State Boasts: Pension System Grows, Debt Down
Around the State
The state is claiming progress in its finances.
With borrowing down, Florida's debt continues in the same direction, now $3.6 billion lower than a peak of $28.2 billion in 2010.
Meanwhile, the Florida Retirement System Pension Plan, which some lawmakers sought to overhaul in the spring and may again attack in 2014, grew 13.12 percent during the recently completed fiscal year, before $6.2 billion was distributed to participants.
During the spring legislative session, a pension-overhaul proposal pushed by House Speaker Will Weatherford, R-Wesley Chapel, failed to advance through the Senate. The controversial proposal would have shifted new state workers, teachers and county workers away from the retirement system and into a defined-contribution plan, similar to a private 401(k) retirement investment plan.
Weatherford sent a Twitter message Tuesday that indicated he continues to support the proposed reform.
"Make sure Florida doesn't go bankrupt like Detroit," Weatherford tweeted.
After seeing the FRS numbers for the year, Rep. Darryl Rouson, D-St. Petersburg, tweeted a reply Wednesday that said because of the strong numbers "calls to change it lose credibility."
Also Tuesday, Ben Watkins, director of the state Division of Bond Finance, told Scott and the Cabinet that Florida's debt was reduced $1.6 billion in the last fiscal year, the third consecutive year the number had dropped.
The reduction put Florida's debt total at $24.6 billion as the current fiscal year began on July 1.
"This basically means we're paying down more debt than new money issuance," Watkins said.
Part of the reduction came as the state undertook 10 refunding transactions last year, worth about $2 billion, taking advantage of lower interest rates. Also, while the state budget has grown for the current fiscal year, the state has cut back on spending on areas that require borrowing, including new bonds for construction at state universities and public schools or the environmental land preservation Florida Forever program.
Scott, while appearing on a Tampa television station Wednesday, described his budget-cutting efforts as using a "scalpel" to determine "where you can save money without hurting people."
Watkins noted that the credit-rating agency Moody's Investors Service -- one of three agencies that rates Florida's bonds -- recently issued a report titled "Florida Back on Track" that points to Florida's efforts to rebuild its revenue as a cushion against future downturns and an improving economy.
"This is very positive feedback from the rating agencies," Watkins said.
The Moody's report by analyst Nichole Johnson noted that "revenue trends, year-end surpluses, and other economic indicators now show that the state’s recovery is well under way."
However, Johnson cautioned that Florida remains vulnerable to a new housing bubble and that a hurricane or series of hurricanes could test the abilities of the Florida Insurance Guaranty Association, Citizens Property Insurance Corp. and the Florida Hurricane Catastrophe Fund as they seek to bring in a large amount of debt into the market while imposing emergency assessments on storm-ravaged property owners.