Business

Moody’s: Employee Pension Ruling is ‘Credit Positive’ for Florida

By: Jim Turner | Posted: January 23, 2013 3:55 AM
Scott Arceneaux

Florida Democratic Party Executive Director Scott Arceneaux, left

Not having to return $1.24 billion can do wonders for anyone’s credit rating.

Moody’s Credit Outlook gave upbeat credit marks to Florida after the Florida Supreme Court upheld 2011 legislation that required state employees to contribute 3 percent of their pay to help cover their pensions in the Florida Retirement System defined benefit plan and to eliminate the retirement cost-of-living adjustment.

“The ruling is credit positive for the state of Florida as well as for cities, counties, school districts, and other local governments whose employees are members of the plan,” Moody’s stated.

The analysis by Moody’s, as well as another from Standard & Poor's, was highlighted Tuesday by the governor’s office. 

“The court’s ruling supports our efforts to lower the cost of living for Florida families and we are doing the right things to pay down our state’s debt and reduce unemployment in Florida,” Scott stated in a release. 

“Since I took office two years ago, we have cut state debt by $2 billion and our unemployment has declined to 8 percent -- the lowest rate in four years. We will keep working to ensure Florida maintains its AAA rating with the S&P, continue to reduce debt and make Florida the most business-friendly state in the nation so private-sector jobs can grow for Florida families.”

As Moody’s noted, the court ruling means $530 million wouldn’t have to be returned to state employees that contributed to the plan in 2012, while local governments that are part of the state retirement plan wouldn’t have to return $712 million. 

A ruling against the state also would have caused a $2 billion budget shortfall for Florida in the coming fiscal year, as the state would also have to reinstate the COLA, adding about $473 million to the state’s actuarial liability for the past fiscal year.

Florida Democratic Party Executive Director Scott Arceneaux has expressed disappointment in the ruling that went against the state workers.

“Rick Scott and this Republican-controlled Legislature are squeezing the middle class while giving tax breaks to the GOP special interests,” Arceneaux stated in a release after the court ruled on Jan. 17. “It's not fair, it’s not leadership and it's certainly no way to address our state’s fiscal problems.”



Reach Jim Turner at jturner@sunshinestatenews.com or at (772) 215-9889.

Comments (3)

Christopher Brewer
3:58PM JAN 23RD 2013
I am Republican, but I dissagree totally with this decision. If you read the three decent votes they make perfect sense where the decision to overturn does not. People don't understand it is not just a matter of the employees paying in 3%, it is other drastic changes that will affect every employees pension by as much as 24%. As one of the employees affected this is absolutely a travesty. This just made every first responder, teacher and public employee a second class citizen that the state can change or step on at will. No collective bargaining, they took that option away with this as well. Just totally changed our futures.
Read the Supreme Court decision in its entirety. You will see what I mean. It is a travesty.... This will change one way or another, it is still a democracy.
Brandon Mark
11:29AM JAN 23RD 2013
It's just too bad that the 3% to help cover state employee pension isn't even going to the Pension Fund. If it went directly to the fund I would not be concerned. It appears to be an arbritary tax on state and county employees. The money should be used for the intended purpose.
alan
4:23AM JAN 23RD 2013
Gov Scott, can we just abolish public sector unions? Just do it. The pipeline from taxpayer to union to Democrat is just stupid. End it now, please.

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