Pension Reform Passes House Committee
A new version a House pension package seems to have brought local governments and unions closer together, with opponents of the measure saying Thursday the new outline was approaching something both sides could support.
The new version of the bill (HB 7241), which passed the State Affairs Committee on a 12-5 vote, substantially overhauls the chamber’s last attempt to reform local pensions for firefighters and police officers. The old version would have allowed local governments to use additional proceeds from insurance premium taxes to pay for unfunded liabilities within their pensions plans.
The new proposal allows local officials to use up to half of the increase in premium tax revenues since 1997 to help cover unfunded liabilities. The remainder would go toward supplemental retirement plans.
Currently, all increases in premium tax revenues since 1997 have been devoted to providing new benefits to police officers and firefighters, but local officials have made a push to tap those dollars in what they describe as an effort to make their pension plans sustainable.
The revision also rolls back a provision opponents said would have given local governments greater control over the administrative budgets of the pension funds and another that would have affected how much overtime and unused sick and medical leave can be counted toward benefits.
Local officials hailed the agreement as a compromise that would still allow them to address pensions’ financial issues.
“It gives us a lot of freedom to fix our problems,” said Orange City Mayor Harley Strickland.
But some workers’ groups including the Police Benevolent Association said they’re still wary of the proposal, in part because the measure could affect the use of half of premium increases collected since 1997, about $30 million.
The measure is substantially different from a less sweeping Senate plan that would allow local governments with sizable unfunded liabilities to use some of the tax proceeds to fill the gap. House members said that approach was wrongheaded.
“The Senate plan, in essence, … rewards cities who were poor stewards,” said Rep. Fred Costello, R-Ormond Beach.
The bill now heads to the House floor. The Senate version (SB 1128) is awaiting floor action in that chamber.
By Brandon Larrabee