Few bills have cut local government spending so severely as SB 1810 with so little opposition from Democrats.
Passed on the last day of session, the bill requires 1,000 employers to pay more into the state retirement system’s $135 billion pension system.
State agencies, universities and colleges, school districts and counties will pay nearly $900 million more next year in contributions in an effort to boost the pension system’s funding level above its current 86.9 percent level.
But while most of the employers who have to pay more received additional funding to cover the expense, counties were left with no obvious way to pay the higher amounts. Large urban counties like Miami-Dade, Hillsborough and Pinellas say they must cut services or consider raising taxes to cover the shortfall, and are making their complaints known.
Too late little too late. The bill was passed a month ago, the bill signed two weeks later. And not one lawmaker voted against it.
What happened to the Democrats? They blamed a combination of miscommunications and a hectic finish to the legislative session that made it difficult to truly understand the ramifications of the bill.
“You’re talking about a conference bill on the last day of session,” said Senate Minority Leader Chris Smith, D-Fort Lauderdale. “Most legislators knew what it did, but I don’t recall looking at exact numbers. They could have been out there, but on the last day of session, I’m not sure those numbers were available.”
Ordinarily, Democrats look out for the interests of the counties, and mostly oppose the the Republican push to fully fund pension systems at the expense of financing government programs that they say are more urgent. They regularly point out that pension funds are considered sound if they are more than 80 percent funded. Florida’s system is, and is generally considered one of the best in the nation.
Only one lawmaker, Rep. Mike Fasano of New Port Richey, raised any questions about SB 1810 before it was passed.
“There’s nothing on paper that’s ever been shown to me that proves that the Florida retirement system needs to be 100 percent,” Fasano said this week. “If these lawmakers think that the Florida retirement system isn’t properly funded, they should have been here in the 1980s and 1990s. They just don’t know the history of the Florida retirement system.”
From the time it was created in 1970 through 1998, the fund was below 100 percent. In 1995, as the stock market started a historic boom cycle, the fund was 77 percent funded, 10 percentage points less where it stands now.
But as the stock market climbed, hauling with it the returns of the pension system, the funding level kept climbing too. By 2000, the pension system was funded at a level of 118 percent. It remained above 100 percent -- meaning there was a surplus in the millions -- until the market collapsed in 2008. It’s been below ever since.
Fasano voted for SB 1810, but now says he was duped into thinking that rates for counties weren’t going up. House Democrats say Fasano's confusion was their's as well, and why they ended up voting for the bill.
On May 2, Fasano asked House Appropriations Chair Seth McKeel, R-Lakeland, if there were any changes to the rates. McKeel replied that no, rates would remain the same. Fasano said that answer convinced him counties wouldn’t pay more and clinched his support for the bill.
House Minority Leader Perry Thurston, D-Fort Lauderdale, said Democrats had the same conclusion.
“I'm going to agree with Fasano,” Thurston said Friday. “It was a cloudy answer that was given to us. That’s probably why you had a unanimous vote, and that’s why you didn’t have more people railing against the shifting of costs to local government. There would have been a majority of Democrats and even some Republicans who would have voted against this if the response had been different.”
McKeel on Thursday said he was misunderstood. He said he thought Fasano was asking if there had been any changes in the bill that had been first approved in April. Even so, it was Fasano's responsibility to understand what the bill would do.
"If he didn't understand what he was voting on, I'm sorry," McKeel said.
The fiscal impact to counties -- $264 million -- had been published in a bill analysis released in April, so there was no excuse not knowing what was in it, McKeel said. Still, a county-by-county breakdown wasn’t available, and still isn’t.
“Without those numbers, it’s a hard bill to vote against it,” Smith said. “It’s kind of hard to be the party of fiscal irresponsibility, the ones making pensions more unstable.”
Asked if he believes a vote against SB 1810 actually did that, he replied no.
“But that’s the way it’s framed,” Smith said.
And it wasn’t like counties were lobbying lawmakers not to do this. The Florida Association of Counties estimated the fiscal impact of the bill, but they took no stance on it, said its spokeswoman Cragin Mosteller. Smith said he didn’t hear from any commissioner from his home county, Broward, even though it must now pay about $17 million in new pension charges.“I’ve been preaching to the cities and counties for years: you have to call your more conservative lawmakers and explain how this is affecting their hometowns,” Smith said. “They have to do a better job of letting us know what the issue is.”