Gov. Rick Scott drops plan to 'recapture' pension savings from local governments, sources say

TALLAHASSEE, Fla. — Gov. Rick Scott appears to have dropped his push to make counties, school boards and other governments return millions of dollars in cost savings earned this year when public employees were forced to contribute 3 percent to their retirements.

Those familiar with Scott's budget proposal -- to be released Wednesday -- also say the governor will not call for increasing the 3 percent payments demanded of 655,000 teachers, police officers, firefighters and other public workers who belong to the Florida Retirement System.

Local governments statewide have been anxious about Scott's earlier talk of recouping dollars that they retained when employee contributions were demanded this year for the first time since 1974.

In Palm Beach County, the so-called recapture plan could've cost the School Board $55 million, the Sheriff's Office $18.4 million, and the county government $16.5 million in pension savings. That money was generally used by the local governments this year to cover other budget holes.

Scott, though, had labeled these dollars a "windfall" and spoke of directing the money toward covering 100 percent of the $128 billion retirement system's liability.

The account is currently considered 87 percent funded, a level most analysts have declared financially healthy. But Scott attacked Democratic opponent Alex Sink in last year's governor's race for allowing the pension system to be less than 100 percent funded while she was state chief financial officer.

He has said he remains committed to that target, but trying to pull millions of dollars back from governments struggling with an economy-driven decline in their chief revenue source -- property-tax dollars -- doesn't look likely to be included in the spending plan he recommends to the Legislature.

"Our legislative priority was that they leave those dollars in the communities from which they came," Cragin Mosteller, spokeswoman for the Florida Association of Counties, said Monday. "If they choose to do that, we support it."

Sen. John Thrasher, R-St. Augustine, said Scott's idea had gained little traction among lawmakers, who heard from local government officials who warned that losing the savings would force another round of budget cuts in many communities.

"I think it fell on deaf ears," Thrasher said of Scott's talk of recapturing the dollars. "We knew it'd be hard to do, and maybe not fair to do."

While Scott had considered asking lawmakers to the local governments to return millions, he was not proposing that the demand be extended to the Legislature.

Lawmakers were able to use about $1 billion in pension savings last year as a partial patch on a state budget struggling with almost a $4 billion shortfall.

In the plan Scott is set to unveil this week, he will be forced to cover a $2 billion gap, with tax receipts still sluggish in the state's faltering economy. Scott has already signaled that he plans to cut health and social service programs to avoid making even deeper reductions in public school spending.