Month: January 2011

`Draconian’ cuts expected for school districts unless shortfall is filled


You thought this school year was bad?

With the federal stimulus dollars set to run out in June, next year has the potential to be a lot worse, Miami-Dade Superintendent Alberto Carvalho said.

“This will be a different school system,” he said.

That is, unless state lawmakers fill the funding gap.

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Florida House Bill 303 Withdrawn

The following is an excerpt from the page on the link:
The Florida Police Benevolent Association, Inc. persuaded its sponsor, Representative Fredrick W. Costello, to withdraw his legislation, and the parties pledged to work together in the future.

Because PBA felt the pension reforms were extreme, PBA leaders met with Representative Costello to share their concerns. Representative Costello indicated a willingness to address PBA’s issues and work together to craft legislation that helps alleviate the current budget deficit, while protecting members’ hard-earned retirement benefits.

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Senator: State needs larger cash reserves

A top state lawmaker says Florida needs to put away at least $2.4 billion in reserves to keep interest rates low on future bond offerings.


Herald/Times Tallahassee Bureau

TALLAHASSEE — The magnitude of Florida’s fiscal crisis became clearer Thursday as the Senate’s top budget-writer called for larger cash reserves to pacify Wall Street bond rating firms.

Sen. J.D. Alexander, R-Lake Wales, told members of the Senate Budget Committee that the state should sock away $2.4 billion in reserves next year, a figure equal to 10 percent of what’s raised from general taxes, to meet a guideline he said Wall Street looks for from states.

“If we have to pay more for our bonds,” Alexander said, “it’s going to cost us a lot more. Credit rating is important for us.”

When added to the existing shortfall, the state’s new budget gap is $4.8 billion.

Florida borrowed heavily over the past decade, mostly for major construction projects at colleges and universities, and total state debt ballooned to $28 billion. The state pays $2.1 billion yearly in debt payments.

The current state budget has about $1.2 billion in reserves that could be carried over to next year’s budget, so another $1.2 billion would need to be put in the bank. When you add that figure to the existing shortfall of $3.6 billion, you get $4.8 billion.

Gov. Rick Scott confirmed the approximate figure.

In banter with Scott, a reporter offered to lose weight based on the difference between Scott’s budget proposal and the state’s current $70.4 billion budget.

Scott, a fitness buff with a history of deal-making in the business world, made the reporter a counteroffer that suggested his budget proposal would be $5 billion less.

SHORTFALL’S CAUSESThe existing budget shortfall of $3.6 billion is due to a combination of factors including tepid tax collections during a recession, a disappearance of federal stimulus money and expanding Medicaid rolls.

Senators said the bleak picture will necessitate deep cuts and policy shifts, such as shifting most of the state’s 3 million Medicaid recipients into managed care plans, forcing state workers to pay part of their retirement benefits, reducing the size of the state work force and tightening state oversight of 15,000 contracts with private vendors.

Education and healthcare together account for nearly two-thirds of the budget, with the state now spending about the same amount for Medicaid as it does for all education programs: $22 billion.

“The bottom line is, Medicaid has hijacked the rest of the budget,” said Sen. Joe Negron, R-Stuart.

The Republican majority on the budget committee quickly ruled out tax or fee increases as an alternative to cutting programs.

`FIND A BETTER WAY’Sen. Nan Rich, D-Weston, leader of the dozen Senate Democrats, said lawmakers should consider closing tax loopholes or taxing Internet sales. She warned of the unintended consequences of cuts in human services, especially mental health and substance abuse treatment, that could wreak havoc on families and result in more poor children being shuffled into foster homes.

“I just feel we have to find a better way,” Rich said.

Alexander, an acknowledged budget expert who’s in the final two years of a 14-year legislative career, despaired of the news that awaits Florida’s 126,000 state workers.

“I did not run for office to tell state employees we want to cut your pay and benefits,” he said, “but we are where we are.”

Scott will submit budget recommendations to the Legislature on Feb. 7, but lawmakers traditionally do not pay much attention to the governor’s proposals.

After that, the next major development in the budget crisis is an update of the state’s revenue picture, scheduled for mid-March.

Herald/Times staff writers Michael C. Bender and Katie Sanders contributed to this report. Steve Bousquet can be reached at or 850-224-7263.

Read more:

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AFL-CIO Press Conference on Public Pensions

FYI – the AFL-CIO held a press conference on public pensions in
Tallahassee yesterday. The press release is below.
Press Release

And Now, The Real Story: Independent Actuarial, CEO of the Florida
Public Pension Trustees Association Dispel Myths about Florida’s Public
Pension System

Two of Florida’s leading experts on Florida’s Pension Systems explain
how Florida’s public sector pensions are well-funded, sustainable, help
local communities and do not represent a burden to taxpayers.

Tallahassee – Legislative leaders in Florida have made no secret of the
fact that they are considering radical changes to Florida’s public
pensions system.  While no legislation has been formally introduced,
committee chairmen in both chambers have already conducted public
hearings and made comments to the press regarding their desire to
dramatically alter public sector pensions, bringing great uncertainty to
thousands of public sector workers and their families about the future
of what has been one of the most successful retirement systems in the
country.  Unfortunately, much of the public debate thus far has been
characterized by inaccurate information and faulty assumptions about the
relative strength of both Florida’s Retirement System (FRS) and public
pensions in general.  In order to “clear the air” and begin this
critical public discussion on a foundation of the best possible
information available, the Florida AFL-CIO invited two leading experts
on public sector pensions in Florida to dispel many of the myths
currently circulating about the system.

Rich Templin, the Legislative and Political Director for the Florida
AFL-CIO, convened the press conference.  He said, “We are charged with
representing almost 600 local unions comprised of almost 500,000
workers, retirees and their families.  They are watching these
conversations in Tallahassee and are afraid of seeing the retirement
security of hundreds of thousands of Florida’s public servants thrown
into jeopardy based on a debate characterized by bad information and in
some cases deliberate falsehoods about the FRS and other public sector
pension systems.  We have invited these independent experts here today
to dispel the many myths circulating in the halls of the Capitol and in
the press to help ensure that as this debate moves forward, it does so
based on sound information.”

Chad Little, A.S.A, E.A., a partner with Freiman and Little Actuaries
and Ray Edmonsdon, CPPT, CEO of the Florida Public Pension Trustees
Association addressed four of the dominant myths circulating about
Florida’s Public Pension systems.  Specifically, they addressed the
following myths:

*         Myth: Florida’s public pensions are underfunded and
unsustainable. Fact: Florida’s pensions are some of the strongest in the
nation, almost all are well funded and sustainable.

*         Myth: Tax dollars used for public pensions are too high and
hurting state and local governments. Fact: Tax dollar contributions are
very low and in general represent a small fraction of operating budgets.

*         Myth: Public sector workers have lavish pensions that far
exceed those in the public sector. Fact: Public pensioners receive
benefits either on par or below those in the private sector.

*         Myth: Public pensions hurt local economies. Fact: Pensions
dollars are investments in communities and actually strengthen local
economies by providing retirees with stable income and increased
purchasing power.

Chad Little, an independent Actuary spoke about the relative strength of
sustainability of both the FRS and local plans.  He said, “The funded
percentage of a pension plan is an indicator of how a plan is doing in
relationship to its goals. The Wall Street Journal reported at the end
of 2009 that the U.S. stock market is wrapping up what is likely to be
its worst decade ever. In nearly 200 years of recorded stock-market
history, no calendar decade has seen such a dismal performance as the
2000s. Yet, according to the 30th Annual Report on Florida’s Local
Government Retirement Systems, the 353 local plans in Florida that
reported a funded percentage as of September 30, 2009 or October 1, 2009
had an average funded percentage of 76%. The Florida Retirement System
reported a funded percentage of 87% as of July 1, 2009.  He also
addressed the myth that taxpayer contributions are burdensome and are
hurting state and local governments.  He continued, “According a report
by the National Association of State Retirement Administrators the
taxpayer contributions to retirement plans in Florida as a percentage of
all state and local government spending as of 2008 was only 2.37%. The
national average was only 2.89%.” The point here is clear, that even
during this period of market volatility and underperformance and with
government contributions less than 3%, almost all of Florida’s public
pension programs are well funded to meet their obligations with
surprisingly little impact on the tax payers.  As the market begins
return to normal or even lower than normal levels, Florida’s pensions
remain sustainable for the foreseeable future.

Ray Edmonsdon, CPPT, serves as the CEO of the Florida Public Pension
Trustees Association, a non-profit educational foundation designed to
educate and support trustees of public pensions across the state.
Edmondson discussed the fact that while there have been claims that
public sector workers receive higher pay and better pensions than the
private sector, the opposite is actually true.  He said, “The Florida
Public Pensions are the most funded, most regulated in the country with
the best educated trustees.  Florida’s workers do not receive any type
of lavish benefits.  Recent studies indicate the average pensioner in
FRS receives only $16,845 and the average pensioner in municipal systems
only receives $23,854.  This is not lavish and does not represent any
type of sweetheart deal.  Especially considering that most public sector
workers earn less on average than their counterparts in the private

He also discussed the benefits that these safe and secure plans provide
local communities.  He said, “There are 1.3 million public sector
workers in the state.  Seventy-seven percent of those workers stay in
the state.  Every dollar of these pensions generates $1.41 in economic
activity.  What other type of investment can communities make that
generate over a 40% return?”  He concluded, “Based on my 30-years of
experience with Florida’s public pension systems I have to ask the
question…why anyone would anyone look to radically change a critical
part of economy that is functioning as well as our retirement system for
the public sector.  If it ain’t broke, don’t fix it.”

The debate over the FRS and other public sector pensions promises to
dominate the upcoming legislative session.  Unfortunately, many of the
assumptions being made by lawmakers looking to radically change a
well-performing system with numerous benefits to the state are based on
faulty information.  As this debate moves forward, the Florida AFL-CIO
will continue to provide lawmakers, the press and the public at large
with the best possible information to ensure that any changes are made
because they are needed and will provide a benefit the people of
Florida.  This is an issue that must be addressed carefully,
deliberately and with solid factual information.  Political rhetoric,
blanket ideological statements and questionable data should have no
place in policy making that has such wide-reaching and potentially
disastrous consequences.

Numerous studies were employed by the experts in preparing their
remarks.  They can be accessed online here:

Joshua Anijar

Florida AFL-CIO

Communications Director

850-224-6926 (Office)

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DCSMEC Notice -Jan. 10, 2011

Dear Brothers and Sisters:

Just a friendly reminder that our next General Membership meeting will be held on January 18, 2011 at the DCSMEC location; 2315 NW 107 Avenue, Conference Room 10 & 11, Doral, FL  33172 at 4:30pm.

Please mark your calendar!


Keith Love

Business Agent.

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