Flexibility is the key for the current iteration of Mayor Lenny Curry’s pension payment plan.
When he pitched the idea Jan. 4 to City Council members, one key idea was new public employees would enter a defined contribution — not defined benefit — plan.
When the legislation was filed in Tallahassee, though, that part was absent. Instead, it just says new employees can’t enter the plan that’s receiving tax dollars.
That means the type of pension plan new employees could enter would be a point of discussion during future collective bargaining sessions with unions — one of the later hurdles the plan has to leap.
Before that, there’s the Legislature. Then Gov. Rick Scott. Then council. Then voters. Then the unions and finally, the Police and Fire Pension Fund board, the group Curry’s administration spent part of Friday morning updating on the plan.
Yet, the proposal can change. It’s in the hands of state lawmakers — a group that can shape, shift, add, subtract and alter Curry’s plan.
City Chief Financial Officer Mike Weinstein said ideally locking in the half-cent sales tax extension to pay down the city’s $2.7 billion in unfunded liabilities — and only those liabilities — would convince actuaries to account for the future revenue stream.
They then could lower the annual payments until 2030, the time when the pension-related tax swap would go into effect.
The city should be putting in $75 million a year into all its plans, he told the board, but instead is putting in $260 million to cover the liabilities.
An actuary change is the bestcase scenario.
Less attractive, but still workable, would be borrowing money now to ease the city’s pension-challenged budget and paying that back that with revenue collected from the future tax, another piece written in the bill.
That means also paying interest, though.
Weinstein said it’s estimated 30 years of the tax would generate about $8 billion, starting with $100 million in 2030. But, as the bill is written, the tax would just be in effect until the pension plans are funded — again, flexibility.
Curry was in Tallahassee last week pitching lawmakers on the plan and asking them to keep an open mind on the issue.
It was the same message his administration had for the pension fund board Friday and the police and fire unions they met Jan. 8.
The mission for now is to get the revenue stream. Other details would happen only after that, Curry’s administration told the board.
The bill as of Friday had been assigned to the Finance & Tax Committee and State Affairs Committee in the House. On the Senate side, it’s heading to the Community Affairs Committee.
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