Lawsuit Filed Against Curry's Pension Sales Tax

[Tacachale]

^Honestly, I think the main thing wrong with the plan for a lot of people is that Curry's the one proposing it.

personally I'm just looking for bold leadership....we didn't get that with Mayor Brown...and some (including you I think) suggested that Mayor Curry would be strong....this just seems like a cop out

I said that Curry would be a more capable mayor than Brown, and he has been. I said he would do well in the areas that are his strengths - the budget and hiring staff - and he has. I don't remember specifically talking about the pension, but I figured Curry would come up with a plan for it much more effectively than Brown, who allowed the crisis to continue ballooning through his term, and he has.

There are downsides to the plan, but there are upsides as well that get short shrift here. Part of that, I'm afraid, is the aversion that has developed to anything related to Curry. I really believe that if this plan had been proposed by someone else, it would get a much different reception in these parts.

[Tacachale]

How many tax dollars have been spent lobbying Tally, bullying city employees, screaming "the SKY is FALLING!"?

100% agree. It'd be one thing if he was advocating for something which had been thoroughly publicly vetted with some measure of consensus of experts, PRIOR to securing it as the "only" option.

In addition to the tax dollars, imagine the amount of donated dollars he's wasted having nonprofits listen to his apocalypse pitch for a payday loan.

Are all sales tax referedums "pay day loan"?

Was the Better Jacksonville Plan with all the facilities built just a "pay day loan?" If we were to push a half cent sales tax to build new school, is that a "pay day loan"?

No they are not. They were taxes collected IMMEDIATELY to pay for expenses being incurred IMMEDIATELY. They weren't postponing paying for expenses already incurred,  and then paying for the 'payment holiday'  14 years later, which is essentially what is being voted on now.   

No. You take out debt in bonds from lenders to build something and the tax pays the bonds off for the next 30 years. There are some differences, but the main one is you already have the liability with the pension fund and it is over a longer period. Most likely, the city will bond in this case as well or use the future dedicated assets to its advantage with lenders for better rates.

Excellent point, if a sales tax in the future is a "pay day loan", then one now is even more so, as most times the city takes out bonds to build things up front. Hence why it doesn't take fully 30 years to actually build things funded that way.

Basically, sales taxes provide dedicated funding sources. You see short term gains for long term payments normally. I still don't see the negatives on this plan except that a portion of the max 8% sales tax is taken up. We still have 1% to play with if we wanted in the future for infrastructure or schools.

In the end, it's all semantics. The banks will see that Jacksonville has a dedicated funding source to pay this off and Jacksonville will begin to move forward. Hopefully with a good deal from lenders, it is a wash on the cost with inflation and interest.

You are completely ignoring the facet that makes this a payday loan situation. The promise of future revenues that will not come for many years, is used to reduce the existing pension payments, so that money (from the reduction of payments) can be spent on something else. 

The BJP bonds are essentially a mortgage on the projects that it built. The tax,  the construction of the projects and the bond payments all started immediately after passage.   

It's variants of the same concept. Taking out a bond against future dedicated income, versus reducing annual payments based on future dedicated income. Neither is really like an actual payday loan, which is an unsecured short term loan in advance of a payday, but it's good rhetoric.

[FlaBoy]

^ Yes.

Stephen, what was Mayor Brown's plan?

[Tacachale]

^Honestly, I think the main thing wrong with the plan for a lot of people is that Curry's the one proposing it.

personally I'm just looking for bold leadership....we didn't get that with Mayor Brown...and some (including you I think) suggested that Mayor Curry would be strong....this just seems like a cop out

I said that Curry would be a more capable mayor than Brown, and he has been. I said he would do well in the areas that are his strengths - the budget and hiring staff - and he has. I don't remember specifically talking about the pension, but I figured Curry would come up with a plan for it much more effectively than Brown, who allowed the crisis to continue ballooning through his term, and he has.

There are downsides to the plan, but there are upsides as well that get short shrift here. Part of that, I'm afraid, is the aversion that has developed to anything related to Curry. I really believe that if this plan had been proposed by someone else, it would get a much different reception in these parts.

actually brown came up with a plan that actually paid the pension debt.  This one partially pays it at an absurd final price. So in terms of accounting, this is much much worse than brown.

^ Yes.

Stephen, what was Mayor Brown's plan?

Brown failed to deal with the problem for 4 years, despite the fact that Mayor Peyton had left him a decent plan when he left office. He rejected the Peyton plan, but wasn't able to come up with any workable alternative, which allowed the crisis to keep spiraling. One of his plans involved getting a big lump payment from JEA to pay down the pension obligation, in exchange for greatly reducing JEA's annual contribution to the city. Of course JEA was all about it, but fortunately the Council rejected it. Another involved borrowing a big lump payment to pay down the debt. Good on paper, but there was no funding mechanism, and he threatened to veto any attempt to raise taxes to actually pay for his own plan, which killed it.

[Tacachale]

^Honestly, I think the main thing wrong with the plan for a lot of people is that Curry's the one proposing it.

personally I'm just looking for bold leadership....we didn't get that with Mayor Brown...and some (including you I think) suggested that Mayor Curry would be strong....this just seems like a cop out

I said that Curry would be a more capable mayor than Brown, and he has been. I said he would do well in the areas that are his strengths - the budget and hiring staff - and he has. I don't remember specifically talking about the pension, but I figured Curry would come up with a plan for it much more effectively than Brown, who allowed the crisis to continue ballooning through his term, and he has.

There are downsides to the plan, but there are upsides as well that get short shrift here. Part of that, I'm afraid, is the aversion that has developed to anything related to Curry. I really believe that if this plan had been proposed by someone else, it would get a much different reception in these parts.

actually brown came up with a plan that actually paid the pension debt.  This one partially pays it at an absurd final price. So in terms of accounting, this is much much worse than brown.

^ Yes.

Stephen, what was Mayor Brown's plan?

Brown failed to deal with the problem for 4 years, despite the fact that Mayor Peyton had left him a decent plan when he left office. He rejected the Peyton plan, but wasn't able to come up with any workable alternative, which allowed the crisis to keep spiraling. One of his plans involved getting a big lump payment from JEA to pay down the pension obligation, in exchange for greatly reducing JEA's annual contribution to the city. Of course JEA was all about it, but fortunately the Council rejected it. Another involved borrowing a big lump payment to pay down the debt. Good on paper, but there was no funding mechanism, and he threatened to veto any attempt to raise taxes to actually pay for his own plan, which killed it.

Brown created a plan with the input of some of the actual conservative leaders of this community, only to have a combatative Bill Gulliford go full obstructionist after it had been hammered out.

But it fully paid the obligations starting this year, and didn't borrow money with interest rates and sixteen years before an actual payment to do so.

That's not the case. The 2014 plan died because there was no dedicated funding for the increased payments, and he refused to consider tax revenue to fund the plan he created. His exact quote was "I don't support a sales tax... I don't support a property tax. I don't support any tax [increase], period", and he threatened to veto the Council if they tried it. And he never managed to create another revenue source. And this was over 3 years after he rejected Peyton's last plan.

http://jacksonville.com/news/metro/2014-10-22/story/no-tax-fund-pension-mayor-alvin-brown-insists-meeting-wednesday-night

[Chris Hand]

^Honestly, I think the main thing wrong with the plan for a lot of people is that Curry's the one proposing it.

personally I'm just looking for bold leadership....we didn't get that with Mayor Brown...and some (including you I think) suggested that Mayor Curry would be strong....this just seems like a cop out

I said that Curry would be a more capable mayor than Brown, and he has been. I said he would do well in the areas that are his strengths - the budget and hiring staff - and he has. I don't remember specifically talking about the pension, but I figured Curry would come up with a plan for it much more effectively than Brown, who allowed the crisis to continue ballooning through his term, and he has.

There are downsides to the plan, but there are upsides as well that get short shrift here. Part of that, I'm afraid, is the aversion that has developed to anything related to Curry. I really believe that if this plan had been proposed by someone else, it would get a much different reception in these parts.

actually brown came up with a plan that actually paid the pension debt.  This one partially pays it at an absurd final price. So in terms of accounting, this is much much worse than brown.

^ Yes.

Stephen, what was Mayor Brown's plan?

Brown failed to deal with the problem for 4 years, despite the fact that Mayor Peyton had left him a decent plan when he left office. He rejected the Peyton plan, but wasn't able to come up with any workable alternative, which allowed the crisis to keep spiraling. One of his plans involved getting a big lump payment from JEA to pay down the pension obligation, in exchange for greatly reducing JEA's annual contribution to the city. Of course JEA was all about it, but fortunately the Council rejected it. Another involved borrowing a big lump payment to pay down the debt. Good on paper, but there was no funding mechanism, and he threatened to veto any attempt to raise taxes to actually pay for his own plan, which killed it.

Brown created a plan with the input of some of the actual conservative leaders of this community, only to have a combatative Bill Gulliford go full obstructionist after it had been hammered out.

But it fully paid the obligations starting this year, and didn't borrow money with interest rates and sixteen years before an actual payment to do so.

That's not the case. The 2014 plan died because there was no dedicated funding for the increased payments, and he refused to consider tax revenue to fund the plan he created. His exact quote was "I don't support a sales tax... I don't support a property tax. I don't support any tax [increase], period", and he threatened to veto the Council if they tried it. And he never managed to create another revenue source. And this was over 3 years after he rejected Peyton's last plan.

http://jacksonville.com/news/metro/2014-10-22/story/no-tax-fund-pension-mayor-alvin-brown-insists-meeting-wednesday-night

Former Ambassador and U.S. Senator Daniel Patrick Moynihan is credited with the following wisdom: "You are entitled to your own opinion, but you are not entitled to your own facts."

I thought of that quote when I read some of the above posts. And I was also reminded of one of President John Adams' famous lines: "Facts are stubborn things".

For reasons I am sure most can understand, I have generally avoided weighing in on pension issues publicly since leaving City Hall just over a year ago. I was taking the opportunity to do other things, like writing a book with former Florida Governor and U.S. Senator Bob Graham that will be published this month. And I personally believe that a new administration deserves some time to establish itself without previous administrations broadcasting their views.  I'm only commenting now to correct some misstatements about the past.

With all due respect to some of the commenters -- and I do respect their views even when we disagree -- their version of history does not square with the facts. The idea that Mayor Brown and our administration failed to deal with pension reform and accomplished nothing is simply not accurate.

Let's be clear: Mayor Brown signed a comprehensive pension reform agreement with the Jacksonville Police and Fire Pension Fund (PFPF) on June 19, 2015. You can read all about it here: http://www.coj.net/welcome/news/mayor,-pension-board-accomplish-historic-reform.aspx and http://jacksonville.com/news/crime/2015-06-19/story/major-jacksonville-pension-reform-bill-gets-green-light.

This agreement was the culmination of three years of very hard work on the pension issue by our administration, Council members, community leaders like the Retirement Reform Task Force led by Bill Scheu, the Jacksonville Civic Council, and others. The pact modified benefits for public employees to make them financially sustainable, enhanced accountability and transparency at the PFPF through stringent governance reforms, and established a structure for both the City of Jacksonville and the PFPF to jointly contribute additional pension payments each year through FY2028 to bring the unfunded liability under control. In short, that agreement accomplished everything but the enactment of a City of Jacksonville funding source to make its additional payments (the PFPF payment source was already identified).

But that does not mean that Mayor Brown did not identify funding sources. He sought to partner with JEA, which happens to be a City-owned asset with $2 billion in annual revenues. His first plan asked JEA to contribute an additional $40 million per year to the City for 10 years, in exchange for JEA receiving some significant cost-saving measures such as control over their own pension plan.  While some criticized that proposal at the time, it was later vindicated by a study released by highly regarded public finance consulting firm MAEVA: http://jacksonville.com/news/2015-10-05/story/new-study-says-jea-could-improve-its-bottom-line-and-save-millions-each-year.

Another plan was designed by two Republicans -- one of the best financial minds in Jacksonville (former CEO and long-time community leader Charlie Appleby) and one of the most experienced public servants in Jacksonville's recent history (former Council President Matt Carlucci, who served as both a district and at-large Council member). It involved JEA partnering with the COJ to make an significant up-front payment aimed at reducing the unfunded liability immediately. In exchange, the City would work with the JEA on the above-mentioned JEA pension issues and to address some of the utility's concerns about its annual contribution levels. JEA certified that the partnership would have no impact on utility rates.

I give a lot of credit to the Metro Jacksonville readership for all of the commentary on pension reform. The robust back-and-forth on what can sometimes be an arcane subject shows just how much people understand the financial importance of the issue. Thanks for that inspiring citizen engagement, and for the opportunity to set the record straight.

[Tacachale]

^Honestly, I think the main thing wrong with the plan for a lot of people is that Curry's the one proposing it.

personally I'm just looking for bold leadership....we didn't get that with Mayor Brown...and some (including you I think) suggested that Mayor Curry would be strong....this just seems like a cop out

I said that Curry would be a more capable mayor than Brown, and he has been. I said he would do well in the areas that are his strengths - the budget and hiring staff - and he has. I don't remember specifically talking about the pension, but I figured Curry would come up with a plan for it much more effectively than Brown, who allowed the crisis to continue ballooning through his term, and he has.

There are downsides to the plan, but there are upsides as well that get short shrift here. Part of that, I'm afraid, is the aversion that has developed to anything related to Curry. I really believe that if this plan had been proposed by someone else, it would get a much different reception in these parts.

actually brown came up with a plan that actually paid the pension debt.  This one partially pays it at an absurd final price. So in terms of accounting, this is much much worse than brown.

^ Yes.

Stephen, what was Mayor Brown's plan?

Brown failed to deal with the problem for 4 years, despite the fact that Mayor Peyton had left him a decent plan when he left office. He rejected the Peyton plan, but wasn't able to come up with any workable alternative, which allowed the crisis to keep spiraling. One of his plans involved getting a big lump payment from JEA to pay down the pension obligation, in exchange for greatly reducing JEA's annual contribution to the city. Of course JEA was all about it, but fortunately the Council rejected it. Another involved borrowing a big lump payment to pay down the debt. Good on paper, but there was no funding mechanism, and he threatened to veto any attempt to raise taxes to actually pay for his own plan, which killed it.

Brown created a plan with the input of some of the actual conservative leaders of this community, only to have a combatative Bill Gulliford go full obstructionist after it had been hammered out.

But it fully paid the obligations starting this year, and didn't borrow money with interest rates and sixteen years before an actual payment to do so.

That's not the case. The 2014 plan died because there was no dedicated funding for the increased payments, and he refused to consider tax revenue to fund the plan he created. His exact quote was "I don't support a sales tax... I don't support a property tax. I don't support any tax [increase], period", and he threatened to veto the Council if they tried it. And he never managed to create another revenue source. And this was over 3 years after he rejected Peyton's last plan.

http://jacksonville.com/news/metro/2014-10-22/story/no-tax-fund-pension-mayor-alvin-brown-insists-meeting-wednesday-night

Former Ambassador and U.S. Senator Daniel Patrick Moynihan is credited with the following wisdom: "You are entitled to your own opinion, but you are not entitled to your own facts."

I thought of that quote when I read some of the above posts. And I was also reminded of one of President John Adams' famous lines: "Facts are stubborn things".

For reasons I am sure most can understand, I have generally avoided weighing in on pension issues publicly since leaving City Hall just over a year ago. I was taking some time doing other things, like writing a book with former Florida Governor and U.S. Senator Bob Graham that will be published this month. And I personally believe that a new administration deserves some time to establish itself without previous administrations voicing their views.  I'm only commenting now to correct some misstatements about the past.

With all due respect to some of the commenters -- and I do respect their views even when we disagree -- their version of history does not square with the facts. The idea that Mayor Brown and our administration failed to deal with pension reform and accomplished nothing is simply not accurate.

Let's be clear: Mayor Brown signed a comprehensive pension reform agreement with the Jacksonville Police and Fire Pension Fund (PFPF) on June 19, 2015. You can read all about it here: http://www.coj.net/welcome/news/mayor,-pension-board-accomplish-historic-reform.aspx and http://jacksonville.com/news/crime/2015-06-19/story/major-jacksonville-pension-reform-bill-gets-green-light.

This agreement was the culmination of three years of very hard work on the pension issue by our administration, Council members, community leaders like the Retirement Reform Task Force led by Bill Scheu, the Jacksonville Civic Council, and others. The pact modified benefits for public employees to make them financially sustainable, enhanced accountability and transparency at the PFPF through stringent governance reforms, and established a structure for both the City of Jacksonville and the PFPF to jointly contribute additional pension payments each year through FY2028 to bring the unfunded liability under control. In short, that agreement accomplished everything but the enactment of a City of Jacksonville funding source to make its additional payments (the PFPF payment source was already identified).

But that does not mean that Mayor Brown did not identify funding sources. He sought to partner with JEA, which happens to be a City-owned asset with $2 billion in annual revenues. His first plan asked JEA to contribute an additional $40 million per year to the City for 10 years, in exchange for JEA receiving some significant cost-saving measures such as control over their own pension plan.  While some criticized that proposal at the time, it was later vindicated by a study released by highly regarded public finance consulting firm MAEVA: http://jacksonville.com/news/2015-10-05/story/new-study-says-jea-could-improve-its-bottom-line-and-save-millions-each-year.

Another plan was designed by two Republicans -- one of the best financial minds in Jacksonville (former CEO and long-time community leader Charlie Appleby) and one of the most experienced public servants in Jacksonville's recent history (former Council President Matt Carlucci, who served as both a district and at-large Council member). It involved JEA partnering with the COJ to make an significant up-front payment aimed at reducing the unfunded liability immediately. In exchange, the City would work with the JEA on the above-mentioned JEA pension issues and to address some of the utility's concerns about its annual contribution levels. JEA certified that the partnership would have no impact on utility rates.

I give a lot of credit to the Metro Jacksonville readership for all of the commentary on pension reform. The robust back-and-forth on what can sometimes be an arcane subject shows just how much people understand the financial importance of the issue. Thanks for that inspiring citizen engagement, and for the opportunity to set the record straight.

Chris, thanks for weighing in. I certainly appreciate your perspective. I'll say up front Mayor Brown deserves credit for the pension agreement signed in 2015, which did result in some savings. It was a nice positive to go out on. And there were certainly some other very solid elements in the wider pension plan that you and everyone worked hard on. The fact remains, however, that it took over 3 years to get there, and even by the end the biggest, most important problem - identifying the revenue - was never resolved. The JEA deals never panned out, and the mayor wouldn't consider raising taxes.

I'm sorry for my part in turning this thread into what the previous mayor did back then, instead of what the current mayor is doing now.
Speaking of, I'd be interested in your take on the current proposal.

[jaxlongtimer]

It seems to me all the last half dozen or so administrations and accompanying city councils, collectively, deserve "credit" for the mess we are in now.  And, that the difficulty in finding a "solution" to fixing it is an artificial, self inflicted problem.

In a nutshell, here is why:
   1. Buying votes of police, fire and city employees with promised benefits that were reckless in their design and ultimate cost and not fiscally fair to taxpayers paying for them.  I am convinced that such "political" promises were made with the full knowledge that the bills would come due long after those making the promises had moved on.  [I also note there remains a cloud as to if these plans were even legally and legitimately enacted.]

   2. Ridiculous assumptions about investment returns continuously yielding 8%/year, rain or shine.  And, regardless of such assumptions, guaranteeing them for decades.

   3. Failing to consider the obvious long term actuarial trend that people are living ever-longer, extending the cost of benefits even more.

   4. Locking in a pension plan for 30 years.  Who, in today's fast changing and volatile world, makes 30 year agreements on something like this.  It's why employers in the private sector have dropped pensions and no longer offer lifetime health insurance to retirees.  Government is certainly not immune to the same issues and should be reacting accordingly.

   5. Year after year, ignoring or incompetently not understanding the accumulating and fast growing funding balance shortfalls.  How could no one see the "elephant in the room"?

   6. Not only refusing to consider raising sales, property or other taxes regardless of how dire the City's budget problems are, but actually reducing them for many years.  I don't know any business or person who would voluntarily reduce their income for any reason (especially when the City is already recognized as the "low price leader" with its tax structure).  If there is "excess" income, it should be "saved" for the inevitable rainy day, not squandered by forfeiting it and then refusing, no matter what, to ask for it back when needed.  This is fiscal irresponsibility beyond the pale.

Foremost, I am concerned the current proposal is not ideal because it just adds more debt so we can continue to kick the can down the road again.

It appears the " circumstances" limiting our options are artificial in that the only reason they exist is because our elected leaders lack the will to say it like it is:  A tax increase is the timely and best way to fix this issue.  Painting themselves into corners with promises of "no tax increases" for any reason is just foolish and voters should be wary in the future of those who limit fiscal options under any circumstances by making such promises.

I note, too, that the City has a poor track record of sticking to promises regarding long term programs (e.g. the Renaissance and Better Jax Plans).  Once again, today's "promises" will be left to others to live up to (or not).

In summary, the current plan, in many ways, is mimicking the behavior that got us here in the first place:  multi-decade promises, highly speculative assumptions (e.g. no guarantee the Union's will make the necessary concessions being promised) and a steadfast refusal to properly adjust current tax rates.

Until I see a convincing point-by-point rebuttal to the above, I am questioning my ability to support the solution on the ballot.  If the ballot initiative was accompanied by an immediate property and/or sales tax increase (based on 800,000 citizens, I figure about $50 per capita per year is needed) to allow for not financing the current shortfalls and the ballot sales tax was thus a complimentary replacement and dedicated funding source for the future once it kicked in AND we had agreements in hand with the Unions that made the desired adjustments to the pension plans, I could wholeheartedly agree with this plan.

[vicupstate]

^^ A very accurate, comprehensive and 'spot on' post. The best I have read on this topic.

[jaxlongtimer]

^^ A very accurate, comprehensive and 'spot on' post. The best I have read on this topic.

Thank you, Vicupstate.  It seems pretty obvious what the best way is to resolve this when one strips it down to the fundamentals.  Along those lines, coincidentally, the T-U/Jacksonville.com just published tonight this article paralleling my above post in most respects and offering specific quotes and facts to support what I wrote: http://jacksonville.com/news/metro/2016-08-06/story/experts-say-pension-tax-solution-will-work-critics-question-cost

Some salient points from the article:

Kicking the can down the road:

At the request of The Times-Union, outside pension experts reviewed a financial analysis of Curry's plan. They say it appears the numbers add up, but they also point to something Curry doesn't talk about in television ads urging support for the sales tax: His plan will cost substantially more in the long run.

By taking years longer to pay off the pension debt, Curry's plan would add about $1.5 billion more in pension payments through 2049 — taxpayer dollars that would flow to pension expenses rather than other city needs.

"It's not some kind of free lunch," said Jean-Pierre Aubry, associate director for research at the Center for Retirement Research at Boston College. "It's coming from taxpayers down the road."

It's the same kind of trade-off that happens when someone extends the payment period for a home mortgage or takes more time to pay off credit card debt, said David Draine, a Pew Charitable Trusts researcher who studies pension plans nationwide.

"If I pay less now, interest on the debt will mean I will pay more later," Draine said. "If I've got a reason to think I can afford those higher costs later, that may be a fiscally prudent thing to do."

The net impact of that approach is the city would shoulder an extra $1.5 billion in payments. That would negate the savings the city achieved last year with a pension-reform package that changes benefits for police and firefighters. Officials with former mayor Alvin Brown's office said at the time that city would save $1.5 billion over 30 years.

All those savings "would be erased with a mouse-click" by extending the paydown period, said Tom Majdanics, a Jacksonville resident who submitted his own proposals to the pension task force in 2014.

"Our generation should take care of our own business and not kick the can down the road to our kids," said Majdanics, who opposes the sales tax referendum.

Last year's pension-reform package was a pay more now, pay less later proposition. The city agreed to put an extra $350 million above and beyond the legally required amounts into the Police and Fire Pension Fund over a 13-year period.

Refusing to raise taxes no matter what, including that it is the most prudent option to consider:

"In an ideal world, you might have more (pension debt) paid off in the current generation and less in the future generation, but this isn't an ideal world," she said. "This is a political world and I think decisions were made with that in mind."

Curry opposes any increase in the city's current sales tax or property tax rate, saying many residents are struggling and cannot afford to pay more taxes. He said state lawmakers would never have approved a sales tax that begins before the Better Jacksonville Plan's tax expires.

"There is no other choice," he often says while urging support for the sales tax.

Critics say he hasn't fully fleshed out that choice.

Making speculative assumptions:

If voters support the tax, the city still must close at least one of its three pension plans to new hires, or else state law won't let the city collect any of the sales tax. The law also would require current employees to pay at least 10 percent of pay for their pensions, up from the 8 percent rate most pay now.

Those changes would require collective bargaining with unions in talks that would start after the referendum. Collective bargaining should have come first, said Winkler, who founded a Just Vote No political committee opposing the tax.

"We haven't been presented with a pension-reform package," Winkler said. "We've been presented a promise that if the tax passes, they're going to work on a package."

Curry says voters will hold his feet to the fire so retirement plans for new hires are sustainable.

The lack of specifics about changes to the city's retirement program makes it difficult to fully assess the financial impact.

Milliman, the actuarial firm hired by the city to do the financial analysis, shows in its July report that part of its number-crunching involves a "new plan" for new hires, but the type of option examined is a mystery. The report doesn't say and the mayor's office won't, either. In response to a Times-Union question, the mayor's office said in an emailed statement, "We have provided no indication of what the plan will look like."

Multi-decade promises:

Curry's plan has some risk factors.

Shifting pension costs to the period after the sales tax starts might put City Hall in the same position it is in now — facing tough budget choices because of inherited problems — if sales tax revenue isn't sufficient to cover the additional $2.2 billion in pension contributions that would be deferred beyond 2031.

City projections show if sales tax revenue grows at a 2 percent annual rate, the city would generate $2.54 billion in sales taxes from 2032 to 2049 when the pension plans would be fully funded.

"If it grows slower than expected, then making up for those increased later-year payments will take out more resources from the rest of the budget," Draine said.

[brainstormer]

^ I completely agree with jaxlongtimer. One of my biggest issues is that this isn't a comprehensive plan. It will not solve our pension problems. For decades, Jacksonville has been failed by it's leadership. Citizens have enjoyed low property taxes and maintained most city services because politicians have used ridiculous promises to get elected and improperly underpaid pension payments without fully explaining what they were doing. Curry wants to be able to say he solved the pension problem when in reality he will be long out of office when we end up in the same position of having to pay huge payments. It is too much of a risk. It's time property owners paid their fair share and were told the truth. We should be paying for things along the way. If Curry promised to add police officers, then we should be raising taxes to pay for them. He can't have both low taxes and increased services. It's time for our local politicians to step up and be honest leaders.

[benmarcus]

How many tax dollars have been spent lobbying Tally, bullying city employees, screaming "the SKY is FALLING!"?

100% agree. It'd be one thing if he was advocating for something which had been thoroughly publicly vetted with some measure of consensus of experts, PRIOR to securing it as the "only" option.

In addition to the tax dollars, imagine the amount of donated dollars he's wasted having nonprofits listen to his apocalypse pitch for a payday loan.

Are all sales tax referedums "pay day loan"?

Was the Better Jacksonville Plan with all the facilities built just a "pay day loan?" If we were to push a half cent sales tax to build new school, is that a "pay day loan"?

No they are not. They were taxes collected IMMEDIATELY to pay for expenses being incurred IMMEDIATELY. They weren't postponing paying for expenses already incurred,  and then paying for the 'payment holiday'  14 years later, which is essentially what is being voted on now.   

No. You take out debt in bonds from lenders to build something and the tax pays the bonds off for the next 30 years. There are some differences, but the main one is you already have the liability with the pension fund and it is over a longer period. Most likely, the city will bond in this case as well or use the future dedicated assets to its advantage with lenders for better rates.

Excellent point, if a sales tax in the future is a "pay day loan", then one now is even more so, as most times the city takes out bonds to build things up front. Hence why it doesn't take fully 30 years to actually build things funded that way.

Basically, sales taxes provide dedicated funding sources. You see short term gains for long term payments normally. I still don't see the negatives on this plan except that a portion of the max 8% sales tax is taken up. We still have 1% to play with if we wanted in the future for infrastructure or schools.

In the end, it's all semantics. The banks will see that Jacksonville has a dedicated funding source to pay this off and Jacksonville will begin to move forward. Hopefully with a good deal from lenders, it is a wash on the cost with inflation and interest.

You are completely ignoring the facet that makes this a payday loan situation. The promise of future revenues that will not come for many years, is used to reduce the existing pension payments, so that money (from the reduction of payments) can be spent on something else. 

The BJP bonds are essentially a mortgage on the projects that it built. The tax,  the construction of the projects and the bond payments all started immediately after passage.   

Exactly. A payday loan is one that carries significant long term financial consequences for short term relief, often times with nothing to show for it when you're actually paying back the loan. The investments made in infrastructure and public services would obviously not be considered a payday loan since, #1 assets actively being developed with the money provide a return on investment, typically higher than what was spent and #2, as is pointed out, it's not counting on future potential revenue to cover the cost of the loan. Pretty straightforward.

And I don't give a crap who proposed it. Hell, I expected Curry, as someone who labels himself an accountant, fiscal conservative and family man, to spend his political clout on actually fixing the budget and not just adding another tax. That's the kind of behavior he'd be criticizing if a Democrat was in office - I can guarantee it.

[jaxlongtimer]

Others following up on points I made above.

Two former City Council presidents call Mayor Curry's pension plan "taxation without representation"
Stephen Joost and Bill Bishop call Curry's plan "short-term gain for long-term pain"

By Nate Monroe Wed, Aug 10, 2016 @ 12:18 pm | updated Wed, Aug 10, 2016 @ 12:28 pm

Two former Jacksonville City Council presidents say Mayor Lenny Curry's plan to use a sales tax to pay down the city's $2.85 billion pension debt amounts to "taxation without representation" for future generations and a mistaken way to resolve the high-profile problem, a rare rebuke of a plan that has otherwise enjoyed virtually unanimous support from Jacksonville's political establishment.

http://jacksonville.com/news/2016-08-10/story/two-former-city-council-presidents-call-mayor-currys-pension-plan-taxation#

[jaxlongtimer]

Excellent fact-filled column in today's T-U:

Guest Column: Total Reform First plan is the best way to attack the city's pension debt

By Tom Majdanics Tue, Aug 9, 2016 @ 3:54 pm | updated Tue, Aug 9, 2016 @ 6:24 pm

Note to readers: The Times-Union invited The Mayor's Office to respond to this opinion column. The column by Gary Chartrand and John Baker is adjacent.

Over the past 15 years, Jacksonville's city government has mutated from a provider of civic goods and services to a supplier of unsustainable pension benefits.

Citizens are paying for years of back-room deals, conflicts of interest, secret executive retirement packages, absentee oversight and, as reported by the Times-Union, a few employees with $5 million in lifetime pensions.

Nearly $1 billion of taxpayer money has been diverted to pensions in the past five years, causing city services to be slashed. Pensions alone now consume one-quarter of our city budget.

Even with this $1 billion infusion, our pension debt grew by over $700 million. We are now faced with a pension debt of $2.85 billion.

Jacksonville's pension system has been a catastrophe. It demands total reform.

I voted for Mayor Lenny Curry, financially supported his campaign and respect his efforts to find a solution to this inherited problem.

But the mayor has proposed a plan whose cornerstone is a new, $4 billion pension bailout tax — the largest tax in Jacksonville history.

His plan protects the status quo of unsustainable pension benefits.

His plan refinances pension debts against the advice of his own financial advisers at a cost of $1.5 billion to taxpayers.

His plan kicks the can to Jacksonville's children to pay for our pension debts during the prime of their working years.

It is all tax, no reform.

Voters must reject it in August's referendum. There is a better way forward.

Using the mayor's own figures, we can build a plan that comprehensively reforms our broken pension system, reduces taxpayer risk and responsibly pays our debts.

It would cost taxpayers billions less than the mayor's new bailout tax and spare our city's children from paying for our past mistakes.

TOTAL REFORM FIRST

First, our city needs complete, across-the-board reform of all city pension plans.

We can annually save at least $35 million by cutting excess Wall Street investment fees currently paid by our pension system and by renegotiating future benefits for both new and current city employees across city government.

The mayor acknowledges that current city pension benefits are dysfunctional, do not represent the market and are financially unsustainable. He's right.

An average American collects full Social Security benefits at age 66. After a lifetime of work, he or she will receive about $400,000 in benefits during their remaining years.

That's what the average Jacksonville citizen can expect. In contrast, the top 1 percent of earners will receive around $800,000 in Social Security benefits.

But in Jacksonville, the average city corrections employees are retiring in their late 40s and collect about $2.5 million in lifetime city retirement benefits. This is funded primarily by taxpayers.

The average police and fire employees also begin to collect pensions in their late 40s and will receive about $4 million in lifetime benefits.

Jacksonville's general city employees can retire at age 55. They receive lifetime retirement benefits that are twice as rich as those offered in Clay or St. Johns counties for identical duties.

In all cases, city employees are eligible to receive full retirement benefits after 20 years of work.

Our city pensions are solid gold.

And they are eating our budget alive.

Next year, the city will pay $340 million in citywide pension benefits to retirees. In 10 years, payouts will grow to nearly $500 million. In 20 years, it grows to $670 million. We need to bend this curve.

But the mayor's plan has not identified one penny of specific benefit changes to our broken pension system. Zero.

Most critically, his plan allows current employees to keep their gold-plated pensions He lets taxpayers pick up that tab, which runs into the billions.

Further, his plan allows for just one of our three broken pension plans to be closed to new employees. Which plans will be closed? What will they be replaced with? Will there be any savings?

He has shared zero details.

We have to pass the mayor's new tax plan first, so we can find out what is in it.

He has it backward.

NEW BENEFITS CAN BE CHANGED

Jacksonville pensions need total reform first. We can legally negotiate future retirement benefits for all city employees that are fair and sustainable, attract and retain quality talent and provide retirees with full peace of mind.

We depend on city employees to keep us safe and to deliver services effectively and efficiently. But we do not need $4 million pension packages or to provide twice the benefits of neighboring counties to achieve this. It can cost far less.

After first implementing total reform that saves at least $35 million annually, a property tax increase of just under 1 mill would be needed to pay off our existing pension debt over time. The owner of a $150,000 home with a homestead exemption would see taxes increase by $100 annually.

I truly wish no further taxes were needed, but the past 15 years of gross pension mismanagement left a gaping hole for citizens to fill.

PAY LESS EARLIER

Our dysfunctional pension system is the laughingstock of Florida.

Ultimately, voters have a choice in August's referendum. We can choose to pay our debts now, coupled with total reform of our broken pension system. Or, to quote the mayor's pension advisers, we can pay more later.

The mayor's plan pays a lot more later.

Along with the new pension bailout tax, the mayor's plan stretches debt payments to 2049. In their most recent report to the city, the mayor's pension advisers warn against this three separate times. The plan increases our city's financial risk and will cost taxpayers a grand total of $11.3 billion to fully fund our pension system.

Under the Total Reform First plan, our debts are fully paid several years earlier. It costs $8.6 billion over the same time period, saving taxpayers $2.7 billion vs. the mayor's plan.

Our children will not be saddled with pension debts they did not create. According to the mayor's figures, children entering kindergarten will still be paying this new tax when they are 39 years old. We can leave our kids a much better legacy.

The mayor's plan is all tax, no reform and shortchanges our kids.

On Aug. 30, citizens will be asked to approve or reject the mayor's new pension bailout tax. If you are satisfied with the current pension system, then vote yes.

I urge voters to reject this new tax.

Do not create a new, $4 billion pension bailout tax, the largest tax in city history.

Do not to kick the can to our city's children to foot the bill.

Solve this problem now, starting first with across-the-board pension reform.

The Total Reform First plan demands a comprehensive overhaul of our broken pension system and saves taxpayers billions vs. the mayor's new bailout tax.

Jacksonville needs Total Reform First.

Tom Majdanics is a Jacksonville resident.

Contact: nojaxtax@gmail.com.

Additional information is available at NoJaxTax.com

http://jacksonville.com/business/columnists/2016-08-09/story/guest-column-total-reform-first-plan-best-way-attack-citys

[jaxlongtimer]

Except that this guy clearly is just an anti tax lunatic.

I didn't read the column this way.  I see that he is pushing for the reforms up front, not after approving the proposed tax plan.  If made up front, to whatever degree, the burden could be quite a bit less, and knowing that, it could be better factored into addressing a current tax increase.  Curry and the Union's already seem to be promising "reforms", we just don't know what they are at this point or if they will ever actually be realized following a "yes" vote on the sales tax. 

Second, per quote below, he is actually saying "tax me now," not later, when costs will have grown much more to finance kicking the can down the road.  That's not the sign of an "anti-tax lunatic," just the opposite.  Actually, it's the other way around, it's "anti-tax lunatics" that are supporting the ballot initiative as they refuse to acknowledge a "tax increase" of any kind.  FYI, the T-U had a great graphic this week accompanying one of their pension articles showing how "easy" the City could raise funds currently by tweaking one or a combination of the property tax, gas tax and/or JEA franchise fee.

After first implementing total reform that saves at least $35 million annually, a property tax increase of just under 1 mill would be needed to pay off our existing pension debt over time. The owner of a $150,000 home with a homestead exemption would see taxes increase by $100 annually.

I truly wish no further taxes were needed, but the past 15 years of gross pension mismanagement left a gaping hole for citizens to fill.