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Pension surplus splits legislators

The Senate president wants to spend billions on teacher raises and other uses; the House speaker objects.

By JO BECKER and TIM NICKENS

© St. Petersburg Times, published April 27, 2000


TALLAHASSEE -- In negotiations over the state budget, Senate President Toni Jennings has named her price.

She wants to draw billions of dollars from a surplus in the state pension fund to pay for an 8 percent teacher raise and other benefits for public employees.

But House Speaker John Thrasher and Gov. Jeb Bush say the idea is fiscally risky, and they are adamantly opposed.

Neither side is budging, at least not in public.

The difference is emerging as a major sticking point this week as legislative leaders get down to the final negotiations over the $50-billion state budget that affects everything from the size of teacher raises to how many new roads get built.

As always, some lawmakers are worrying the legislative session may not end on time on May 5 because of the disagreement between the two Republican-controlled chambers. While that's unlikely, the Senate president's spokeswoman, Edie Ousley, said Wednesday that the enhanced benefits for state employees are a top priority for Jennings.

"She'll go home happy if she gets that," Ousley said. "She's committed to it."

Jennings has considerable leverage. If Thrasher is unwilling to give, he may end his career in the Legislature without realizing his dream to build a medical school at his alma mater, Florida State University.

Thrasher insists he is willing to let the medical school go.

"I don't think they believe me down there when I say I don't need anything," he said of the Senate. "And that includes the medical school."

For Jennings, who is running for the statewide office of insurance commissioner, passing the plan could win support -- and campaign contributions -- from teachers, state employees and their unions.

Wednesday, a key Senate committee slammed together Jennings' plan to spend $3.4-billion in surplus from the state retirement system with a House-backed plan to allow state workers to take money they pay into the retirement system and invest it themselves in a tax-deferred retirement fund.

Pat Tornillo, lobbyist for the teachers union FEA-United, loves the Senate approach. He called Jennings a "pro-education" politician and vowed that those who oppose her plan "will have to pay the price at the polls" come November.

That has Thrasher facing dissent within his own ranks: During a debate Wednesday on the House retirement plan, a dozen Republicans joined Democrats in trying to amend the plan to take a position closer to the Senate's. The amendment would have used about $2-billion of the surplus to vest employees in their retirement plans earlier in their careers and increase their retirement benefits. Although the amendment narrowly failed, it was supported by GOP lawmakers facing close races in November.

"It's not very much to ask for," said Rep. Sharon Merchant, R-Palm Beach Gardens.

After the close vote, Thrasher and Jennings spoke on the phone about the Senate's plan. But afterward, Thrasher said, "I haven't changed my position."

Jennings wants to use $3.4-billion of the $12-billion retirement surplus to:

Restore pension benefits taken from the state's 54,000 law enforcement officers and firefighters when the pension plan ran into trouble 22 years ago.

Give all 600,000 state and local employees and retirees better retirement benefits by allowing vesting after five years instead of the current 10 or the eight proposed by the House.

Base pensions on the highest three years of pay instead of the best five years.

Reduce government contributions to the pension system, which would mean that school boards would have a pot of money to pay for teacher raises of up to 8 percent.

But the board that oversees the state's pension fund, which includes Bush, says that a larger surplus is needed. Some point to this month's sharp drop in the stock market as a reason that the state should keep a large reserve.

Rep. Tom Feeney, an Oviedo Republican who is in line to become the next House speaker, said Wednesday that "nothing could be more cruel" than making promises to state employees only to find that the state retirement system doesn't have the wherewithal to keep them.

Earlier this month, the board that oversees the state's pension plan recommended that lawmakers spend only between $566-million and $973-million of this year's surplus.

That's enough to pay for restoration of $690-million in law enforcement benefits sought by law enforcement officers, something both Bush and Thrasher support doing. The House is expected to vote to do that this week. The House also would vest all employees in eight years.

But the Senate points out that last year the Legislature spent over $1-billion of the retirement system's surplus. Actuaries have also said the plan is sound, Senate Majority Leader Jack Latvala of Palm Harbor said.

"Ask them where their actuarial studies are," he said of House critics.

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