Gulliford wants voters to decide on half-cent sales-tax to pay down pension

[Cheshire Cat]

[spuwho]

Someone signed a pretty bad contract. No wonder they think Keane is a hero.

Like the Borg, the pension is assimilating the city budget.

[Non-RedNeck Westsider]

If I'm not mistaken, this hit a fever pitch around FY11/12/13 did it not?  There were task forces, meetings, commissions,etc.. to try and get to the root of the issue. 

Were ANY of the proposals then implemented?

I guess this is where I stand on the issue:  Now that we're entering yet another election cycle, the PFRPF (sic) is getting brought back to the front of discussions, but has there been any movement, positive or negative, at all or are we pretty much exactly where we were this time last election (resolution-wise, not $$$-wise) on the issue? 

[edjax]

Personally I would vote for a sales tax increase as I am sure the wording would indicate that it would be dedicated to e pension.  Simply increasing our property tax would most likely just end up using the increase for other things. 

[Cheshire Cat]

If I'm not mistaken, this hit a fever pitch around FY11/12/13 did it not?  There were task forces, meetings, commissions,etc.. to try and get to the root of the issue. 

Were ANY of the proposals then implemented?

I guess this is where I stand on the issue:  Now that we're entering yet another election cycle, the PFRPF (sic) is getting brought back to the front of discussions, but has there been any movement, positive or negative, at all or are we pretty much exactly where we were this time last election (resolution-wise, not $$$-wise) on the issue? 

Short answer is there has been no real or meaningful progress on the pension issue in spite of some hopeful soundbites from the mayors office and we will likely see non before the election.
Actually, this issue hit a fevered pitch during Peyton's second term in office where he effectively put himself at odds with the JSO and JFRD who had helped put him in office.  He failed to resolve it and the hot issue was carried forward into the next election cycle.  Three and a half years later, under Brown the issue is still unresolved.

[coredumped]

Sounds like the real problem is the COST of the pension. Has there been any talks about eliminating it for new hires and offering a 401k? It's not like crime is down and we don't have red light cameras, why the sense of entitlement?
I am thankful for our police, but it seems like the market says this spending is unsustainable.

[edjax]

Sounds like the real problem is the COST of the pension. Has there been any talks about eliminating it for new hires and offering a 401k? It's not like crime is down and we don't have red light cameras, why the sense of entitlement?
I am thankful for our police, but it seems like the market says this spending is unsustainable.

Yes a 401k was discussed by the task force.  But ultimately decided that would not be viable.

[camarocane]

If you're going the sales tax route, you'll have to give the public tangible projects......if you want it to stand a chance of passing. Asking the public to approve paying a higher sales tax to handle the pension issue will end in sure defeat. I also believe it's an easy way off kicking the can down the road.

I would agree but would also say that solving the pension problem to many would be a tangible result.  The pension problem resulted in the leadership of the time taking a "pension" holiday when there was plenty of money to pay into the funds.  They just did not pay into the program as they should have.  That was not the basis for a property tax cut.  The money was there with or without the cut in taxes.  Those in office just failed to pay into the pensions and clearly were derelict in their duty to long standing pension agreements with the JSO and JFRD.  I think before any sales tax increase appears on a ballot somewhere, there has to be a clear understanding in the public what those funds will be used for.  I still say the first step in all of this is a court ruling on whether or not the pension deals were legal, which I suspect they are.  However that "Boogie man" will continue to be a spoiler in the process when it comes to solving this issue.  It needs to come down to a clear statement of  "this is the amount of dollars we owe to a proven legal agreement and it will cost this much to fix it".  The people deserve a voice in how that fix happens.  A sales tax increase should be one option available.  There is not a single solution at this point that will be painless. As it stands we have elected officials who have sat through all the discussions on pension and there is no collective agreement about the solution.  This has nothing to do with bold leadership.  It has to do with this being a convoluted issue being faced by many cities across the nation.  In our city leadership has simply kicked the can down the road and everyone in the public can understand that basic truth.

+1, has anyone asked the question of how we arrived at this point? From what I've been told (by a few folks on the pension board), the COJ diverted pension funds into other projects without reimbursing the fund back in the 90s.

I would agree that bifurcating the system into a 401k and pension is the way to go. Folks that are not vested, or new hires would automatically be placed on a 401k. The problem then would be how to fund the pension for the folks who are vested or already hired for the next, say 50-70 years. those folks and their spouses would have to die off for this problem to be solved. Once they enter retirement, who then funds their pension? Taxpayers? maybe? For this problem to be solved, someone is going to get shafted.

Regardless, removing the pension altogether maybe illegal unless the COJ files bankruptcy.

[southsider1015]

Sounds like the real problem is the COST of the pension. Has there been any talks about eliminating it for new hires and offering a 401k? It's not like crime is down and we don't have red light cameras, why the sense of entitlement?
I am thankful for our police, but it seems like the market says this spending is unsustainable.

This.  My thoughts exactly.  It's a two part problem.  This 1/2 cent tax increase only addresses paying for it, and not fixing it.

Can someone explain to me like I'm 5 about why pensions are still needed in this day and age?  Why can't public employees have a 401k, with vested match, like everyone else?  Heck, since most new employees would be young, get them going on a Roth 401k. 

I'm probably voting no unless there's a clear plan to fix the pension, not continuing to kick a growing can down the road.

[CityLife]

^Great question. I've held two public sector jobs and each one is on a 401k plan. Seems to be becoming the norm these days even in the public sector. The concept of a pension is foreign to most younger people, so its not like it would be a huge shock.

I would love to hear why they elected not to go to 401k.

[Charles Hunter]

Just catching up on this, so some thoughts from all over the place (or thread)
1. Wouldn't a sales tax increase have to go to referendum, anyway?  If so, the charges of Council shirking their duty are off base.
I'll see if I can get my hands on a presentation Chris Hand gave to a group I was in.  All of this is based on my (probably hazy) recollection. 
2. It says the cost of a 401k would be more than the proposal, in part because the City may have to contribute to Social Security.  City retirees do not pay into, or receive, SS.  Not sure about my memory or the explanation.
3. Delays only increase the problem.
4. The presentation equates future payments if nothing is done to various city services.  I don't remember them, though.

I'm not sold on the JEA solution - I think it reduces (eliminates?) their current contribution to the General Fund, which puts more strain on already strained services.

[thelakelander]

What progress/initiatives/proposals do we have to fix the actual problem?  It seems we're tackling this issue by trying to figure out which bucket to use to collect the water from a leak in the roof rather than ripping up shingles to figure out why it's leaking in the first place.

Everything else discussed at this point doesn't fix the leak. Ultimately, we'll need to change our sprawling growth pattern. It would be interesting to compare the number of employees and pension costs in Jax verses a more compact city of similar size.

[Chris Hand]

Charles, I would be happy to send you a copy of the presentation. Would you mind emailing me at chand@coj.net so I can forward it? Thanks very much.

[Chris Hand]

^Great question. I've held two public sector jobs and each one is on a 401k plan. Seems to be becoming the norm these days even in the public sector. The concept of a pension is foreign to most younger people, so its not like it would be a huge shock.

I would love to hear why they elected not to go to 401k.

CityLife, that's a question we often receive. The bottom line is that the COJ simply cannot afford financially or operationally to move from our current defined benefit (DB) plan to a defined contribution (DC) plan. From a financial perspective, we would still have to pay down the $1.62 billion unfunded liability at the Police and Fire Pension Fund, but the state would require us to pay it down more quickly and at a much higher annual amount if we closed the DB plan in favor of a DC plan. Additionally, switching to a DC plan might require the City to incur the expense of providing Social Security. Finally, from an operational perspective, switching from a DB to a DC plan could well put the COJ at a competitive disadvantage. None of our chief competitors -- the 66 other Florida counties who have their public safety employees in the Florida Retirement System, and other major cities in the state which have their own pension systems -- have moved their police and fire employees to a DC plan. Jacksonville could find it very difficult to recruit and retain first responders.

[Chris Hand]

Sounds like the real problem is the COST of the pension. Has there been any talks about eliminating it for new hires and offering a 401k? It's not like crime is down and we don't have red light cameras, why the sense of entitlement?
I am thankful for our police, but it seems like the market says this spending is unsustainable.

Coredumped, you might see my answer to CityLife on the 401(k), or DC option. We studied this option extensively and it just isn't viable either financially or operationally.