In an op-ed, Naples Mayor John Sorey takes a strong stand on reforming local city pensions, citing the need for the legislature to codify the current Department of Management Services interpretation that allows cities to pay for minimum chapter benefits for police and fire pensions using insurance premium tax revenues before they are required to use those same funds toward providing extra benefits.
Sorey writes that prior to 2012, DMS required insurance premium tax dollars be used to fund extra benefits for police and firefighter pension plans, and that because of this cities lost incentive to identify cost savings under threat of losing tax dollars. In 2012, DMS reversed their interpretation, allowing municipalities to direct tax dollars toward the minimum required benefits before funding additional benefits.
Despite the DMS reversal, investment leaders and local governments fear that a future contradictory interpretation could bring a return to the problem, or that unions will challenge the interpretation in court, draining resources toward court battles versus benefits and wasting taxpayer dollars.
Sorey’s solution requires changing statute to make it consistent with the current DMS interpretation; however the proposals being forwarded by the Senate do not accomplish what Sorey and his allies desire, and to the contrary, Sorey suggests these measures could impose new mandates on local taxpayers without offering relief from “ever-increasing pension benefits.”