Florida may fave another retiree financial crisis, report suggests

Experts say solution starts at local level, budgeting yearly for future payments

TALLAHASSEE, Fla. – New data suggest that Florida could be facing another crisis when it comes to retirees, this one going beyond local pensions and into the world of health care.

Experts said the solution starts at the local level and budgeting yearly for future payments.

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Pension problems have been ongoing in the state. Unfunded liability for local governments has put future benefit burdens on taxpayers. The problem is so bad in Jacksonville that Rep. Janet Adkins called for an investigation earlier this month.

"Florida, as many of you know, is faced with approximately $11 billion in unfunded liability for pensions," said Adkins. "Over $1.6 billion of that unfunded liability is associated with the Jacksonville Police and Fire Pension Fund."

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But a new report suggests that there could be another problem on the way. The LeRoy Collins Institute, a policy think tank, released data about another unfunded liability for local governments: health care benefits.

"It's a problem because it's a pay-as-you-go system, so a lot of the local governments are not really paying for those benefits of the future," said LeRoy Collins Institute Director Carol Weissert. "So they're paying today, but they're not paying for what they're going to have to pay for when these people retire."

The report said that cities and counties are facing an $8 billion shortfall in health care benefit liability for retirees.

A majority of Florida governments aren't setting aside future money for retiree benefits. It could become a bigger problem as more baby boomers start leaving the workforce.

Florida TaxWatch said both the pension problems and the health care problems have to be dealt with now.

"It really is a double whammy," said Robert Weissert, of Florida TaxWatch. "These work together to be obligations that add up to nearly $20 billion that Florida taxpayers will owe."

If the local governments aren't able to shore up their health care promises, it could mean that employees are out of luck or taxpayers are on the hook.