House moves to dump retiree subsidies

Mar 24, 2010

Drawing criticism from employee unions who accuse lawmakers of breaking a promise, the House moved forward Tuesday with a plan to eliminate subsidies that help government retirees pay health-insurance costs.

The top House budget committee approved doing away with the subsidies, which began in the 1980s and now provide up to $150 a month to former employees of state government and other agencies, such as school boards and some cities.

Gary Rainey, a vice president of the Florida Professional Firefighters, called the plan "patently unfair'' and said it breaks a promise to employees who count on the subsidies to defray costs.

"I would urge you not to burden those who are retired (and) put in their 30 or 40 years,'' Rainey told the House Full Appropriations Council on Education & Economic Development.

But council Chairman David Rivera, R-Miami, said the plan would save about $200 million for the state as lawmakers grapple with a budget deficit of as much as $3 billion for the fiscal year that starts July 1. He said tough decisions have to be made throughout the budget.

"This is an optional benefit that the state has given over the years,'' Rivera said.

The Senate's proposed budget, which will go before its top appropriations committee Thursday, does not include eliminating the subsidy. But the Senate would require about 26,000 current state employees to start paying a small portion of their insurance premiums --- after being exempted from paying premiums in the past.

Those employees include lawmakers and high-ranking appointed officials, though they also include some lower-paid workers who do not have civil-service protections. Under the Senate proposal, they would start paying $5 a month for individual coverage and $18 a month for family coverage --- 10 percent of the amounts paid by typical rank-and-file workers.

Senate Ways and Means Chairman JD Alexander, R-Lake Wales, indicated earlier in the legislative session that he favored doing away with the free premiums. But the proposal in the Senate budget falls short of that.

The full House and Senate are expected to approve the budget proposals next week and then begin negotiating a final spending plan for the 2010-11 fiscal year. The insurance issues will be resolved during those negotiations.

But representatives of employee unions and a senior-advocacy group blasted the House proposal to end the subsidies for retirees. Subsidy amounts vary depending on how long retirees worked for the government, but the average during the 2007-08 fiscal year was about $105, according to a House analysis.

Doug Martin, a lobbyist and communications director for the American Federation of State, County and Municipal Employees, said a retiree who is not eligible for Medicare pays $1,018 a month for family coverage in the state group insurance plan. The subsidies help reduce those costs.

Critics of ending the subsidies said many public employees work for lower wages than they might earn in the private sector, in exchange for good benefits such as a secure retirement.

"I know there are thousands of public-employee retirees who are going to be lighting up your phones and e-mails,'' Barbara DeVane, secretary of the Florida Alliance for Retired Americans, told the House panel.

Capital Bureau Chief Jim Saunders can be reached at 850-228-0963 or by e-mail at jim.saunders@healthnewsflorida.org.