Pension Sales Tax: 11 Concerns Before Voting

[jaxlongtimer]

I commend Mayor Curry for the courage to put this issue front and center in his administration.  He is staking much of his limited political capital on the passage of the sales tax for pensions and, clearly, he is backing it up with energy, passion, and political gamesmanship.  And, given the below, I realize the Mayor and/or others in his camp may sincerely believe in their cause.

However, as others have noted, this doesn't mean that this is the best solution available.  Count me as one who remains skeptical.  As we come down to the wire, I have the following concerns that give me serious pause on this intiative:

1. Failure to consider all revenue raising options, which could save up to $1.5 billion, if implemented currently, just because the Mayor promised "no new taxes," no matter what.  That's an artificial restriction that disallows consideration of numerous other options that, at least on their surface, appear to deliver superior results.

2. Failure of the administration to effectively explain why these other "tax now" options aren't superior, aside from the Mayor's political promise to "not raise taxes" at any cost.

3. The perception that numerous proponents are behind this initiative (a) due to immense political pressure (the Mayor seems to have a way of extracting a price from those who fail to substantially board his train), (b) to also join the Mayor in saying "we solved this issue without a 'tax increase' as they pursue their own political ambitions, (c) as they may personally gain financially, politically or otherwise from this issue being resolved in the manner proposed, (d) because they are on record as significant supporters of getting Curry elected and cannot afford to undermine his success in other areas due to his losing on this issue, (e) as they contributed in some way to this problem arising in the first place and see this as a chance to cover their prior sins and cement a more positive legacy for themselves, (f) due to an  expectation of political payback for falling in line on this issue, (g) because of significant peer pressure by business or other community interests  or (g) for a myriad of other reasons that aren't necessarily related to the merits of this solution.

4. The tendency to put down opponents as less than civic minded citizens or to portray them as "naysayers" or "if you are not with us, you are against us" vs. engaging in a civil discourse to address opponent's points.  If the proponent's arguments are valid and/or persuasive, they should relish such discourse.

5. The nagging feeling that by "kicking the can down the road" for 14 years we are just perpetuating the behavior that got us here in the first place.

6. That the ballot initiative involves financing the shortfall for an additional 14 years at a cost of $1.5 billion to taxpayers.

7. That the initiative's wording on the ballot may be misleading or designed to seduce voters with promises that are hollow in reality.

8. That the initiative is built on a foundation of prerequisites, the probability of which hasn't been properly addressed by proponents, meaning the whole initiative could end up falling like a deck of cards after all is said and done.  Where is the thought as to what happens next if all the prerequisites " fail to materialize?  To me this indicates a plan based more on "hope" than a holistic plan to insure true success.  Could it be that this plan has been rushed to the forefront too quickly?  Can we afford to gamble so much on deficient planning?

9. That the ability to reliably project revenues, obligations and budgets related to the sales tax, pension, and City budgets, respectively, to the year 2050, or so, is not supported by the City's past record and would be difficult, if not impossible, for even the most expert of experts to get right.  Dealing in the present is far less risky than dealing in the way out future.

10.  Burdening and handcuffing future taxpayers and politicians with the decisions of today's taxpayers and politicians who mostly will be long gone or out-of-the picture when this sales tax kicks in.  That's deja vu to me.

11. That if the sales tax option passes, that we have fully cracked the budget nut.  Will the City budget truly be able to fund the City's minimum needs (and more if we really want to be a "world class" city) without reverting back to the other tax options currently off the table?  The Mayor's refusal or inability to full articulate just what will get funded, and to what degree, with the "relief" provided by this initiative validates this concern.

I am all "ears" to responses.  Please refer to the item number above in responding with any "rebuttals."  I like point-to-point answers .

[vicupstate]

^^ +100

Very well said and a very articulate and comprehensive post.

Personally, I wouldn't have nearly as much of a problem with it, as long as some significant revenue was being included NOW to address the problem. A .5 mill property tax increase dedicated to the pension in addition to current funding for example.   

[Gunnar]

This whole issue also serves to show how absolute election promises (No new / increased taxes ever, no matter what) are usually a bad idea as they limit options and do not take changing circumstances / a changing environment into account.

[benmarcus]

Excellent summary of the concerns surrounding this issue! I'm not very optimistic about it failing, but I do think even if it does pass, we will see substantial budget overhaul over the next decade which may allow us to basically make the tax void, or very short lived. I'm going to take a nice break from talking or thinking about it after the 30th, but I'd like to see an effort to basically write a shadow budget of what this city SHOULD have. If our elected leaders won't develop and present other options to us, we might as well do it ourselves.

[jaxlongtimer]

Opponents of half-cent sales tax plan to enter TV ad battle

By David Bauerlein Wed, Aug 24, 2016 @ 10:07 am

Opponents of a proposed half-cent sales tax for paying down Jacksonville's huge pension debt plan to announce Wednesday they will take their case to the airwaves with a television spot urging rejection of the measure.

So far, the Yes for Jacksonville campaign rallying support for the sales tax has dominated the cycle of paid campaign ads leading up to the Tuesday election on the referendum.

The news conference announcing that opponents will enter that advertising battle is slated for 1 p.m. Wednesday.

This is a developing story. Check back to jacksonville.com and the Thursday edition of the Times-Union for updates.

http://jacksonville.com/news/metro/2016-08-24/story/opponents-half-cent-sales-tax-plan-enter-tv-ad-battle

[benmarcus]

Opponents of half-cent sales tax plan to enter TV ad battle

By David Bauerlein Wed, Aug 24, 2016 @ 10:07 am

Opponents of a proposed half-cent sales tax for paying down Jacksonville's huge pension debt plan to announce Wednesday they will take their case to the airwaves with a television spot urging rejection of the measure.

So far, the Yes for Jacksonville campaign rallying support for the sales tax has dominated the cycle of paid campaign ads leading up to the Tuesday election on the referendum.

The news conference announcing that opponents will enter that advertising battle is slated for 1 p.m. Wednesday.

This is a developing story. Check back to jacksonville.com and the Thursday edition of the Times-Union for updates.

http://jacksonville.com/news/metro/2016-08-24/story/opponents-half-cent-sales-tax-plan-enter-tv-ad-battle

Good for them, I guess. I've reached out a number of times to get involved but to little avail. There was a window, there, when an intense canvass effort would have probably turned the tide decisively against, but it may be too late at this point.

[spuwho]

I just got bombarded with mailers that say Clay Yarborough is a tax and spend liberal and shouldnt be elected to anything.

In politics, there is always time.

A focused bombardment of TV, Radio and mailers could do it still.

[jaxlongtimer]

I saw one poll that showed undecideds ranging around 25 to 30% on this issue.  I would think such a group would tend to cast ballots closer to the end of the balloting cycle as they try to make their minds up.  If so, I agree, last minute voters could easily be the deciders on this issue as, taking into account the margin of error, the decided votes were leaving this as "too close to call."

[BridgeTroll]

Early voting is open now...

[Tacachale]

I commend Mayor Curry for the courage to put this issue front and center in his administration.  He is staking much of his limited political capital on the passage of the sales tax for pensions and, clearly, he is backing it up with energy, passion, and political gamesmanship.  And, given the below, I realize the Mayor and/or others in his camp may sincerely believe in their cause.

However, as others have noted, this doesn't mean that this is the best solution available.  Count me as one who remains skeptical.  As we come down to the wire, I have the following concerns that give me serious pause on this intiative:

1. Failure to consider all revenue raising options, which could save up to $1.5 billion, if implemented currently, just because the Mayor promised "no new taxes," no matter what.  That's an artificial restriction that disallows consideration of numerous other options that, at least on their surface, appear to deliver superior results.

2. Failure of the administration to effectively explain why these other "tax now" options aren't superior, aside from the Mayor's political promise to "not raise taxes" at any cost.

3. The perception that numerous proponents are behind this initiative (a) due to immense political pressure (the Mayor seems to have a way of extracting a price from those who fail to substantially board his train), (b) to also join the Mayor in saying "we solved this issue without a 'tax increase' as they pursue their own political ambitions, (c) as they may personally gain financially, politically or otherwise from this issue being resolved in the manner proposed, (d) because they are on record as significant supporters of getting Curry elected and cannot afford to undermine his success in other areas due to his losing on this issue, (e) as they contributed in some way to this problem arising in the first place and see this as a chance to cover their prior sins and cement a more positive legacy for themselves, (f) due to an  expectation of political payback for falling in line on this issue, (g) because of significant peer pressure by business or other community interests  or (g) for a myriad of other reasons that aren't necessarily related to the merits of this solution.

4. The tendency to put down opponents as less than civic minded citizens or to portray them as "naysayers" or "if you are not with us, you are against us" vs. engaging in a civil discourse to address opponent's points.  If the proponent's arguments are valid and/or persuasive, they should relish such discourse.

5. The nagging feeling that by "kicking the can down the road" for 14 years we are just perpetuating the behavior that got us here in the first place.

6. That the ballot initiative involves financing the shortfall for an additional 14 years at a cost of $1.5 billion to taxpayers.

7. That the initiative's wording on the ballot may be misleading or designed to seduce voters with promises that are hollow in reality.

8. That the initiative is built on a foundation of prerequisites, the probability of which hasn't been properly addressed by proponents, meaning the whole initiative could end up falling like a deck of cards after all is said and done.  Where is the thought as to what happens next if all the prerequisites " fail to materialize?  To me this indicates a plan based more on "hope" than a holistic plan to insure true success.  Could it be that this plan has been rushed to the forefront too quickly?  Can we afford to gamble so much on deficient planning?

9. That the ability to reliably project revenues, obligations and budgets related to the sales tax, pension, and City budgets, respectively, to the year 2050, or so, is not supported by the City's past record and would be difficult, if not impossible, for even the most expert of experts to get right.  Dealing in the present is far less risky than dealing in the way out future.

10.  Burdening and handcuffing future taxpayers and politicians with the decisions of today's taxpayers and politicians who mostly will be long gone or out-of-the picture when this sales tax kicks in.  That's deja vu to me.

11. That if the sales tax option passes, that we have fully cracked the budget nut.  Will the City budget truly be able to fund the City's minimum needs (and more if we really want to be a "world class" city) without reverting back to the other tax options currently off the table?  The Mayor's refusal or inability to full articulate just what will get funded, and to what degree, with the "relief" provided by this initiative validates this concern.

I am all "ears" to responses.  Please refer to the item number above in responding with any "rebuttals."  I like point-to-point answers .

I'll take a stab.

1 & 2: I don't agree with this at all. The city last had a ready-to-go pension reform package ready in 2011. It was voted down on the expectation of a better one. We spent years looking for it, exploring various avenues, but it never came together. Since Curry came into office last summer, there has been a pension task force and several studies. We've spent plenty of time looking for the perfect plan. In fact, while the subsequent proposals have arguably had stronger elements than the 2011 proposal, we'd have been better off passing that proposal rather than waiting another 5 years. We shouldn't wait even more.

3: That perception exists, but I don't know how much it actually reflects reality. At any rate, the same can be said for the other side of the coin; there's a perception that certain opponents are chiefly interested in taking Curry down a peg. However, most supporters and detractors that I've talked to, including folks in the "coalition", are sincere.

4: I don't see this one, either. I think the bigger problem is that most of the opposition just hasn't offered good alternatives. The plan to save by cutting current benefits would be a lot more difficult than just implementing taxes, for instance. Others, like the Jax Dems and several of the published op-eds, don't offer alternatives at all.

5 & 6: Yes, having to wait until 2030 to collect revenue is the big downside to the plan. But there are upsides too.

7: I think the wording is clear enough, but of course I'm already familiar with the proposal.

8: Apologies, I don't follow this one.

9: The projections I've seen so far are conservative. For instance, the sales tax estimates are based on 2% growth. According to the Times-Union, past sales tax growth has exceeded 2%. From 2002 to last year, it grew at 2.6%, even though this period includes the Great Recession. As for the investments, the prediction problem is there for any solution.

10: I regard this as the best feature of the proposal: it creates dedicated revenue that future mayors and councils can't mess around with. We haven't had good luck with our leaders adequately funding the pension in the recent past. They'd still have plenty of other money to move around, including sales tax if they desired.

11: I don't know, but what I do know is that things are going to get a lot worse without new revenue, wherever it comes from. Pension payments will shoot well above $300 million in a year or two and stay there until the 2030s. It's a hard rain's gonna fall.

[strider]

Let me help you with 8:  He is referring to the idea that the only thing cast in stone if the measure passes is that IF the unions agree to various changes, we can use the future sales taxes collected to pay towards the pension debt, however large it may be by then. 

If the measure passes and the unions say no way?  Then all of the time, money and political capital expended to pass it will be for nothing.  In my mind, that seems to give a lot of power to those unions.  I suspect they will go along, but it will cost us taxpayers dearly.  The unions end up with all the cards. And Curry and his buddies will give the unions whatever it is he knows they want to keep the "win". 

I would feel a bit differently about this tax idea if the negotiations had happened before the vote and were part of what we were voting on.  As it is, this is a half baked plan with no guarantees.

[vicupstate]

If the Sales Tax is defeated, they have to go back to the drawing board.  They NEED to go back to the drawing board, because this plan does nothing to help matters for 14 years.  FORCE them to make the hard choices that NEED to be made, by putting the kibosh on this bogus solution.   

[jaxlongtimer]

Here is the link to the anti-tax ad released today:

http://www.news4jax.com/video/n4jjaxtaxkidvideo

[jaxlongtimer]

I commend Mayor Curry for the courage to put this issue front and center in his administration.  He is staking much of his limited political capital on the passage of the sales tax for pensions and, clearly, he is backing it up with energy, passion, and political gamesmanship.  And, given the below, I realize the Mayor and/or others in his camp may sincerely believe in their cause.

However, as others have noted, this doesn't mean that this is the best solution available.  Count me as one who remains skeptical.  As we come down to the wire, I have the following concerns that give me serious pause on this intiative:

1. Failure to consider all revenue raising options, which could save up to $1.5 billion, if implemented currently, just because the Mayor promised "no new taxes," no matter what.  That's an artificial restriction that disallows consideration of numerous other options that, at least on their surface, appear to deliver superior results.

2. Failure of the administration to effectively explain why these other "tax now" options aren't superior, aside from the Mayor's political promise to "not raise taxes" at any cost.

3. The perception that numerous proponents are behind this initiative (a) due to immense political pressure (the Mayor seems to have a way of extracting a price from those who fail to substantially board his train), (b) to also join the Mayor in saying "we solved this issue without a 'tax increase' as they pursue their own political ambitions, (c) as they may personally gain financially, politically or otherwise from this issue being resolved in the manner proposed, (d) because they are on record as significant supporters of getting Curry elected and cannot afford to undermine his success in other areas due to his losing on this issue, (e) as they contributed in some way to this problem arising in the first place and see this as a chance to cover their prior sins and cement a more positive legacy for themselves, (f) due to an  expectation of political payback for falling in line on this issue, (g) because of significant peer pressure by business or other community interests  or (g) for a myriad of other reasons that aren't necessarily related to the merits of this solution.

4. The tendency to put down opponents as less than civic minded citizens or to portray them as "naysayers" or "if you are not with us, you are against us" vs. engaging in a civil discourse to address opponent's points.  If the proponent's arguments are valid and/or persuasive, they should relish such discourse.

5. The nagging feeling that by "kicking the can down the road" for 14 years we are just perpetuating the behavior that got us here in the first place.

6. That the ballot initiative involves financing the shortfall for an additional 14 years at a cost of $1.5 billion to taxpayers.

7. That the initiative's wording on the ballot may be misleading or designed to seduce voters with promises that are hollow in reality.

8. That the initiative is built on a foundation of prerequisites, the probability of which hasn't been properly addressed by proponents, meaning the whole initiative could end up falling like a deck of cards after all is said and done.  Where is the thought as to what happens next if all the prerequisites " fail to materialize?  To me this indicates a plan based more on "hope" than a holistic plan to insure true success.  Could it be that this plan has been rushed to the forefront too quickly?  Can we afford to gamble so much on deficient planning?

9. That the ability to reliably project revenues, obligations and budgets related to the sales tax, pension, and City budgets, respectively, to the year 2050, or so, is not supported by the City's past record and would be difficult, if not impossible, for even the most expert of experts to get right.  Dealing in the present is far less risky than dealing in the way out future.

10.  Burdening and handcuffing future taxpayers and politicians with the decisions of today's taxpayers and politicians who mostly will be long gone or out-of-the picture when this sales tax kicks in.  That's deja vu to me.

11. That if the sales tax option passes, that we have fully cracked the budget nut.  Will the City budget truly be able to fund the City's minimum needs (and more if we really want to be a "world class" city) without reverting back to the other tax options currently off the table?  The Mayor's refusal or inability to full articulate just what will get funded, and to what degree, with the "relief" provided by this initiative validates this concern.

I am all "ears" to responses.  Please refer to the item number above in responding with any "rebuttals."  I like point-to-point answers .

I'll take a stab.

1 & 2: I don't agree with this at all. The city last had a ready-to-go pension reform package ready in 2011. It was voted down on the expectation of a better one. We spent years looking for it, exploring various avenues, but it never came together. Since Curry came into office last summer, there has been a pension task force and several studies. We've spent plenty of time looking for the perfect plan. In fact, while the subsequent proposals have arguably had stronger elements than the 2011 proposal, we'd have been better off passing that proposal rather than waiting another 5 years. We shouldn't wait even more.  This response totally overlooks my point that implementing a 6 cent gas tax (which, by the way, amounts to a sales tax on gas, so many non-residents would join in paying for it, just like the sales tax proposed) combined with a modest 1/4 mill or so property tax would easily fund the annual $40 million extra that is required.  You still give me no reason for why this can't be implemented aside from the Mayor's pledge of "no new taxes."  It remains, to me, an artificial constraint preventing us from considering what is likely the very best option for addressing the pension's under-funding.

3: That perception exists, but I don't know how much it actually reflects reality. At any rate, the same can be said for the other side of the coin; there's a perception that certain opponents are chiefly interested in taking Curry down a peg. However, most supporters and detractors that I've talked to, including folks in the "coalition", are sincere.  While I agree, many people are sincere, as I stated previously, I believe the most public supporters of the plan are more likely to fall into one of the categories I outlined.  It's unlikely they would be so passionate about this issue otherwise, especially considering the public backers are almost all the "usual suspects."  Only thing unusual here, is the net is wider than usual.  I think that's because this is so central to Curry's first term success as mayor and he is pulling out all the stops.

4: I don't see this one, either. I think the bigger problem is that most of the opposition just hasn't offered good alternatives. The plan to save by cutting current benefits would be a lot more difficult than just implementing taxes, for instance. Others, like the Jax Dems and several of the published op-eds, don't offer alternatives at all.  I think the opposition has done a great job of explaining themselves and promoting excellent alternatives.  And, cutting benefits isn't their most frequent point, but rather raising taxes now, not 14 to 15 years from now.  I have seen many backers of the referendum who say something along the lines of, "Yes, the referendum isn't necessarily the best option, paying now would be preferred, but the referendum is the easy way out so let's take it."  That's typical Jax leadership failing again to take the high road.  Main issue opposition has is the ability to get their message out as "loudly" as the proponents.  Just look a the T-U doing a front 1/2 page editorial in the Sunday paper.

5 & 6: Yes, having to wait until 2030 to collect revenue is the big downside to the plan. But there are upsides too. And the upsides are...? vs. spending an extra $1.5 billion?  What is worth that cost?

7: I think the wording is clear enough, but of course I'm already familiar with the proposal.  There was a great column in the T-U early on about the "readability" failure of the wording applying standards usually reserved for this issue.  Looks like the courts will have the last word on this.  Will be interesting if it's adverse to the administration given the vote will already be over with.  I don't think courts like overturning votes after the fact, so, no matter the merits, this is likely now an uphill battle.

8: Apologies, I don't follow this one.  As someone noted, the contingencies include reaching the necessary deals with a union or unions, the projections holding up on revenues from the tax, the cost of financing for 14 years, and the impact on the current City budgets vs. the needs of the City.  Even with passage, many expect the City will still struggle to keep up with the growing backlog of infrastructure projects, public safety, and other needs.  Lot's of "what ifs" need to align for this to work.

9: The projections I've seen so far are conservative. For instance, the sales tax estimates are based on 2% growth. According to the Times-Union, past sales tax growth has exceeded 2%. From 2002 to last year, it grew at 2.6%, even though this period includes the Great Recession. As for the investments, the prediction problem is there for any solution.  Well, the Better Jax sales tax projections didn't pan out resulting in that tax being extended.  The sales tax revenue isn't the only critical projection either.  There is the annual City budget and the actual funding to maintain the pension plan (aside from demographics, investment performance is a big concern here).  We are talking, too, of projections over 50 years or so.  Show me anyone who can do that accurately!

10: I regard this as the best feature of the proposal: it creates dedicated revenue that future mayors and councils can't mess around with. We haven't had good luck with our leaders adequately funding the pension in the recent past. They'd still have plenty of other money to move around, including sales tax if they desired. No good luck with our leaders?  How about leaders not doing their job.  Nothing to do with "luck."  This is a self discipline problem and permeates many of the issues in the City. Downtown development failures are a result of the same approach - we can't stick to a plan for more than a year at a time.  This shortsightedness is inexcusable and it's what caused the pension problem to begin with.

11: I don't know, but what I do know is that things are going to get a lot worse without new revenue, wherever it comes from. Pension payments will shoot well above $300 million in a year or two and stay there until the 2030s. It's a hard rain's gonna fall.  You just proved the validity of my concerns.  We need new revenue, and we need it now, not 14 years from now.  Until our City leaders deal with it, our problems will persist.  This initiative does nothing for the present.  Don't expect to see major improvements until current taxes are increased.  That's why a "NO" vote appears to be the answer here.

Tachachale, first, thanks for taking the time to respond.  While I still beg to differ, as evidenced by my responses in red above, I respect your views and appreciate your dignified response.