Unfunded pension obligations are a “ticking time bomb” for cities and counties across Florida, according to a new report.
The report, from researchers at Florida State University, found that local government’s have failed to set aside enough money to fund generous pension and health care plans for public employees. Now, as baby-boomers reach retirement, pension obligations are putting a serious strain on already tight municipal budgets.
The problem is affecting nearly every large city in Florida. Miami, one of the worst offenders, only set aside $74 million of the $100 million it owed in 2009, the Miami Herald reports. Orlando and Fort Lauderdale underfunded their pension plans by 30%.
On average, pension obligations are nearly 10% of Florida cities’ annual spending, the report says. In Miami and St. Petersburg, retirement costs are more than 50% of total payrolls.
The study comes on the heels of Florida Gov. Rick Scott’s $65 billion budget proposal, which includes a sweeping overhaul of the state employee pension system. Under Scott’s plan, public workers would have to contribute to their pensions for the first time in more than three decades.
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