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In This Issue...
- FRS Update
- Retirement
- Developmental Education
- From the News Service of Florida Wire
- Back Issues of Perception
2013 Legislative Session - Week 4
The Legislature’s version of “halftime” took place last week due to the Passover, Good Friday, and Easter holidays. The Legislature was on light duty, meeting only on Wednesday and Thursday. Most of the activity revolved around budget issues, which will become the main focus as the 2013 Legislative Session enters the second half
FRS UPDATE
Two distinctly different FRS reform bills are close to coming head to head. The House has already passed its version of FRS reform, HB 7011, which effectively closes the “pension” plan to all new hires on January 1, 2014. The bill that is scheduled to pass the Senate this week, SB 1392, is much less draconian and gaining support among multiple constituent groups. This could spark a confrontation between Senate and House leaders over the future of the retirement system, though senators say they're confident they can come up with a compromise.
On a nearly party-line vote, the Senate Appropriations Committee sent the measure (SB 1392) to the Senate floor. Sen. Jeremy Ring, D-Margate, joined 13 Republicans on the panel in supporting the bill; the other five Democrats opposed it. The Senate proposal has attracted more support than the House plan.
Instead, the Senate proposal would change the default for employees who don't select a plan in a set period of time to the defined contribution system, lengthen the vesting period for employees who choose the defined benefit plan and give a discount on contributions to employees who enter the investment option. Some retired workers still oppose the changes in the Senate bill, but the unions and the AFC who appeared at the committee meeting are largely favoring it.
Republicans voted down several Democratic amendments, including one that would have undone the change to the default option. Sen. Eleanor Sobel, D-Hollywood, said public employees who choose the defined contribution plan often end up with tens of thousands of dollars less in their pensions.
But Sen. Wilton Simpson, the Trilby Republican sponsoring the pension bill, said defaulting workers into the investment plan makes sense, because they are those less likely to be paying attention and more likely to change jobs before the vesting period for the traditional plan passes.
House Speaker Will Weatherford, R-Wesley Chapel, has made closing the defined benefit plan to new employees a top priority for the session. But that measure is seen as unlikely to pass the Senate.
Still, Senate President Don Gaetz said Wednesday that he thinks there's still time to work out a deal -- with Simpson's bill as a possible template for a compromise.
CS/SB 1392 by Simpson - Retirement
The Senate bill makes four changes, effective January 1, 2014:
1) All newly hired employees in the Regular and Special Risk Classes who have never previously participated in the state retirement system continue to have a choice between the pension plan and the investment plan. If the new member fails to make an active election, the member will default into the Investment Plan.
2) All newly elected officials and newly hired employees within the Senior Management Service Class who have never previously participated in the FRS will be required to enroll in the investment plan.
3) The vesting period for the pension plan will be increased from eight years to ten years for members initially enrolling on or after January 1, 2014. The vesting period for the investment plan will remain one year.
4) Beginning January 1, 2014, all employees participating in the investment plan will contribute 2% of their salary towards retirement. Employees participating in the pension plan will continue to contribute 3%.
Below are comments by some Florida legislators on the issue:
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Rep. Jason Brodeur says, “What we’re doing is what’s called ‘a soft close’ and anybody in the FRS now will not be affected,”. All current employees of the state, counties, school districts and other government units in the FRS could keep their defined benefit pension plans, which are calculated on a percentage of salary multiplied by years of service. |
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Senate President Don Gaetz thinks there’s still time to work out a deal – with Simpson’s bill as a template for a compromise.
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House Speaker Will Weatherford - “The state can’t afford putting aside $500 million a year to keep the FRS afloat with an actuarial liability of about $19 billion.”
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Rep. Dave Hood - “Cities and states all over the country are going bankrupt” because they offer retirement options similar to Florida’s. Instead of waiting for that to happen, we needed to be proactive.” |
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Rep. Irv Schlossberg - “Go pick someone else’s pocket and leave our public servants alone.”
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Sen. Wilton Simpson - “My plan gives more options for employees and changes the system at a slower pace,” Simpson said after the vote. “Future legislators can do different things to this plan. I think this gets us started on a path that puts us at much less risk than the House plan would, and gives us more time to evaluate.”
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Senator Jack Latvala, a leading member of the Senate, said during a recent committee debate that the Senate needed to fight the House on its “broad-brush” proposal. “I think it’s wrong,” he said. “It’s ill-conceived.” |
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Minority Leader Sen. Chris Smith - “People won’t have a goal to reach,” if the House’s bill were to be passed. “They won’t know if their 401(k) plan will be enough to reach retirement.”
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HEALTH CARE REFORM
A majority of Republican legislators will not support expanding Medicaid as called for under the federal Affordable Care Act, even though they do agree something needs to be done. The Medicaid expansion targets millions of Florida residents working in low-paying jobs in the tourism and agricultural industries that are unable to afford health insurance, or are not offered it by their employers. These workers typically end up in emergency rooms where costs are eventually passed on to other citizens in the form of higher premiums and services. The federal government is willing to pay $51 billion over 10 years to extend coverage with the state only being required to match a small percentage of the total cost.
PROPOSED COLLEGE BUDGETS RELEASED
Both Chambers have released budgets for the 2013-14 fiscal year. It's the first session in six years that lawmakers are not forced to close a budget gap. Restoring cuts from previous years and even increasing funding does not seem to create any heartburn among lawmakers. The House budget allocations for the next fiscal year would spend $10.57B on public schools, and colleges and universities. Another $610 million would be drawn from state trust funds. This represents overall a $1B hike in general revenue funds.
The allocation for Florida colleges include $1,101,452,241B (+3.3%) and a 6% tuition increase. The Senate plan allocates $1,100,173,482 (+3.2%) and includes $7M for incentive funds and $3M to enhance 2+2 partnerships.
DEVELOPMENTAL EDUCATION FACING SOME MAJOR CHANGES
Two higher education reform bills, HB 7057 and SB 1720, portend some significant changes regarding the delivery of developmental education at Florida colleges. Not all the changes are bad such as being able to choose from multiple assessment instruments instead of just the PERT. The bills also would allow for flexibility in how college prep instruction is delivered in other ways besides stand-alone courses.
The Senate bill, however, eliminates the ability of colleges to charge tuition and fees for stand-alone prep courses. It believes it will reduce student costs by not having them pay for courses that ultimately do not get applied toward their degree. It also promotes tutorial, co-requisite and other optional approaches to helping students. But it redefines college preparatory instruction from that which is needed to help students successfully enroll in college-level courses such as ENC 1101, to that which is needed to help students succeed IN college-level instruction. It would also refer students who are skill deficient to adult education courses offered either at the college or though the school district. Both the House and Senate bills impact several other areas like faculty, accreditation, and common course numbering. The House bill is on the calendar for second reading in chambers. The Senate bill is on special order calendar for April 4 to be introduced on the floor. It has passed all committees of reference.
The Senate bill strikes at the very core of the Florida College System “open access” model and would impose a “sink or swim” mentality, de-emphasizing college success. It also potentially adversely impacts Latino and African-American students, and all students receiving financial aid. Certain legislators simply believe that maybe not all persons are suited to go to college. However, with a historical enrollment of largely returning students (young adults who have been out of school about 5 years), the proposed changes can have a major adverse impact. Below is a summary provided by the Division of Florida Colleges regarding the student population served at our colleges.
- Students of all ages enroll in Developmental Education.
- Recent high school graduates were least likely to need Developmental Education. During 2011-12, 14% of students enrolled in Developmental Education were Less than 20 years of age. (21,371/152,389).
- Nearly 4 out of 10 students taking Developmental Education were 25 years of age and over. (37.8 percent, 57,648/152,389).
- Nearly one-half of all students enrolled in Developmental Education were between 20 and 24 years of age. (48.1 percent, 73,301/152,389).
- Recent high school graduates were the only age group to show decreases in the need for Developmental Education both short term (-5.4 percent compared to last year) and longer term (-9.9 percent over 5 years).
- 2 out of 3 students enrolled in Developmental Education received financial aid. (65.0 percent, 99,079/152,389).
- Nearly one-half of all African American students participated in Developmental Education. (47.7 percent, 44,965/94,233).
- 3 out of 4 African American students in Developmental Education received financial aid. (76.9 percent, 34,561/44,965).
- African American students are over-represented in Developmental Education. (29.5 percent Developmental Education & 18.0 percent lower division credit).
- 1 out of 3 White students participated in Developmental Education. (34.8 percent 53,051/235,954).
- 55 percent of White students in Developmental Education received financial aid. (29,363/53,051).
- 1 out of 4 Latino students are enrolled in Developmental Education. (25.9 percent, 39,477/132,159).
- Two-thirds of Latino students in Developmental Education received financial aid. (66.7 percent, 26,349/39,477).
STATE CONTRACTS
Two bills being touted in the House and Senate would make some changes to state contracting that will impact our colleges. HB 307 by Tobia and SB 684 by Hays focus on Florida companies gaining a competitive edge on selecting construction companies and contractors. The identical bills would require colleges to provide a Florida preference for construction solicitations where a Florida based contractor would have a 5% preference. Preference to a Florida based construction contractor would also be equal to the preference of the other state. For example if Oklahoma has a 10% local preference a Florida college would be required to provide Florida contractors a 10% matching preference. The bills also require disclosure in the solicitation document regarding whether the payment will come from funds appropriated by the state and the amount. The bills seemingly ignore the federal requirement that state colleges are prohibited to use local or state preferences in solicitations. The AFC is not supportive of these changes as it can result in increased costs and the loss of local control. Neither bill has moved significantly and both have four committee stops to make and not much time left to make them. The House bill was heard in one committee earlier this month, and the Senate bill is slated to be heard for the first time this week.
FROM THE NEWS SERVICE OF FLORIDA WIRE………..
SCOTT vs. CRIST?
Former Republican Gov. Charlie Crist has received plenty of attention as he ponders another run for governor as a newly minted Democrat. But the current occupant of the governor's mansion, Republican Rick Scott, is leaving little question that Crist should be ready for a tough campaign. Scott this week signaled that a major line of attack would juxtapose his economic leadership to Crist's tenure, when the nation tumbled into a recession that caused widespread job losses.
"We're going to show that there's a stunning contrast (between) the economy I inherited and the economy today," Scott said Tuesday. He also added: "In the four years before I became governor, the state had lost 832,000 jobs, unemployment tripled from 3.5 to 11.1 percent, state debt had increased by over $5 billion, and, you know the housing market collapsed."
Is it fair to pin all of that on Crist? Nah, probably not. But here's one translation: Scott will not be Jim Davis, the Democrat who Crist steamrolled during the 2006 gubernatorial race. Need more evidence? Scott this week jumped on Crist after the release of an inspector general's report about Digital Domain Media Group, a company that received $20 million from Florida in 2009 but later failed. Scott tried to tie Crist to the deal. This Inspector General report shows two things first, our current economic project vetting process is in place for a reason, and second, that process was clearly circumvented by the previous administration for the Digital Domain deal," Scott said in a release.
Despite all the media attention and a stream of pre-emptive Republican Party attacks, Crist has not formally announced he will run next year. And even if he does, 2010 Democratic gubernatorial nominee Alex Sink has indicated she is thinking about entering the race, and former Senate Democratic Leader Nan Rich has been trying to build support for months. Rumors also surfaced that Democratic U.S. Sen. Bill Nelson might take on Scott. But Nelson, who was in Tallahassee on Wednesday, said he doesn't have plans to run for governor.
At this stage, Crist appears far more popular than Scott. A Quinnipiac University poll this month gave Crist an edge of 50 percent to 34 percent in a head-to-head matchup. A group that is a fund-raising arm for Scott began running the campaign's first ad this week on the Internet. Scott also has taken steps to try to shore up his popularity, such as calling for $2,500 raises for teachers and objecting to college tuition increases.
But Democrats appear ready to portray Scott as a Johnny-come-lately to such issues. The Florida Democratic Party website touts Scott's "state of denial" and says he is "running away from everything he campaigned on to get reelected."
THE PARTY'S OVER
Crist might be persona non grata with many Republican leaders. But for months, they probably shared a hope that former party Chairman Jim Greer would head off quietly into Florida political history.
It remains to be seen whether Greer will stay quiet. But a judge this week sentenced Greer to 18 months in prison after he pleaded guilty in a scheme that involved creating a fund-raising company and steering party business to it.
Crist installed Greer as GOP chairman, but a trial threatened to expose a pile of dirty laundry about the party. Greer argued before pleading guilty that he was being punished for his support of Crist, who split from the party to run in 2010 as an independent for U.S. Senate. Greer's attorney, Damon Chase, contended that the former chairman should get a short sentence and that he was being punished because of who he was and the high-profile nature of the case. "If this weren't Jim Greer, this would be probation," Chase told Circuit Judge Marc Lubet before the sentencing. "Mr. Greer wants to move on, he wants to make amends, he is contrite for everything that occurred."
Prosecutors sought a longer term for Greer, but Lubet handed down the 18-month sentence because he noted that Greer had paid $65,000 in restitution and because his former partner in the fund-raising company wasn't prosecuted. The former partner, Delmar Johnson, served as executive director the party and later wore a wire to help prosecutors make the case against Greer. "A court has responsibility to see that there's justice whenever it sentences, tempered with some sort of mercy if that mercy is deserved," Lubet told Greer at the sentencing in Orlando. He added that Greer, who had no prior criminal history, had "egregiously violated a position of trust for your employers."
MEANWHILE, BACK AT THE TALL BUILDING ON THE HILL
Lawmakers had a short week, breaking for Passover on Monday and Tuesday and Good Friday on, well, a beautiful Friday. But back in the warrens of offices, House and Senate appropriations staffers finished drawing up budget proposals that reflected the brighter economy. As examples, lawmakers could tell folks at home about plans to pump an additional $1 billion or more into schools and give raises to teachers. Lawmakers also crammed in committee meetings Wednesday and Thursday, as bills spun through on issues such as revamping the state retirement system and allowing designated employees to carry guns at school.
Maybe the most-popular move this week, however, was a final vote on repealing a 2012 law that caused confusion among international visitors to the state --- especially the Canadian snowbirds who load up their cars and head south during the winter. The 2012 law called for foreign visitors to get what are known as international diving permits before leaving their home countries. Those permits would be in addition to regular driver's licenses, with the requirement designed to help Florida law-enforcement officers sort out traffic incidents.
But the Senate, following an earlier move by the House, voted unanimously this week to repeal the law because of the consternation it caused. Gov. Rick Scott is expected to quickly sign the repeal, which Senate President Don Gaetz, R-Niceville, said is designed to make sure foreign visitors know the "welcome mat" is out.
QUOTE OF THE WEEK:
"As we all come back from Passover and Easter, that's when, as (former Senate) President (Tom) Lee said, the smell of death will be in the air, because bills will begin to die that haven't been heard."--- Senate President Don Gaetz, R-Niceville, referring to former President Tom Lee and the hopes of numerous lobbyists and interest groups watching their bills wither.
Perception is compiled weekly and distributed to AFC members.
Special thanks go to the members of the AFC legislative committee for their contributions to this issue of Perception.
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