Budget conference: Senate moves on House pension padding plan, but without COLA sweetener

Image via Colin Hackley.

Facing troubles recruiting and retaining employees throughout state government, lawmakers are moving to hike state worker salaries by 5% across the board and boost pension payouts.

In Saturday afternoon budget talks on SB 7024, the Senate moved closer to a House plan to increase benefits in the Florida Retirement System (FRS), but top Senate budget negotiator Doug Broxson, a Gulf Breeze Republican, said a plan to restore annual cost of living adjustments was too expensive.

But the Senate did agree to remove the restrictive window to enter the Deferred Retirement Optional Program (DROP), which allows retirement-age workers to continue accruing benefits while still working, and extend the time employees can participate in DROP from five years to eight years. The interest rate applied to an employee’s monthly benefit would also jump from 1.3% to 4%.

All were parts of the House plan, but the Senate also extended the time for teachers to participate in DROP to 10 years, starting June 30.

“We heard the cry loud and clear that we need teachers,” Broxson said. “This gives the administrators the chance to go in and cull through those great teachers who have been great performers and give them the chance to stay in the classroom.”

The 5% pay increase will cost $389 million, but the Senate also offered to spend $108.9 million for state agencies to use for targeted pay increases to help retain workers lured by higher wages in the private sector.

“The testimony of all the agencies is that they’re under tremendous pressure to keep their employees because of pressure from the private sector,” Broxson said. “Now we give them an option to go in and keep those key employees.”

Another change to the pension plan involves rolling back the retirement age for police, firefighters and first responders, known in the FRS as Special Risk Class members, from 30 years of service or age 60 to 25 years of service or age 55.

The pension changes would roll back some of the changes imposed by the Legislature in 2011, when benefits were cut as the state faced a $3.6 billion shortfall amid the Great Recession. That year, lawmakers required workers to contribute 3% to their pension benefits and eliminated the cost-of-living adjustment. The House included the COLA restoration in its original plan but Broxson said the price tag of hundreds of millions of dollars for the state, as well as local governments and school districts, was too high.

“We’re living in a different time now than in 2011,” said House budget chief Tom Leek, an Ormond Beach Republican. “It’s a much more competitive workforce out there these days and so we have to be more competitive.”

In another part of the budget, the Senate now wants $6 million for Gov. Ron DeSantis’ office for litigation expenses, as he’s engaged in legal battles on multiple fronts. The Senate included $2 million in its original budget and the House had $4 million.

The Walt Disney Co. sued DeSantis earlier this week over a move made to nullify its control over land use in the independent special district that was controlled by the company until February.

Leek, though, didn’t say whether his chamber would accept the offer from the Senate.

Lawmakers must reach an agreement on a final spending plan by Tuesday to meet the 72-hour “cooling off” period required by the state constitution before they can vote on the budget to avoid pushing the Regular Session past its scheduled May 5 end date.