Putting More Lipstick on the Same Old Pig

It’s late November, which means we get an early look at some of the bad ideas the Florida Legislature has in store for their annual legislative session in 2016. Once again, the state GOP is looking to kill the Florida Retirement System, one of the largest and most successful state pension plans in the country. There’s no reason to tamper with it. There are no calls from citizens to end a program that has helped many hard working Floridians enjoy the dignity of a modest retirement. It’s just politics, plain and simple.

Living in the South, we have the privilege of hearing some of the best idioms in the English language. I heard my favorite while I was sitting in a staff meeting many years ago. In a deep southern drawl, a manager suggested to someone, "Well, you’d better just put some lipstick on that pig and trot it on back out again,“ which was his colorful way of saying that just because something is ugly, it doesn’t mean you can’t dress it up and try to pass it off as something more attractive.

Clearly, the Florida Legislature has heard this phrase. Hell, it might as well be their motto. It seems they rarely come across a bad idea that the majority of them won’t get behind, provided it is backed by some special interest or ideological sugar daddy, and they don't give up, no matter how bad of a reaction they get. Why, in recent years, has the legislature continued to try and cut the legs out from such a successful program, you might ask. Because the far right of the Republican Party–and the deep pockets who create its narrative–has been waging an intense war against public sector unions and benefits.

Because the public sector is organized under a top-down umbrella at most levels, it can leverage its size to secure valuable benefits for its employees at a relatively low cost to taxpayers. The Federal Employees Health Benefits Program is a great example. Everyone knows that the larger a company is, the less expensive its healthcare tends to cost and the better the coverage seems to be. Spreading risk across a broad pool of diverse enrollees makes that possible.

For a long time, governments have leveraged this buying power to attract employees with a benefit heavy compensation package, in which they skew compensation toward benefit and away from salary in order to get the best value for the most talent. Defined benefit pensions are another way that they can use their high number of contributors to extend an inexpensive benefit that makes positions more attractive than their salaries alone might suggest. These dynamics, along with perks like paid federal holidays have created the age-old adage that you can make more money in the private sector, but the bennies are better with a government job.

However, because public sector salaries are usually tied to some form of cost-of-living indexes, they have kept pace with inflation much better than many private sector positions or people working for the minimum wage. Meanwhile, in the name of becoming more competitive, the private sector has continuously watered down its benefits even as pay flat-lined, shifting from pensions to 401k style retirement plans, while offsetting rising healthcare costs with employee-sponsored insurance plans that cover less and cost more for employees.

Efforts to wean Americans off of Middle-Class expectations are tricky, however, when there are public sector examples of the way life used to be for those who work hard and play by the rules. Hence, the attack on public sector pay and benefits. Legislators are always framing their efforts to kill the Florida Retirement System around helping the taxpayers, but this is a purely ideological attack.

The FRS serves 621,000 Floridians, making it the 4th largest public plan in the country. We're talking about school teachers, firefighters, sheriff's office personnel, local government employees and those who work for the state's 32 executive agencies. A whopping 346,000 retired worked are receiving benefits that average about $1,600 a month. For every dollar these retirees earn, there is an estimated $1.40 in economic impact, because, as I've explained many times in this column, the less wealthy an individual is, the more of each paycheck they spend into the economy–primarily benefiting local businesses.

A recent Senate analysis reported that the FRS has about $138.6 billion on hand to cover active and retired employees. It is funded at about 86.6 percent, which is well above the 80 percent level economists have defined as a "healthy fund." As such, it is one of the most secure funds in the nation with far less unfunded liabilities than most states.

The argument that Florida Republicans are again trying to make is based on the ridiculous notion that it should be funded at 100 percent, and that closing the system to new enrollees would secure it financially. However, this defies basic economics, which would dictate that the surest way to destabilize the fund is to choke off the contributions from new employees that offset current liabilities.

The Florida Retirement System is an attractive benefit that helps recruit talented employees. Getting rid of it will ensure that the quality of teachers in our public schools decline, along with law enforcement, firefighters and the worker bee employees in local offices like the clerk of the courts, the tax collector and other departments that keep the wheels turning in our communities.

If we want to close the program off to someone, let’s start with all of the termed-out state legislators who are increasingly coming back to run for local offices so that they can earn a full retirement in this wonderful system. If they’re not willing to fight for it when it’s someone else’s family’s bottom line at stake–one that is, on average, much less bountiful than their own–then they shouldn’t be able to line their snoots at still another trough.