Pension fix only issue on Mayor Lenny Curry's agenda

[Tacachale]

You dont raise the millage rate 30% in one shot. You phase it in.

I get the "future politicos could redirect the money", buts that is an issue every year. Pass a law to make the increase stick to pension only and cant be redirected.

By going the 30 years later, state legislature route, you are essentially saying no one in COJ today or in the future can be trusted to keep a commitment.

And that my friends is the same reason why the mobility plan was weakened, downtown has issues and JTA can't make a solid transit plan.

The problem is the leaders we elect. No commitment.

I disagree with this on a few points. I don't see the point of phasing in a 3 mill increase. If you do it, say, a mill a year, what's the point of phasing it at all? And if you phase it out more than that it increases the risk that adequate money is dedicated, especially as a bunch of the council and possibly the Mayor will change in 4 years. The goal with either a millage or sales tax increase that goes into effect now was to front-load the payment to ease the burden every year. That's impossible if it's only being increased incrementally over a long span of time. That said, I imagine Curry will have more to say on the millage rate in the event the sales tax plan doesn't pass. We can't go on like we're going.

I think it's just realism that we can't trust future governments with dealing with this issue. It's a complex problem that compounds over time. It's not going to be solved entirely in one term, and most of our leaders don't have much incentive to think beyond their term.

[FlaBoy]

I think it makes sense for the most part. It is all about solvency and by having this money definitely coming in the future, you get the benefit of solvency today while also getting to hopefully see the benefits of inflationary policy as the debt won't cost as much in 30 years as it does now. It is also a lot easier to pass something that will simply continue a tax that is already in place.

My only questions about the plan is what are we doing with the debt in the meantime? Are we re-bonding the current debt? How does that work?

[MusicMan]

Curry says, "The annual payment is up to $260,000,000."  Seriously?  How many people are retiring on this fund?

[tufsu1]

Curry says, "The annual payment is up to $260,000,000."  Seriously?  How many people are retiring on this fund?

you do understand that payments are made to pretty much any retired city employee still alive, right?

[strider]

Curry says, "The annual payment is up to $260,000,000."  Seriously?  How many people are retiring on this fund?

you do understand that payments are made to pretty much any retired city employee still alive, right?

I would assume that the pension fund itself pays the retirees not the city directly so the fund, like all retirement funds, gets invested and hopefully gains in value so it can meet it's obligations.  Isn't the issue with the our pensions the fact that we are behind on our contribution payments so that the total payment due really has nothing to do with what the retirees actually get but rather the combined yearly required contributions and the past due amounts?

[Elwood]

Exactly.

[TheCat]

An admittedly vague plan is approved for council vote. Read Gulliford's quotes below and remind me again why he is on our city council.

Council approves Curry's Pension Tax for referendum
City Council Finance Committee approves bill for August sales tax referendum
Full City Council will vote next week
By Christopher Hong Mon, May 2, 2016 @ 5:17 am | updated Mon, May 2, 2016 @ 3:05 pm

Bob.Mack@jacksonville.com
Bob.Mack@jacksonville.com - 3/29/16 - Mayor Lenny Curry makes the announcement that the U.S. Men's National Team will play a World Cup qualifier soccer match in September in EverBank Field in Jacksonville, FL. (The Florida Times-Union, Bob Mack)

The City Council's Finance Committee unanimously voted Monday to put a half-cent sales tax on the Aug. 30 ballot to help the city pay down its massive pension debt.

The measure goes next week to the full City Council for a vote.

Nearly every City Council member is supporting the plan, by far the highest priority for Curry in his first term in the mayor's office.
"I think there will be some general discussion and maybe some specific questions, but when you think about it, it's pretty straightforward," said Councilman Bill Gulliford, chairman of the Finance Committee.

The vote on Aug. 30 will be held in conjunction with the primary elections for local and statewide races.

Curry says the sales tax is the best way to pay off the debt for the city's three pension plans, which totals $2.87 billion, and would free up money to spend on other priorities by reducing the city's yearly pension obligation payments.

His plan would ask voters to create a half-cent sales tax that would go into effect in 2030, when the voter-approved Better Jacksonville Sales tax ends. The city would then use the guarantee of that future sales tax revenue as a way to free up tens of millions of dollars now going to pay down the city's pension debt.

Beyond the broad strokes, Curry's office has released few other specific details about the plan.

Gulliford said he doesn't expect to have those details before the council approves the plan and instead will wait to "get to the meat of the issue" until after the referendum passes.

"I don't mind the generality because I don't see other options out there," Gulliford said. "If we can't do something like this, the other options are very onerous. The idea of raising millage rates makes me scared."

The special tax for the pension debt is the first of its kind in Florida and required Curry and other city officials to get approval from the Legislature and Gov. Rick Scott earlier this year.

In order to use the tax for pension debt, the new state law requires the city to increase the amount that employees pay to at least 10 percent of their paychecks. The city already has an agreement in place to phase in that increase to 10 percent for all police and firefighters, but the amount now is 8 percent for general employees and corrections officers.

The city will close at least one of its three current pension plans to any new hires if voters approve the half-cent sales tax. Curry said that will shut the door on pension problems biting future city leaders. For new hires, options are moving them into 401(k)-style plans, trying to get them into the Florida Retirement System, or creating brand-new pension plans.

Public-safety unions, which hold the lion's share of the city's pension debt, support Curry's plan.

Christopher Hong: (904) 359-4272

[spuwho]

"raising a millage rate scares me"

More than passing a sales tax with an undefined detail?

We deserve the government we elect.

[jaxjags]

Sales tax is much more "punitive" to those with lower income than a millage rate increase. Again, Jax is a very low taxed city, so raising real estate taxes to me is not a big problem.

[TheCat]

Gulliford, his comments are unreal. I feel like I'm reading Animal Farm when I read his quotes.

He sounds just like the fictional pigs that have to justify their crazy Animal Farm taxes, laws and policies to the group of not so brilliant other animals.

[vicupstate]

Sales tax is much more "punitive" to those with lower income than a millage rate increase. Again, Jax is a very low taxed city, so raising real estate taxes to me is not a big problem.

Yes, but those with lower incomes don't vote as much and don't fund campaigns.

Isn't this like a homeowner who's mortgage completes in 2030, agreeing to continue paying the same amount after 2030, in exchange for reducing their current mortgage payment?  Is that the basic concept?

If so, how is that being fiscally responsible?  I don't think Dave Ramsey would approve.

[spuwho]

As President Obama would say....

"Its irresponsible, its unpatriotic"

[TheCat]

Lenny Curry thinks you're too stupid to understand his pension plan. So, just trust him. You have to commend the mayor's office and Gulliford for turning vagueness and a lack of clarity into a political asset.

"Curry's office said it either doesn't have all the answers to many of these questions or that specifics are unhelpful at this point because they would confuse voters."

So, how are the smart people on this board are supporting a plan they know nothing about...?

"We can speculate on a number of things," said Marsha Oliver, the mayor's spokeswoman. "What we don't have to speculate on is we will have a dedicated funding stream for debt."

Using often grim and urgent words, Mayor Lenny Curry has made a forceful pitch for voters to approve a first-of-its kind sales tax in August so Jacksonville can once and for all solve its cancerous problems with expensive employee pensions.
But as Curry sells his top first-term priority, there remain major — and basic — unanswered questions about how he would use taxpayer money to address city pension problems, leaving it unclear just how resolved those woes would be under his plan. So far, Curry's administration has not indicated whether it will provide many answers before voters go to the polls Aug. 30.

That reticence also means there has so far been scant public discussion about the risks inherent in some options Curry might consider if voters approve the sales tax, even as City Council members and prominent Jacksonville business leaders have eagerly lined up to champion the mayor's idea.

The message from city officials: Trust us.

Voters are so far much less certain on the issue than the city's elected officials and civic leaders.

A University of North Florida poll of 380 Duval County residents showed 40 percent — a plurality — either didn't know or did not respond when asked whether they supported or opposed the tax referendum. The survey, which was conducted Monday through Thursday and has a 5 percent margin of error, found 36 percent in favor of the referendum and 24 percent in opposition.

"Curry has some work to do in order to convince voters that the sales tax extension is the right thing to do to try and solve our pension problems," said Michael Binder, a UNF political science professor who runs the school's Public Opinion Research Laboratory.

The proposed pension sales tax would not start until after the Better Jacksonville Plan's half-cent sales tax expires in 2030, meaning there would be no net change in what residents pay now. This has been touted as the best of bad options, a relatively painless way to alleviate the city's ballooning annual pension payments and free up tens of millions of dollars each year in future budgets.

Rising pension costs, estimated to reach $280 million next year, suck up more than 20 percent of the city's budget, which squeezes the city's ability to provide money for basic services like street paving, drainage, public safety and parks and libraries.

State law would require the city to close at least one of its pension plans if it uses the sales tax — a reform component of the plan that Curry says will ensure this expensive problem won't recur.

http://jacksonville.com/news/metro/2016-05-07/story/unanswered-questions-swirl-around-mayor-lenny-currys-pension-bailout

[Non-RedNeck Westsider]

My post yesterday from FB on the Folio page:

I'm against the tax on the basis that we're still not solving the problem and I see my kids in the same predicament now and going through the same song-and-dance.

I need to see more talk regarding the actual CHANGES that are to be made to the pension plan before diverting any more money to feed the beast. I get that for the next decade, this is just an accounting adjustment to cover future costs, but without a real plan in place (read: in writing, vetted and approved by city council prior to any referendum going to the public for vote) for changing the structure of the pension then this issues is still dead in the water to me.

Focus on the long-term fix, which has to be collectively bargained with the union, get it approved and then let's agree to pay for it with the BJP tax-extension.

[brainstormer]

I'm against it. His plan doesn't address any of the funding issues we currently have and will have for the next 14 years before this tax would kick in. While I like the idea of having a long term fix, I feel this is all about scoring political points. He isn't willing to use political capital saying we should raise city taxes now and therefore is holding any other decisions hostage over this one issue. We should make the hard decision to raise taxes now, renegotiate future pension plans, and also explore long term funding decisions. To truly fix the issue, there must be shared sacrifices and a combination of solutions. Curry is only concerned about his political resume. I'm voting NO.