lowest wage earners – so the state can save money on the Florida Retirement System, or FRS.
"Requires each active member of the FRS to contribute 3 percent of pretax gross salary to fund retirement benefits effective July 1, 2011."
The policy would affect 655,000 public employees, whose retirement money is currently taxpayer-funded. Alexander’s plan beat out a bill that had some compromises, including a tiered approach to individual retirement contributions. Democratic Senator Jeremy Ring, the Senate’s Government Oversight and Accountability chair, had proposed exempting state employees earning under $40k annually. Workers earning between 40 and 75 thousand a year would have contributed 2 percent under that plan. Another target of Senator Alexander's was the Deferred Retirement Option Plan, or DROP. His proposal to axe the program drew groans from all sides.
Alexander and some of his colleagues complained that the DROP program was basically allowing some state employees to double dip, because it lets them collect a pension while still working. But state workers who are years out from thinking about retirement might be a little more concerned with a more short-term aspect of the measure.
"It eliminates the cost of living adjustment or COLA for service earned on or after July 1, 2011."
The retirement bill is part of a senate budget proposal amounting to nearly 70 billion dollars. It passed on a 13-8 committee vote, though some Republican lawmakers seemed to be holding their noses as they gave it a thumbs-up. Daytona Senator Evelynn Lynn said she thinks a tiered approach to retirement contributions would have been a more fair route.
"I really appreciated the fact that you had a tiered approach at one point, those people that were on that committee. I think it was a good idea but if you cannot do that and have to be, we still have the possibility of going 1 or next 2 percent, to look at that if it has to be equal across the board. Certainly I believe that would be better than what we have now."
Miami Democrat Gwen Margolis said the policy, if adopted as-is, would spark a mass exodus of state employees.
"I think that what's probably going to happen is that we're probably going to lose a lot of employees as a result of it or the reduction in personnel in government is going to be amazing."
Dozens of public employees spoke against the bill. Teacher Francesca Rector said the three percent contribution to her own retirement would cost her $100 a month – something she and her husband, a former Chrysler employee, can’t sacrifice.
"We're in the middle of a bankruptcy now. We are really strapped, we're doing everything we can, you know, to pay the bankruptcy payment on time, food, et cetera. Doing what we can to, not necessarily you know, to buy steaks."
Teacher Sharian Keys told the panel it should look to those who can still afford luxury if the state is serious about closing its budget gap.
"If you can afford to buy a yacht, you can afford to pay the taxes on it."
Florida AFL-CIO head Rich Templin did a little math before he approached the committee. He said Florida lawmakers should look at loopholes in the tax code before trying to balance the budget on the backs of the middle and working classes.
"There's a loophole that allows corporations to send all of their profits out of state to avoid paying their fair share of the corporate income tax. Close that loophole, $314 million. There's a loophole that allows S-corporations to escape all of their lawful corporate tax liability. Close that $850 million. Reinstate just the top cream of the intangibles tax, that part that only impacts about 100 families in the state of Florida, $289 million. Look at just 1 or 2 of the 51 different exemptions already identified by the House of Representatives as problematic, $476 million. That's $1.9 billion I just found you to balance the budget and I didn't even break a sweat."
Tampa Democrat Arthenia Joyner said she has no doubt that the bill would be disastrous.
Destin Republican Don Gaetz called the bill tough love. He said he’s supporting the bill at this stage to get it out of committee, but hopes it evolves down the road.
"But I will vote for this bill today as my first vote, not my last vote on this issue because we need to position ourselves to go into the debate on the floor and with our partners in the House of Representatives and with the governor on the plaza level to come up with a product that finally is faithful to those people gathered around the counter in a small business today, and gathered around their kitchen table today, who are making sacrifices in their own way in their lives as deep as the sacrifices that we're asking of public employees."
The bill is part of the Senate’s budget proposal, and it still needs approval by the full chamber. Supporters of similar legislation in the House say making state employees contribute three percent of their income to their own retirement would save the state some $720 million. It's not as harsh as Governor Rick Scott’s proposal, which would have taken a five percent chunk out of state worker paychecks.