Curry warns of 30-percent property tax increase if sales tax idea not supported

[TheCat]

I think there is, as others have pointed out, too many unknowns and the whole 3 mil increase is a scare tactic. Can someone point us to the actual math involved?  How the having a future funding source 12 years from now will  translate into keeping the payments low enough to help in any real way...without borrowing?

Not even the mayor's office is prepared to answer your questions, let alone tacha.

This is my understanding of the pension plan:

Mayor: The sky is falling and I have a plan
Voters: What is the plan?
Mayor: This plan is our only option. It is the best plan we have.
Voters: Sounds interesting, so what is it?
Mayor: I'm not going to raise your taxes unless you don't vote for my plan.
Voters: Okay, what is the plan?
Mayor: Stop being critical and please get behind this, it is our only option.
Voters: So, you're really not going to tell us.
Mayor: No.

Tacha, the better solution is to just pay our obligation. It will suck for 15 years vs it sucking for the next 45 years.

Arguing that Curry's plan is the best option because the other fancy options aren't workable isn't a defense. I wouldn't encourage a friend to go to a payday loan place even if they were in desperate straights nor would I tell him to work a street corner to earn a few bucks because that was the best most immediate plan.

This plan is absolutely irresponsible.

[TheCat]

The whispers I hear coming from the mayor's office, the goal is to free up around $50 million a year.

In order to do that, Curry is willing to put Jacksonville in a more precarious financial predicament. He doesn't want to be the mayor that raised our taxes.

We need to keep in mind, Curry is on a trajectory for national politics. Everything he is deciding is in consideration of his political future.

Tacha, I propose a one mil increase. That's the best option. We will bring in around $50 million (even more as property values increase). We'll be able to come up with a bjp2 and we'll see our obligation drop significantly in 15 years instead of remaining at such high numbers over the next 45 years.

That was easy!

[Tacachale]

I think there is, as others have pointed out, too many unknowns and the whole 3 mil increase is a scare tactic. Can someone point us to the actual math involved?  How the having a future funding source 12 years from now will  translate into keeping the payments low enough to help in any real way...without borrowing?

Not even the mayor's office is prepared to answer your questions, let alone tacha.

This is my understanding of the pension plan:

Mayor: The sky is falling and I have a plan
Voters: What is the plan?
Mayor: This plan is our only option. It is the best plan we have.
Voters: Sounds interesting, so what is it?
Mayor: I'm not going to raise your taxes unless you don't vote for my plan.
Voters: Okay, what is the plan?
Mayor: Stop being critical and please get behind this, it is our only option.
Voters: So, you're really not going to tell us.
Mayor: No.

Tacha, the better solution is to just pay our obligation. It will suck for 15 years vs it sucking for the next 45 years.

Arguing that Curry's plan is the best option because the other fancy options aren't workable isn't a defense. I wouldn't encourage a friend to go to a payday loan place even if they were in desperate straights nor would I tell him to work a street corner to earn a few bucks because that was the best most immediate plan.

This plan is absolutely irresponsible.

I've got to say it's odd to see Metro Jacksonville principals arguing that the status quo is a-ok, and if we just keep doing the same things, everything will work out fine. I'm not sure I've seen anyone besides the "Concerned Taxpayers" guy actually argue that our current payment schedule of paying tens of millions of dollars out of the general fund indefinitely is sustainable or advisable.

[Tacachale]

The whispers I hear coming from the mayor's office, the goal is to free up around $50 million a year.

In order to do that, Curry is willing to put Jacksonville in a more precarious financial predicament. He doesn't want to be the mayor that raised our taxes.

We need to keep in mind, Curry is on a trajectory for national politics. Everything he is deciding is in consideration of his political future.

Tacha, I propose a one mil increase. That's the best option. We will bring in around $50 million (even more as property values increase). We'll be able to come up with a bjp2 and we'll see our obligation drop significantly in 15 years instead of remaining at such high numbers over the next 45 years.

That was easy!

A one mill increase means you've only got $212 million to go. Until it goes up again, next fiscal year.

[strider]

The whispers I hear coming from the mayor's office, the goal is to free up around $50 million a year.

In order to do that, Curry is willing to put Jacksonville in a more precarious financial predicament. He doesn't want to be the mayor that raised our taxes.

We need to keep in mind, Curry is on a trajectory for national politics. Everything he is deciding is in consideration of his political future.

Tacha, I propose a one mil increase. That's the best option. We will bring in around $50 million (even more as property values increase). We'll be able to come up with a bjp2 and we'll see our obligation drop significantly in 15 years instead of remaining at such high numbers over the next 45 years.

That was easy!

A one mill increase means you've only got $212 million to go. Until it goes up again, next fiscal year.

Three times 47.5 mil (to use your number) equals 142.5 mil so leaves 117.5 mil out of the general fund.

By using the funny math method, we are hoping for a reduction of about 50 million so we still have to pay 210 mill out of the general fund?

How does this equate to keeping the forecast increases at bay?  Are the forecast increases in the pension debt payments just that, like the forecast that it may or may not rain at 2 PM next Sunday right over city hall or is it real?  If it is real, where can we see those numbers for real?

Still wondering where I can see the answer to this:

Can someone point us to the actual math involved?  How the having a future funding source 12 years from now will  translate into keeping the payments low enough to help in any real way...without borrowing?

This whole thing reminds me of a shell game ... can you guess where the money really is coming from?

Other than the charts put out in the TU article, does the city have charts showing what they believe to be going to happen if this sales tax idea passes? 

Another question:  Where is the hundreds of thousands (if not millions) of dollars coming in from to campaign to get this measure passed?  And why are they donating those funds?

[TheCat]

The whispers I hear coming from the mayor's office, the goal is to free up around $50 million a year.

In order to do that, Curry is willing to put Jacksonville in a more precarious financial predicament. He doesn't want to be the mayor that raised our taxes.

We need to keep in mind, Curry is on a trajectory for national politics. Everything he is deciding is in consideration of his political future.

Tacha, I propose a one mil increase. That's the best option. We will bring in around $50 million (even more as property values increase). We'll be able to come up with a bjp2 and we'll see our obligation drop significantly in 15 years instead of remaining at such high numbers over the next 45 years.

That was easy!

A one mill increase means you've only got $212 million to go. Until it goes up again, next fiscal year.

And, how does Curry's plan propose to pay the obligation over the next 15 years?

[Tacachale]

This is getting all over the place, but I'll say a few more things here. The sales tax would be dedicated to the pension and last for 30 years. That would reduce the annual contributions because the future revenue would be factored into the payments. Millage tax can't be dedicated to any one purpose, so it won't have this effect.

Beyond that, there are several options for leveraging future revenue for bigger payments now. Curry has talked about several in the Times-Union (despite people claiming that he's not giving details or whatever). It doesn't sound like anything is set on this, but they're possibilities.

A millage hike could be used for this; the best way would be to raise it enough to pay down a serious chunk of debt every year, and not just tread water. However, that would be a big hike. As the article quoted here says, 30% or 3.43 mills would generate $163 million a year, which would get close to covering the annual payment currently going to debt (right now, we're spending $75 million on the actual benefits and $185 million on debt). A one mill increase would just be a bandaid. It might provide some budget relief in the short term, but it won't have any more effect in really conquering the problem than the 1 mill hike that happened under Mayor Brown or the hikes that preceded it. And that's even if we could ensure the money actually goes to the pension in the future, which we can't.

[The_Choose_1]

If the sales TAX isn't voted for Curry and he goes ahead with a 30% property TAX increase he will be a one term Mayor For sure. I'm not a fan of the cops here in Jacksonville getting these golden parachute Pensions. You know most cops will never have to kill anyone or even draw their guns. And no one was forced being a cop. I feel on average that the firefighter has a better chance at death and here in Jacksonville Florida they have the same golden parachute Pensions. 

[TheCat]

The sales tax would be dedicated to the pension and last for 30 years. That would reduce the annual contributions because the future revenue would be factored into the payments.

Okay, but we don't have any numbers to support this theory.

Millage tax can't be dedicated to any one purpose, so it won't have this effect.

I don't think this is true but I will have to look more into it. I'm fairly certain there is a way to dedicate property tax revenues to a for something particular. If you remember, Jax libraries tried to do this. Also, I think there are several counties in which a portion of their property revenues has to go to organizations that work  with under-privileged children, their version of Jacksonville Children's Commission.

It might provide some budget relief in the short term, but it won't have any more effect in really conquering the problem than the 1 mill hike that happened under Mayor Brown or the hikes that preceded it. And that's even if we could ensure the money actually goes to the pension in the future, which we can't.

You know, I don't actually know how much comes in from bjp. Is it more than $50 million?

[Tacachale]

Millage tax can't be dedicated to any one purpose, so it won't have this effect.

I don't think this is true but I will have to look more into it. I'm fairly certain there is a way to dedicate property tax revenues to a for something particular. If you remember, Jax libraries tried to do this. Also, I think there are several counties in which a portion of their property revenues has to go to organizations that work  with under-privileged children, their version of Jacksonville Children's Commission.

Totally different situation. The library was trying to create its own district with its own property tax separate from what goes into the general fund (it failed). The School Board has its own tax separate from the general fund as well. For the City Council to just raise property taxes, it would go to the general fund, and there's no way to commit that to specific uses. It's decided in the annual budgets.

You may recall when the City Council had to raised the millage rate to cover our ass the last time. All well and good for one year, but the next year Brown submitted a budget that factored the new money into services that would have been cut, rather than cutting them and putting the money toward the pension or banking it (as he would have done if he was really against the hike). The council raked him over the coals for it that year, then everybody forgot about it. Now, here we are.

It might provide some budget relief in the short term, but it won't have any more effect in really conquering the problem than the 1 mill hike that happened under Mayor Brown or the hikes that preceded it. And that's even if we could ensure the money actually goes to the pension in the future, which we can't.

You know, I don't actually know how much comes in from bjp. Is it more than $50 million?

I'd have to check, but the difference there was that they used the 30-year revenue to take out bonds to fund the different projects in sequence. It has a long tail to pay off bonds on the projects that are already done. As I've said, it doesn't sound like they've decided on how or if the pension sales tax would be leveraged, but there are a number of ways they could do it.

[strider]

Tacachale:As I've said, it doesn't sound like they've decided on how or if the pension sales tax would be leveraged, but there are a number of ways they could do it.

The other thought is there is no restriction on any "freed up" funds gained by the sales tax funny math idea so we can just give that away at will and still not really be better off.

Also, I still have not seen any thoughts on how that funny math actually works, have you? How does having a future sales tax that begins in 12 to 13 years get used to lower our debt payments today?  Does it at all?  Some of what is said in the media indicates it won't be allowed so then what?  Issue bonds?  Do they have to be paid prior to the start up of receiving the sales tax or can they be 12 to 13 year bonds?  If the bond money is used for something else other than paying down pension debt (and that can be proved) won't that debt have to be paid in some other way? This sales tax is encumbered to only the pension, right? So does that mean any funds borrowed against it is encumbered the same way or is it free to be spent any old way they like?

It appears that the ambiguity of the whole thing is what is making it smell bad to many. Maybe this or maybe that,  maybe we'll figure all that out later, meanwhile, just pass this or else!

[spuwho]

https://www.youtube.com/v/QV7dDSgbaQ0

[strider]

Tacachale: My question in all of this is, what's a better plan? In the choice between the sales tax plan and a 30% property tax hike, I'm going for the sales tax. If there's a better option than those, where is it?


What about this idea?

http://www.just-vote-no.com/alternatives/joe-andrews-on-pay-go-solution/

Apparently it is how it used to be and the idea has been floated to the Mayor's office without receiving a proper comment back other than an incorrect response about it's legality.

[strider]

In addition, this may be a worthwhile read:

http://www.just-vote-no.com/pay-go-model-spreadsheet/

This is also a download of questions asked by Jacksonville's TRUE commission that may be worthwhile as well:

http://www.just-vote-no.com/an-apparent-requirement-that-a-yes-vote-guarantees-future-pensions-like-it-or-not/

[TheCat]

This plan is pointless and a waste of our time. 

Remembering, that a one mill tax increase will generate around $45 million. I think that's what tacha said.

The below chart is derived from the actuarial report, which you can find on the below link, it's the last two pages.

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

The figures are in millions and represent our annual contribution under different "scenarios".

Scenario 1: COJs current schedule
Scenario 2 & 3: Different schedules under Curry's sales tax.

Notes:

2030 is when the sales tax kicks in.

Over the next 4 years, the payments are identical under each scenario.

Payments under scenario 2 & 3 begin to balloon around 2039. Conveniently, the report does not extend  2060 when Curry's sales tax plan expires. Anyone want to place bets as to how the payments will go post-2045?

The amount of money we are trying to "free-up", at least over the next 15 years, is not in the high 100s of millions. It's between $50 to $75 million, a manageable amount. An amount we can raise without handcuffing the city to a curry's tax plan.