Pension fix only issue on Mayor Lenny Curry's agenda

[thelakelander]

Want a chance at money for a homeless day center? Pass the pension tax. City grants for downtown development? More money for public safety? Pass the pension tax. Want the mayor's backing in a political campaign? Support the pension tax. Duval County voters should get used to hearing this refrain from Mayor Lenny Curry, who is staking much of his political capital — and his first term — on an Aug. 30 referendum asking voters to approve a half-cent sales tax to pay down the city's enormous pension debt.

Everything else? It'll have to wait.

Think about the campaign under former Mayor John Delaney to sell the Better Jacksonville Plan sales tax to voters: A goody bag full of ambition and $2.2 billion worth of projects, spread across the city's diverse neighborhoods.

Curry's sales pitch is virtually the opposite. No commitments. No sky-high promises or glossy renderings of projects to come. There is no goody bag.

"This is about solving a problem once and for all," Curry said Friday.

Full article: http://jacksonville.com/news/2016-04-15/story/pension-fix-only-issue-mayor-lenny-currys-agenda-everything-else-takes-back

[spuwho]

I get it. He wants everyone to focus and pay attention to the pension issue.

But I still havent seen a compelling argument for the borrow now, pay later approach.

I also think that using a sales tax to pay for what is essentially a core municipal service is bad civic policy. It really should be bundled inside the property assessments.

[CCMjax]

Brilliant, once elected tell everyone not to expect much.  Then if nothing gets done in the first term that doesn't come back to haunt you since "well we had this pension thing we had to figure out."

[ronchamblin]

Curry's objective, by way of a half-cent sales tax increase, and the withholding of funds for projects targeting social needs, poverty, the homeless, and core development, is a move to encourage the city to financial stability and strength, so that these important projects can eventually be funded.  Certain critical funding for those in desperate need however, must somehow be addressed as an interim.

This kind of decision, because it is unpopular with many, offers evidence of the emerging quality of strong leadership.  Seeking more revenue for the city is necessary, as it would be in a typical famiy in financial straights, so that funding decisions can be made on sound logic according to the greatest need, and not on whether funds are available or on how to borrow money, or about where to cut expenditures on critical city responsibilities. 

Caution however to increased funding to the sheriff's department. Every million dollars carelessly spent on the sheriff's department, and on the "justice" system in general, is a million not available for decisions to fund programs, both economic and social, that would, if effectively implemented, eliminate the need, imagined or real, to increase the size of this swollen institution

The tendency of the sheriff's department to grow to obscene costs to the taxpayer, is due in part to the fact that the department does not have to compete in private enterprise.  This tendency can be overcome by strong and effective leadership from the sheriff.

[TheCat]

Curry's objective, by way of a half-cent sales tax increase, and the withholding of substantial funds for projects targeting social needs, poverty, the homeless, and core development, is a move to encourage the city to financial stability and strength, so that these important projects can eventually be funded.  Certain critical funding for those in desperate need however, must somehow be addressed as an interim until long term solutions can be funded.   

This kind of decision, because it is unpopular with many, offers evidence of the emerging quality of strong leadership.  The position is very necessary, as it would be in a typical family, if the city is to rise to financial health ... to a position wherein funding decisions are made on sound logic according to the greatest need, and not on whether funds are available or on how to borrow money, or about where to cut expenditures on critical city responsibilities.  The process of limiting expenditures, while at the same time being creative in making more money, is a sound path for any city in considerable debt ... eventually providing a base of financial stability and strength allowing decisions based on real need and the best paths to an improved quality of life for all citizens in our city.       

Caution however to increased funding to the sheriff's department and even the fire department, as these swollen institutions possess qualities similar to that of the military industrial complex, as there is a tendency to empire, demanding ever increased funding at the expense of societal mechanisms which, if properly addressed, would preclude, at least in the case of the sheriff's department, the necessity of funding its growth to one of obscene and wasteful levels. 

We should seek a measured decrease in the size of the sheriff's department, but only after a careful assessment of effective programs created to reduce societal inequalities and injustices that encourage desperation, great need, and a sense of loss ... and thus crime.  Every million dollars carelessly spent on the sheriff's department, and on the "justice" system in general, is a million not available for decisions to fund programs, both economic and social, that would, if effectively implemented, eliminate the need, imagined or real, to increase the size of these wasteful and swollen institutions.

Addendum: The tendency of any governmental agency or office such as a sheriff's department to descend to inefficiency and grow to obscene costs to the taxpayer, is due to the absent of the normal pressures of private enterprise, which forces efficiency.  This tendency can be overcome by strong and effective leadership from the sheriff.

Ron, with respect, I don't understand what you are saying. Can you give it to me in 3 sentences?

[TheCat]

Apparently, if we continue at current funding rates we'll cover 98% of the obligationby 2045. If we follow Curry's plan, we'll be at 58% to 65% of our obligation by 2045.

From the TU, 2/18/16

http://jacksonville.com/news/metro/2016-02-18/story/currys-plan-would-leave-pension-plans-only-partially-funded-after-30

Mayor Lenny Curry's proposed pension paydown plan would dial back how much the city contributes to its pension plans in the coming years, freeing up tens of millions of dollars annually that go can to other city services.

But because the city would be paying less for many years to its pension plan, it will take much longer to strengthen those plans so they are financially healthy enough to fully fund all the long-term pension payments the city must make to retirees, according to an actuarial report done this month for the city.

That report shows that 30 years from now, the city's Police and Fire Pension Fund would still be far short of having enough money to pay its long-term pension obligations if the city spreads out its payments the way Curry is considering.

The actuarial report shows that on Oct. 1, 2045, the Police and Fire Pension Fund's assets would be sufficient to pay 58 percent or 65 percent of the pension obligations earned by police and firefighters. The difference depends on the amount of contributions the city puts into the pension fund over that period.

In contrast, the funding schedule currently in place calls for heftier annual payments and would get the Police and Fire Pension Fund to a funding level on Oct. 1, 2045 sufficient to cover 98 percent of pension obligations... more on above link.

###

[TheCat]

Link to the actuarial study:

https://www.scribd.com/doc/299766293/Mayor-Curry-pension-plan-actuarial-report

[Tacachale]

So if we stay on the current funding schedule that cripples the annual budget and has been keeping the city from fulfilling basic functions for 8 years, we'll be almost OK in 29 years? Lol, good to know.

[TheCat]

I'm still brushing the surface of this plan but it's weird.

[spuwho]

Apparently, if we continue at current funding rates we'll cover 98% of the obligationby 2045. If we follow Curry's plan, we'll be at 58% to 65% of our obligation by 2045.

From the TU, 2/18/16

http://jacksonville.com/news/metro/2016-02-18/story/currys-plan-would-leave-pension-plans-only-partially-funded-after-30

Mayor Lenny Curry's proposed pension paydown plan would dial back how much the city contributes to its pension plans in the coming years, freeing up tens of millions of dollars annually that go can to other city services.

But because the city would be paying less for many years to its pension plan, it will take much longer to strengthen those plans so they are financially healthy enough to fully fund all the long-term pension payments the city must make to retirees, according to an actuarial report done this month for the city.

That report shows that 30 years from now, the city's Police and Fire Pension Fund would still be far short of having enough money to pay its long-term pension obligations if the city spreads out its payments the way Curry is considering.

The actuarial report shows that on Oct. 1, 2045, the Police and Fire Pension Fund's assets would be sufficient to pay 58 percent or 65 percent of the pension obligations earned by police and firefighters. The difference depends on the amount of contributions the city puts into the pension fund over that period.

In contrast, the funding schedule currently in place calls for heftier annual payments and would get the Police and Fire Pension Fund to a funding level on Oct. 1, 2045 sufficient to cover 98 percent of pension obligations... more on above link.

###

It a simple calculation of money over time. The more you put in now, the more value it has later.

The more you defer it, the less time it has to increase in value, or in this case, the interest on the bonds you had to buy, cuts into the final return.

As I have said earlier, this is a kick the ball down the field "solution" that doesn't solve anything, its political expediency.

The whole effort to get the state legislature to pass special laws permitting it, could have been spent convincing city council to start a gradual rise in the property tax to increase revenue over time. 

This is a clear example of what happens when a politico is stuck inside their dogma.

I think this referendum will not pass.

[TheCat]

So if we stay on the current funding schedule that cripples the annual budget and has been keeping the city from fulfilling basic functions for 8 years, we'll be almost OK in 29 years? Lol, good to know.

Tachahale, what do you understand that I am not understanding? Please note, I am genuinely asking. I'm not sparring.

The more I read about it, the worst it looks. So, I'm hoping for some enlightenment from supporters of the plan.

The way I'm reading it, We're going into more debt for the pension, and we are opening the door to other debt.  By using our future sales tax revenue as a current asset, we'll attempt to issue bonds for, I guess, not the Jaguars(?), but vital essential city functions.

[TheCat]

Apparently, if we continue at current funding rates we'll cover 98% of the obligationby 2045. If we follow Curry's plan, we'll be at 58% to 65% of our obligation by 2045.

From the TU, 2/18/16

http://jacksonville.com/news/metro/2016-02-18/story/currys-plan-would-leave-pension-plans-only-partially-funded-after-30

Mayor Lenny Curry's proposed pension paydown plan would dial back how much the city contributes to its pension plans in the coming years, freeing up tens of millions of dollars annually that go can to other city services.

But because the city would be paying less for many years to its pension plan, it will take much longer to strengthen those plans so they are financially healthy enough to fully fund all the long-term pension payments the city must make to retirees, according to an actuarial report done this month for the city.

That report shows that 30 years from now, the city's Police and Fire Pension Fund would still be far short of having enough money to pay its long-term pension obligations if the city spreads out its payments the way Curry is considering.

The actuarial report shows that on Oct. 1, 2045, the Police and Fire Pension Fund's assets would be sufficient to pay 58 percent or 65 percent of the pension obligations earned by police and firefighters. The difference depends on the amount of contributions the city puts into the pension fund over that period.

In contrast, the funding schedule currently in place calls for heftier annual payments and would get the Police and Fire Pension Fund to a funding level on Oct. 1, 2045 sufficient to cover 98 percent of pension obligations... more on above link.

###

It a simple calculation of money over time. The more you put in now, the more value it has later.

The more you defer it, the less time it has to increase in value, or in this case, the interest on the bonds you had to buy, cuts into the final return.

As I have said earlier, this is a kick the ball down the field "solution" that doesn't solve anything, its political expediency.

The whole effort to get the state legislature to pass special laws permitting it, could have been spent convincing city council to start a gradual rise in the property tax to increase revenue over time. 

This is a clear example of what happens when a politico is stuck inside their dogma.

I think this referendum will not pass.

According to the TU there is a $3 million marketing plan in the works for this referendum. If there isn't organized opposition to this plan I can see it pass.

[mtraininjax]

I get it. He wants everyone to focus and pay attention to the pension issue.

But I still havent seen a compelling argument for the borrow now, pay later approach.

I also think that using a sales tax to pay for what is essentially a core municipal service is bad civic policy. It really should be bundled inside the property assessments.

+1

The city could be burning down around him and he'd still be clutching to his phrase, "we must pay for the pension" before we pay for emergency operations. I voted for him, but so far, he's showed me little else but that he can repeat the same sentence over and over again.

He needs a new tune! This one is boring.....

[camarocane]

Apparently, if we continue at current funding rates we'll cover 98% of the obligationby 2045. If we follow Curry's plan, we'll be at 58% to 65% of our obligation by 2045.

From the TU, 2/18/16

http://jacksonville.com/news/metro/2016-02-18/story/currys-plan-would-leave-pension-plans-only-partially-funded-after-30

Mayor Lenny Curry's proposed pension paydown plan would dial back how much the city contributes to its pension plans in the coming years, freeing up tens of millions of dollars annually that go can to other city services.

But because the city would be paying less for many years to its pension plan, it will take much longer to strengthen those plans so they are financially healthy enough to fully fund all the long-term pension payments the city must make to retirees, according to an actuarial report done this month for the city.

That report shows that 30 years from now, the city's Police and Fire Pension Fund would still be far short of having enough money to pay its long-term pension obligations if the city spreads out its payments the way Curry is considering.

The actuarial report shows that on Oct. 1, 2045, the Police and Fire Pension Fund's assets would be sufficient to pay 58 percent or 65 percent of the pension obligations earned by police and firefighters. The difference depends on the amount of contributions the city puts into the pension fund over that period.

In contrast, the funding schedule currently in place calls for heftier annual payments and would get the Police and Fire Pension Fund to a funding level on Oct. 1, 2045 sufficient to cover 98 percent of pension obligations... more on above link.

###

It a simple calculation of money over time. The more you put in now, the more value it has later.

The more you defer it, the less time it has to increase in value, or in this case, the interest on the bonds you had to buy, cuts into the final return.

As I have said earlier, this is a kick the ball down the field "solution" that doesn't solve anything, its political expediency.

The whole effort to get the state legislature to pass special laws permitting it, could have been spent convincing city council to start a gradual rise in the property tax to increase revenue over time. 

This is a clear example of what happens when a politico is stuck inside their dogma.

I think this referendum will not pass.

Maybe I'm incorrect, but I thought once the bill passed, all new city employees will be on a 401k. This bill would terminate the pension's growth overnight. On top of that, all contributions would increase by 2% across the board. 

[fieldafm]

A few VERY important points of clarification:

withholding of substantial funds for projects

I understand that most people in this world do not pay much attention to municipal budgets, but over the past several years... most of the new 'spending' is in the form of debt (generally, debt is paid back over a period of time). There isn't this vast pot of money that is buried under City Hall, instead a proverbial credit card has been used. An examination of the growth of the 'banking fund' (which is a nice way of saying 'credit card') illustrates this point.

'Withholding of substantial funds' is not an accurate portrayal, as new spending is by and large coming from going into more debt. I think if most people view the city budget under that much more accurate characterization... then you'll appreciate that going into more and more debt is probably not the most prudent financial decision. At some point, that becomes unsustainable. Most people that really study the municipal budget recognize that we, as a city, are at that point.

Tachahale, what do you understand that I am not understanding? Please note, I am genuinely asking. I'm not sparring.

The more I read about it, the worst it looks. So, I'm hoping for some enlightenment from supporters of the plan

What you need to understand, is that in order to get 98% funded... the portion of current city spending dedicated to paying pension obligations (mainly ad valorum revenue) would drastically increase over the next 20 years without a dedicated source of new revenue. I apologize for not having the numbers in front of me so not trying to bring hyperbole to the discussion, but on rough numbers something like 35% of the current budget is allocated towards the pension. That increases to something like over 50% in a short period of time. Without a new dedicated source of funding, that would grow to 60%+ in the medium term... and in the long term would be much greater.    Again, rough numbers... so if I'm off a little, the point is to illustrate an 'accurate-ish' portrayal of what the future holds.

To put that in perspective, if you brought your family of 5 to V Pizza in San Marco and bought an 18" pizza... 6" of that pizza today goes to someone else (the pension), 4" is going to pay for pizza you bought yesterday (bond obligations.. how municipal governments borrower money), you have to have 2" mandated by law to placed in a to-go box (mandated reserves) and then the rest you get to eat and split between your family of 5 people. 

If you went in 5 years from now your same family of 5 now gets 9" of that pizza set aside for someone else (the pension), 4" to pay for pizza you bought 5 years and 1 day ago (bond obligations), 2" must go in a to-go box (mandated reserves) and the rest to be split between your family of 5 people. Those 5 people are going to go home substantially more hungry than they were 5 years ago (meaning less potholes are being fixed, less police officers are arresting bad guys, the streetlights in your neighborhood are never coming back on, etc). You may then start to worry about the ability of your sons and daughters to be properly nourished... and your wife is really cranky because she hasn't had much to eat lately.

In 10 years from now, almost 11" of that pizza is going to go to paying someone else (pension), 4" to pay for pizza your bought 10 years and 1 day ago (assuming you haven't used your credit card to start buying extra pizzas in the last 10 years... unlikely because your family is really hungry and malnourished)... and so on. 

You either have to make a bigger pizza (raise property taxes)... something that the owner of V Pizza is unlikely to do, because no one would want to come into his restaurant anymore (customers respond to jacking up prices by not coming into your restaurant... much the way that voters would likely not vote for a property tax increase.. and you'd be fooling yourself if you think that voters would go to the polls in August to jack up their property taxes to pay for the pension)... or you have to create another dedicated source of food product (revenue), say a calzone (sales tax), to start giving someone else (pension obligations) so that your family of 5 doesn't end up with only 4" of people to eat.