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Force Government To Rethink Its Generous Pay and Benefits

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The Tampa Tribune

Published: March 30, 2008

The Legislature, still talking about cutting taxes, is ignoring a related issue. The salaries and benefits of many government workers are far too generous.

Elected officials at the state and local levels won't bring public compensation into line with private-sector pay for two reasons. First, the employees and their unions exert heavy pressure during campaigns, and second, the politicians have cut themselves a big slice of the same pie.

The excesses are highlighted by the increasing number of high-level officials getting a fat paycheck and a fat state pension at the same time. A simple benefit initiated years ago to guarantee civil servants a minimal monthly income for life, in return for loyal service and modest pay, has been distorted into a get-rich scheme for the well-connected.

No Proof Incentive Saved A Cent

Unlike many other states, government employees in Florida are allowed to collect their pension while still working at their job. A law passed in 1998, the Deferred Retirement Option Program, lets veteran employees who agree to retire in five years start collecting their pension now and putting it in a fund with a high guaranteed interest rate.

When they finally do retire, they get that five-year pension check, which can be hundreds of thousands of dollars, plus ongoing pension benefits and some health benefits for life.

Try to find that deal in the private sector.

Sen. Mike Fasano, a Republican from Pasco County, has proposed two useful changes this session that would lessen the exposure for taxpayers. He wants to end the defined-benefit part of the state pension system - the promise of a guaranteed retirement check - for new employees. Instead, workers would contribute to a savings plan similar to a 401(k), with a matching contribution from the state.

He also wants to prohibit elected officials from collecting a salary and their pension at the same time. The latter reform is getting some support from lawmakers embarrassed by colleagues who are shamelessly gaming the system.

The more significant change, to phase out guaranteed pensions and replace them with employer contributions to personal retirement accounts, is getting nowhere. Fasano says many fellow lawmakers and union representatives are afraid that market investments will leave workers with inadequate savings for retirement. Few share his fear that government is putting taxpayers at risk with ever-higher guarantees tied to ever-higher salaries.

Public employees deserve competitive pay, not a significantly better deal than everyone else. Taxpayers can't afford to fund this gravy train forever.

And now, with the economy in slow motion, lawmakers are focused on cutting services for fragile citizens, not cutting the salaries and benefits of highly paid government workers. After all, if they cut compensation, they'd lose feathers from their own nest, too.

How did it happen that citizen lawmakers - whose jobs are deliberately kept part-time to keep them in the real world with the rest of us - are getting pensions for what's supposed to be "public service?"

The rewards for hanging on to a government job are so great that mid-career workers aren't tempted to try their hand in the private sector. A big gap in government employment can disqualify someone for the DROP windfall.

Lawmakers supported DROP because it was sold as a way to nudge highly paid veterans into retirement and thus save the state money. We asked lawmakers how much money, if any, the plan has saved. They don't have a clue.

Our observations suggest the plan encourages the highest paid workers not to retire and worse, to make sure no one else knows how to do their job so they can't be easily replaced until they've gotten their turn double dipping.

Public hearings are needed on the consequences of DROP so the public will understand its costs and benefits. When they do, they'll pressure their representatives to make reforms beyond those proposed. Unless there's evidence the program has saved money, the state should drop the DROP program.

Look For Savings In Payroll

Government pensions in Florida are guaranteed to increase 3 percent a year, recession or not. The worse the economy performs, the more taxpayers must kick in.

Florida is unnecessarily generous in rewarding loyalty. The state's pay scale shows amazing ranges that turn low-level jobs into great careers.

Secretaries who stay long enough get paid like executives. Cooks can make $73,000. Cashiers, $51,700. Janitors, $47,500.

The pension outrages, however, happen in the upper pay scales. Pensions are not capped, so the benefit becomes a path to lifetime luxury for senior managers.

Retirement incomes in six figures are not uncommon. No wonder our government leaders and bureaucrats at every level seem unconcerned about the financial instability of Social Security and Medicare. They're fixed for life and personally don't have to worry.

If the Legislature is afraid to tackle the compensation issue, it should appoint a panel like the Tax and Budget Reform Commission to recommend reforms. The panel should convene every decade and be given the power to adjust public pay scales and benefits, either up or down, to reflect the economic realities facing those outside government.

Clearly the first adjustment would be down.

First In A Series

Dear Readers: The Tribune's Editorial Board today is launching what will be an occasional series on the high costs of compensation for government employees - an issue that lawmakers refuse to address even as they cut services to the poor to balance the state budget.

ABUSE No. 1: Florida government employees can collect their pension while still working at their job. This incentive was intended to encourage highly compensated employees to retire sooner than later. But 10 years after the program launched, there's no evidence that it's saved any money. However, there's plenty of anecdotal evidence about state workers gaming the system and drawing two or three paychecks.

THE SOLUTION: Florida Gov. Charlie Crist, who promised to make government "live within its means," should exemplify fiscal discipline and do what's necessary to dissolve the exorbitant DROP program.

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