A case could be made that Jacksonville Mayor Lenny Curry has lost control of the pension reform narrative at the worst possible time.
In recent days, both the Florida Times-Union and FloridaPolitics.com have run stories questioning the lack of substantive detail provided by the mayor’s office regarding the pension reform package introduced last week to the Jacksonville City Council.
Curry has promised a transparent disclosure of numbers — and real financial savings — at a workshop with the Jacksonville City Council on Thursday.
At least one third-party analysis, meanwhile, says the increased contribution levels to retirement plans of new hires, from 12 percent in the 2015 pension reform agreement to 25 percent in the current iteration, will lead to $662M of extra costs from 2017 to 2031.
With that in mind, we asked the mayor on Tuesday about his confidence in the pension reform package.
Short version: he stood his ground against the critics, saying to “let them chirp.”
The long version is below.
Curry, in describing the “numbers that will be laid out before the City Council on Thursday,” noted that what will be presented is a “sustainable solution pension reform that puts this to bed once and for all.”
“People,” said Curry, “have been debating this for years. Without the ability to move forward and get something done.”
“I put forth a reform plan that traveled a long road to get here, from the House and the Senate, the Governor. City Council passed a resolution that unanimously supported it. The voters said yes — 65 percent of them. We collectively bargained with the unions and we’re now here with a secure source of revenue, dedicated to solving this problem.”
That source of revenue: a half-cent sales tax extension that kicks in no later than 2030, when the Better Jacksonville Plan obligation is finally paid off, which will facilitate a goal of the mayor’s: “getting us out of the pension business.”
“This is a comprehensive solution. I’m confident we’re going to get this done. And let the critics keep chirping.”
One of the caution flags flown by those chirping critics: what is seen as an overly optimistic read on anticipated inflow of money from the tax extension.
The Curry Administration expects a 4 percent increase per annum. External critics are more bearish.
“All these people who are criticizing this and debating this — what’s their source of revenue? Long before I got into office, they had the opportunity to present a solution,” Curry said.
“They either didn’t present it, didn’t know how to present it, didn’t get it done. So we’re here with a secure source of revenue — the half-penny — that has historically, except for the recession, grown at well over 5 percent.”
“A very important distinction between the Better Jacksonville Plan and this plan is, when they set their growth assumption rate, they borrowed a billion and a half dollars against it. They had to meet that growth rate to meet that obligation,” Curry said.
“Our sales tax growth rate: we’re not borrowing against it. So it’s adjusted every year in an actuarial analysis and the pension payments will reflect whatever the reality of the situation is,” Curry added.
When asked about another criticism: that the city would be on the hook for a 25 percent annual contribution for new hires under the defined contribution plan, up from 12 percent in the 2015 pension reform deal, Curry likewise stood his ground.
“Right now, we spend 119 percent of retirement costs for every single person we hire,” Curry said. “Not even close to what we’re going to put into the defined contribution plans.”
“Not to mention that guaranteed pensions aren’t predictable. Certainly there’s actuarial analyses and whatnot that goes into it, but we are facing unfunded liabilities and crushing pension costs.”
“Defined contribution plans are cost certain. We know exactly where we’re headed, we can predict it, we can manage it. And we’ll solve the problem once and for all.”
The Curry administration will make its case to the City Council on Thursday afternoon.