City pension funds may be on shaky ground

People are worried that a bill in the Florida Legislature could upend the city employee pension fix put in place by Lenny Curry, former mayor, and they should be.

But concern should morph into action soon. That bill is on a fast track.

HB 7073 is a 58-page bill that amends dozens of sections of Florida law concerning taxes. The fear is that one of the changes might be to require a re-vote on the sales tax increase Curry got approved to fund his plan.

Yet the bill was assigned to only one committee, was quickly passed, had a second reading and was put on special order, meaning an immediate vote — today.

That indicates someone wants it passed — and passed quickly.

Curry’s plan, for anyone who does not remember, was to put off the multi-billion-dollar unfunded liability of both the police and fire plan and the general employees plan until the 2030s.

That freed up current cash – giving Curry $80 million to spend the first year – and doubled the problem future taxpayers will face. The police and fire fund is seriously underfunded and the liability is growing.

The current bill as amended requires all new local discretionary sales surtax ordinances to be approved by referendum at least once every 10 years;

If the tax bill does pass and if it does require another referendum to enact a sales tax increase and if the voters don’t buy it this time around, the whole plan could collapse like a house of cards.

That is a lot of ifs, but the stakes are big.

There may also be a problem with the Curry Plan that can’t be fixed. It is:

Florida Statutes 112.61 Legislative intent.—It is the intent of the Legislature in implementing the provisions of s. 14, Art. X of the State Constitution, relating to governmental retirement systems, that such retirement systems or plans be managed, administered, operated, and funded in such a manner as to maximize the protection of public employee retirement benefits. Inherent in this intent is the recognition that the pension liabilities attributable to the benefits promised public employees be fairly, orderly, and equitably funded by the current, as well as future, taxpayers. Accordingly, except as herein provided, it is the intent of this act to prohibit the use of any procedure, methodology, or assumptions the effect of which is to transfer to future taxpayers any portion of the costs which may reasonably have been expected to be paid by the current taxpayers. Actuarial experience may be used to fund additional benefits, provided that the present value of such benefits does not exceed the net actuarial experience accumulated from all sources of gains and losses.

This appears to prohibit exactly what the Curry Plan did – transfer costs from current taxpayers to future taxpayers.

Did the hordes of city lawyers miss that hurdle when they vouched for the Curry Plan? Or, did the Curry Plan for pension funding get the same “damn the torpedoes” impetus as the Curry JEA Plan?

Lloyd Brown

Lloyd was born in Jacksonville. Graduated from the University of North Florida. He spent nearly 50 years of his life in the newspaper business …beginning as a copy boy and retiring as editorial page editor for Florida Times Union. He has also been published in a number of national newspapers and magazines, as well as Internet sites. Married with children. Military Vet. Retired. Man of few words but the words are researched well, deeply considered and thoughtfully written.


One response to “City pension funds may be on shaky ground”

  1. Looks like Lloyd is right on target, again. The same crowd that fooled folks with the “pension crisis” now want to “borrow” from the pension funds they weakened with the “Curry Cash-Out Plan.” Just making another promise the next bunch will ignore or break. TIf you think you have seen this story before, your right – ask the Indians.

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