2010 – Interesting times for legislature

Often referred to, euphemistically, as the Chinese curse, Historic City News is reminded of the proverb “May you live in interesting times”.

Two St. Johns County commission seats, all four cabinet positions, including Governor, Chief Financial Officer, Attorney General and Agriculture Commissioner, plus one of our U.S. Senate seats is open for the 2010 election cycle. In the fall of 2010, practically every cabinet officer and 1 out of every 6 state legislators is running for an office they currently do not hold.

There are some large issues facing county government in the 2010 Legislative Regular Session — and the committee process is already well under way in Tallahassee.

According to the Florida Association of Counties, who plans to finalize its legislative agenda next week, jobs and the economy will be important themes again — producing debates on oil and gas exploration and gaming. However, there are some “sleeper issues” that may gain traction because of the fiscal times; focusing on cost savings and reducing government’s fixed costs.

For instance, the debate on retirement plans opposed to pensions is one example that is beginning to start a buzz in Tallahassee. Some folks want to re-evaluate the traditional “defined benefit” Florida Retirement System model. The defined benefit model has been under the microscope for some time.

Historic City News published an article on October 13, 2009, pointing out that the private sector has almost completely abandoned models with guaranteed benefits and the public sector has been creeping towards more options that reflect “defined contribution” models and alternatives.

In vetting the new fiscal-year budget for St. Johns County, there was a lot of attention paid to the number of county employees and the salaries that they earned. What was not as publicized as the salaries of current county employees was the up-front and back-end cost of retirement benefits for those workers.

Although the City of St. Augustine has its own retirement plan, many taxpayers are not aware that virtually every public employee and elected official in St. Johns County is part of the Florida Retirement System. Every year taxpayers pay into the state-managed FRS fund up to 23% of the employee’s salary on the front-end.

Reportedly, Senator Mike Fasano is going to suggest that we grandfather existing public employees in benefit plans; but prospectively, make everyone participate in a defined contribution plan.

Florida Association of Counties feels that the state has benefited from a well financed and managed retirement system. Don’t be surprised if this model is not poked at extensively because of the potential liability and recurring contributions required by the state.

It’s not likely that the primary campaign message next year will be “plug any financial holes with tax increases”. We are at the tail end of one our longest and most severe recessions in recent memory and unfortunately Florida’s recovery is expected to be slow and lag the rest of the country.

State government faces a budget deficit for the fourth straight year estimated at $2.6 billion. This year’s current budget includes federal stimulus dollars and roughly $2 billion in revenues from increases from a variety of taxes and fees. These fee increases make it even less likely that the state will increase revenues again.

Interesting times, without a doubt. And, by the way, the legend of the Chinese curse held that was only the first of three curses — each of increasing severity. The other two being “May you come to the attention of those in authority” and “May you find what you are looking for.”