From the Bradenton Times
by Dennis Maley
The Florida budget faces a $3.6 billion shortfall, raising the likelihood that state programs that have already had their budgets slashed will be cut even further. While lawmakers faced similar challenges last year, they at least had federal stimulus funds to help.
Most of those funds have largely dried up, especially ones related to education, which makes it an obvious target for further reductions. Last year's education budget relied on $1.2 billion in such monies, which are referred to in the budget as non-recurring federal funds.
State employees' pension funds are also seen as a major area where significant cuts might occur. The Florida Retirement System paid more than $5.3 billion to over 300,000 retirees last fiscal year, at an average of just under $1,500 per month, per retiree. The FRS is funded by an investment portfolio of $126 billion. It posted gains of 14 percent last year.
School boards account for just about half of the plans members, while state employees make up about 20 percent. The rest are a mix of county, city, special district and state college employees.
In terms of cuts, minimum retirement ages, annual accrual rates and qualification for higher special-risk pensions like those given to firefighting and law enforcement employees have been mentioned. It is possible that the state could do away with defined-benefit pensions for new employees and switch to 401(k) plans like most of the private sector, which would not carry any liability for the state and other governments when workers retire.
The Deferred Retirement Option Program, or DROP, which allows qualified employees to "retire" while continuing to work for up to five years (8 for teachers), while their monthly pension checks are deposited in escrow at 6.5 percent interest, might also be done away with in order to fill budgetary holes.
http://www.thebradentontimes.com/news/2011/02/01/state_government/state_eyes_big_cuts_in_pensions_and_education_as_budget_session_approaches/
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