TALLAHASSEE (CBS4) – As the Great Recession continues to leave it’s indelible mark on the Sunshine State, a new report from Florida State University says a new ticking time bomb may exist when it comes to municipal pensions across the state.
The report, titled “Touch Choices Facing Florida’s Governments,” paints an increasingly dire picture of communities that have promised retirement benefits the state and local governments can’t possibly meet.
Miami, Pembroke Pines, and Hollywood were among the cities citied as having retirement benefits exceed 50 percent of their payrolls, according to the report.
The report said one problem that is making the situation worse is the collapse of the investment markets over the past few years. Since “retirement investment values are no longer providing significant returns, the promises localities have made to their retirees must be funded by local revenues.”
According to the report, while Florida is not at the same level of disarray as California’s disastrous budgeting, “our state’s local retirement systems are headed in the same direction as California’s failed retirement policies.”
A typical Florida county, the study found had an average liability for non-pension retirement benefit of roughly $30 million. In addition, the study found that Miami’s unfunded obligation as a percentage of total government expenditures was roughly 60 percent, while Hialeah’s was 174 percent, and Hollywood’s was 174 percent.
On the other end of the spectrum, Lauderhill and Cutler Bay have their unfunded obligation as a percentage of total government expenditures at 0.6 and 0.1 percent respectively.
The report, from the Leroy Collins Institute said that there were several answers to dealing with the growing pension problems across the state.
One solution pitched was raise the retirement age to 60 in order to make it more difficult for government employees to retire at an early age and draw benefits. The study also mentioned prohibiting double-dipping of retirees who have already qualified for benefits from qualifying for additional retirement benefits.
The report also said that cities invest more money during times of financial gain to reduce the financial stress communities incur during times of recession.
The report concluded by saying that groups like police, fire, union bosses, local and state officials all have together, “put together a route that’s expensive, and getting more expensive by the minute, leaving the bills for citizens not-yet-born.”
To read the full report, click here.