Municipal pension plans are stretching thinner in Florida as a
smaller workforce supports a growing number of retirees -- with prospects
bleak that funds will recover, a report released Wednesday concludes.
The Leroy Collins Institute's latest review of the plans found that while
the sluggish economy has contributed to the funds' problems, deeper woes
plague them.
"These municipal pension issues were not created overnight and can't be
changed overnight," said David Matkin, a public administration professor at
Florida State University, who studied Florida's 492 municipal pension plans
for the Tallahassee-based institute.
The problems track those facing the Social Security system or Medicare:
Too few workers supporting a growing number of retirees. If anything,
municipal budget cuts and layoffs in recent years have contributed to the
imbalance, analysts said.
The result: city commissioners must earmark a larger share of municipal
budgets for pension benefits. That means citizen services decline, Matkin
said.
"They take up a space that is demanded by other services," Matkin said.
"You have to have some budgeting tradeoffs."
A report released last November by the Leroy Collins Institute gave mixed
reviews on the health of pension plans in 100 Florida cities, with one-third
drawing 'D' or 'F' grades for being underfunded. In Palm Beach County, plans
in six cities earned failing, or near-failing grades.
Boynton Beach's police plan and Palm Beach Gardens' police and fire
pensions were among the 15 percent of municipal plans drawing F's. Various
Plans in Riviera Beach, Boca Raton, Jupiter, Boynton Beach and Lake Worth
earned D's in the Collins Institute analysis of financial strength.
But general employee pensions in Boca Raton, Delray Beach and the West
Palm Beach police pension also were named as some of the best-funded plans in
the state.
Matkin found Florida's pension slide began in the early 2000s, well
before the recession. The timing is close to when Gov. Jeb Bush and the
Republican-led Legislature approved changes that improved city police and fire
pensions.
The provision requires that growth in dollars flowing to cities from
state taxes on property insurance premiums go to additional benefits for
police officers and firefighters.
Cities next responded with such pension sweeteners as cost-of-living
adjustments, lower retirement age, or an increased "multiplier" used in
determining pensions based on years-of-service, all of which municipal
officials say have forced cities to spend hundreds of millions of dollars more
on pension costs since 1999.
The pro-union law was the first measure enacted by Bush and Republican
legislators in Florida that year, then the first GOP-controlled government of
any state that had been part of the Confederacy.
Bush had been endorsed in the 1998 governor's race by police and fire
unions over Democrat Buddy MacKay, largely on the strength of the promised
payback.
Bush eagerly signed the measure -- relishing the symbolism of making good
in a hurry on a campaign promise.
Bush and Republican leaders, however, are rarely thought of as being
allied with unions. Indeed, Bush last year co-authored an Op-Ed in the Los
Angeles Times, decrying the financial woes of states, putting much of the
blame on union contracts.
Bush's co-writer was Newt Gingrich, then a candidate for the Republican
presidential nomination.
