Florida House panel approves annual budget bill

— Florida's teachers, state workers and many local government employees would see their wages shrink by 3 percent under budget measures moving in both legislative chambers, including a pair of bills that cleared a House committee Wednesday.

The House Appropriations Committee voted along party lines to approve the Republican-controlled chamber's $66.5 billion budget proposal as well as a pension bill that would require employees to pay 3 percent of their salaries into the Florida Retirement System, now fully supported by taxpayers.

Democrats opposed both measures, criticizing steep spending cuts in health care, education, transportation and other public services and arguing that Republicans were balancing the budget on the backs of public employees.

The pension vote came after the panel took public testimony from public employees, union officials and other opponents. Businesses lobbyists declared their support for the bill but did not speak.

"I try to teach my kids to call it like it is," Gainesville teacher Chris Ott told the committee. "This is a 3 percent income tax. You're taxing my income 3 percent."

The pension contribution, though, may not be the only pay cut teachers get because both chambers are planning school spending cuts. The House budget includes a reduction of $463.13, or 6.8 percent, per student. The Senate's budget bill would cut about $40 less per student.

The pension bill's sponsor, Rep. Rep. Rich Workman, R-Melbourne, argued that his proposal is far less onerous than Gov. Rick Scott's employee benefit recommendations that included a 5 percent employee retirement contribution.

"It is not a tax. You never get a tax back," Workman said. "For the first time our beneficiaries have the 3 percent funds that will go into a lock box."

Contributions would have to be returned to those who leave public employment before they retire.

The employee payments would be used to free $710 million in state funds to help reduce a $3.7 billion revenue shortfall expected during the budget year beginning July 1. They also would displace about $390 million in pension contributions made by school boards, counties and more than 400 cities and special districts.

Workman pointed out his bill (HB 1405) also does not include Scott's proposal to keep new employees out of the retirement system, which guarantees benefits, and instead offer them a defined contribution plan similar to a 401(k). Benefits from such plans vary according to how well each employee's investment choices turn out.

The House pension bill also would increase retirement ages for new hires from 62 to 65 for regular employees and from 55 to 60 for special risk workers including police and firefighters.

The legislation as well would close the Deferred Retirement Option Program, or DROP, to new employees. The program allows employees to retire and then return to work for up to five more years. Besides regular pay they can collect their retirement benefits in a lump sum plus 6 percent annual interest when their DROP period ends.

DROP supporters argued the program saves money for state and local governments because they don't have to contribute to the retirement system while workers are in DROP. They also contended DROP employees retire earlier than they would without the program, which opens jobs and promotions for younger workers.

The Senate Budget Committee will go through the same process Thursday with its appropriations and retirement bills. The Senate retirement bill goes a step beyond the House version by also reducing cost of living pension adjustments for existing employees and ending them for new hires.

The Senate's tentative budget also is about $3.3 billion bigger than the House bill, but much of that gap is due to bookkeeping differences.

Once the bills clear committee they'll be ready for floor votes in each chamber.

The House committee rejected an attempt by Democrats to remove a provision from its budget bill that would require the Department of Corrections bid out the operation of prisons and probation and parole supervision in Miami-Dade and Broward counties to private companies, subject to approval by the joint Legislative Budget Commission.

The Senate budget bill includes a similar but broader privatization provision covering an 18-county area of South Florida.

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