Cypen & Cypen
OCTOBER 5, 2006
Stephen H. Cypen, Esq., Editor
1. FLORIDA WILL DISTRIBUTE OVER $10 MILLION IN “SUPPLEMENTAL” PREMIUM TAX MONIES TO FIRE PLANS:
The Florida Division of Retirement has announced that $10,532,287 in “supplemental” premium tax monies will be distributed to eligible fire plans. We are often asked why fire plans get a supplemental distribution and how it works. Well, with a little help from Trish, here is the story. Section 175.122, Florida Statutes, limits fire plans receiving monies in excess of that produced by one-half of the excise tax as provided for in Chapter 175, Florida Statutes. (Note that the tax under Chapter 175, Florida Statutes, is 1.85%, while the tax under Chapter 185, Florida Statutes, for police, is .85%.) Resulting “limitation” monies are transferred to the Department of Revenue’s Firefighters’ Supplemental Compensation Trust Fund. Under Section 633.382, Florida Statutes, public employees are eligible to receive a reimbursement from the Department of Revenue for the educational incentive dollars paid to firefighters. On or before each October 1, monies transferred from the Municipal Police Officers’ and Firefighters’ Retirement Trust Fund Office, but not needed to support the Department of Revenue’s Supplemental Compensation Program, are redistributed that year. Any municipality that initially received less than 6% of its fire department payroll shall be entitled to receive additional monies, in excess of the one-half of the excise tax, not to exceed 6% of its fire department payroll. For calendar year 2005, the limitation resulted in $17,551,640 transferred to the Department of Revenue. After the Department of Revenue made payments to support the Supplemental Compensation Program, the balance of $10,532,287 is available for distribution to cities that were otherwise limited by Section 175.122, Florida Statutes. Got it?
2. HOW DOES THE OTHER HALF LIVE?:
According to the Federal Reserve’s “Family Finances” study, most Americans do not trade stocks and real estate has not made them millionaires. In fact, according to a SmartMoney report of the study, half of all families have total financial assets of less than $23,000! And the median net worth of homeowners -- their house, their car, their dog and anything else on the planet they can lay claim to -- is $184,000. The median income of college graduates is a respectable $73,000. However, astonishingly, 7 of 10 adults are not college graduates. Average household income is $71,000 but only 20% of families earn that much; half of all families earn under $43,000. It’s not going to be pretty.
3. ASSET ANGST:
The top financial concern of America’s wealthiest 1% is that the next generation will have it tougher financially. The very wealthy, 66% of whom say their estates will be worth more than $5 Million, also worry that:
These data, from a U.S. Trust survey of affluent Americans, were reported in BusinessWeek.
4. QUOTE OF THE WEEK:
“If you want things to stay as they are, things will have to change.” Giuseppe Tomasi di Lampedusa
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Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.