Many Florida municipalities have experienced low to no job growth, a drop in home prices over the last year and stagnant economic growth. Florida’s construction industry was hit hard by the housing crisis, and today the unemployment rate remains higher than the national average.
Now some local governments are working on plans to cut public sector employee pensions.
The Sun-Sentinel reports:
Pensions have morphed into an albatross for many municipalities, compounded by shrinking tax revenues, investment losses and longer life spans. Now cities such as Fort Lauderdale and Delray Beach are reining in costs for future retirees, with others ready to follow suit.
“Pensions are the hardest to go after because of the bargaining with the unions, but we have to take them on,” said Hallandale Beach Interim City Manager Mark Antonio. “Taxpayers who are unemployed are not getting these pensions, and they are questioning why police and others are getting guaranteed pensions.”
The city of Hollywood, the second largest in Broward County, has a pension shortfall of over $350 million. Fort Lauderdale is close behind, and Pembroke Pines, Miramar and Sunrise are dealing with this problem as well.
The Sun-Sentinel report indicates that “not all local governments will be forced to prune pensions this year. Those whose benefits are administered by the Florida Retirement System will not see any changes. The system covers more than 650,000 current state, school district and municipal workers.”
The Florida Retirement System “Pension Plan is a defined benefit plan, in which you are promised a benefit at retirement if you meet certain criteria.” The FRS is sponsored by the State Board of Administration of Florida, whose Board of Trustees is comprised of Charlie Crist, Alex Sink and Bill McCollum.