Avoiding war in Tallahassee

If public employees demand too much or if conservative lawmakers try to cut too deeply, the Legislative session could turn ugly and unproductive.

A starting point should be acceptance that Florida lacks the tax revenue to give public workers all they have come to expect. Pension reform is unavoidable. But because the state has not made wildly excessive promises, the cutbacks need not be severe.

A protracted fight, like the one that continues in Wisconsin, is good political theater for union leaders and for a governor seeking national name recognition. But it's a bad way to craft the best policy.

Florida is on a more productive track by raising issues for public debate early in the process. Already Sen. Jack Latvala, a thoughtful and experienced Republican from Pinellas County, has proposed changes that take the sharpest edges off some of the pension reforms.

Gov. Rick Scott's idea is to charge everyone in the state pension system 5 percent. That is appropriate over time, but more painful than absolutely necessary this session.

The many lower-income workers on state and county payrolls, whose pensions are relatively modest, would be hardest hit. We're talking about highway patrolmen, game wardens, clerks and secretaries. Lawmakers should phase in any major change, especially for those earning $75,000 or less.

It's better to fix first the excesses that make taxpayers most angry and defuse the issues that have public employees ready to explode.

Here are some things to keep in mind as tensions build in anticipation of the opening of the session on March 8.

• Pension promises must be scaled back. Guaranteeing a high lifetime benefit requires steady growth of investments in the pension fund. While the public sector screams about change, let's remember that few workers in the private sector are offered any kind of pension these days.

Even if public and private payrolls are cut during a recession, retirees getting a Florida pension check are immune from cuts. They even get guaranteed cost-of-living increases. Such promises must be less generous.

• Be rational, not emotional. Policypay.net is over-the-top when it says, "Governors and mayors have declared war on the nation's police officers and firefighters." The advocacy site for first-responders says shortfalls in pension funds are exaggerated because current earnings are sufficient to pay benefits.

The stock market has done well lately, but the trouble will come in years when investment values fall. Pensions require taxpayers to cover the gap, even during a recession, a housing crisis or the aftermath of another 9/11 event.

Here's what can happen: From 2009 to 2010, the tax contribution required for each regular employee in the Florida pension plan went up 10.8 percent at a time when almost no one got a raise. The cost went from 8.69 percent of each employee's pay to 9.63 percent. The cost for senior management went up 12.3 percent and for special-risk workers, 11.9 percent.

• Enact sensible reforms quickly, such as Florida TaxWatch's recommendations that the wait for vesting in the Florida Retirement System be increased from six years to 10 and only the base salary be used when calculating the five highest-earning years for retirement. The system now counts overtime and accrued annual leave, unnecessarily inflating benefits.

• Money is not the only issue. The Florida League of Cities is right to complain of a "stranglehold of state laws that force cities to keep handing out increased benefits year after year."

The Legislature also should resist dictating to cities and counties what the local tax rate should be. That's why we elect mayors, city councils and county commissions.

• Beware of straw men. Some anti-tax activists unfairly blame government spending for all that's wrong with the economy. Some government workers accuse all conservatives of union-busting. The choice is not between outlawing collective bargaining or accepting a payroll that bankrupts the state.

One reason the rhetoric has become extreme is the Legislature's refusal to rein in spending when the economy was booming. Republican Sen. Mike Fasano of New Port Richey saw problems ahead and tried in recent years, without success, to close the state pension to new employees.

Under his plan, new hires would get a 401(k) plan instead of a pension. The change would have made the state liability predictable.

The ability of public employees to stop such reasonable reforms has led to the election of politicians eager to do much more.

Fireworks are inevitable this session. We hope that Fasano, Latvala and other serious thinkers will be able to put out the fires and pass reforms that stand the test of time.