A.G. Gancarski
Just hours after the final Senate committee OK’d the bill Wednesday, the Florida House overwhelmingly approved the (HB 1297) Discretionary Sales Surtax bill, the key to Jacksonville defraying its unfunded pension liability.
The surprising thing about the process: how smoothly the proverbial “heavy lift” went. Senior staff in the mayor’s office expected resistance from the House that, due to the masterful handling of the measure by Travis Cummings, was successfully quelled.
This was demonstrated Tuesday, when the Florida House held a successful second reading Tuesday of Jacksonville’s “pension tax” bill, which would facilitate a referendum to extend the current half-cent sales tax 30 years and devote it to paying off Jacksonville’s $2.6 billion of unfunded pension liability. New amendments added by acclamation: the separation of the Police and Fire Pension Fund board from collective bargaining, which was a practice of the past; and a requirement of a 10 percent employee contribution once the bill went into effect.
That went well, and only bolstered the confidence of Jacksonville lobbyists that there would be clear sailing when it came time to vote. That clear sailing was facilitated by regional legislators offering vocal and unstinting support, regardless of party lines.
After a brief introduction of the bill by Cummings, Mia Jones made the case as a Jacksonville Democrat, “asking for us to get permission to solve our own issues.”
“We as a community will come together and be responsible for the decisions we made,” Jones said.
Charles Van Zant echoed Jones’ words.
“I grew up in [Jacksonville] watching that pension problem grow, with no end and no resolution,” Van Zant said, adding that “they haven’t asked us for anything but our permission to vote and solve this problem on their own.”
Democrat Dwayne Taylor noted his own concerns in the State Affairs Committee, and noted Cummings working with him to resolve them.
“This is a pretty decent solution. I have my concerns,” Taylor, a former firefighter, said, but his concerns were allayed by a talk with Jacksonville Fire Union Head Randy Wyse.
Reggie Fullwood, a Jacksonville Democrat, likewise voiced his support for “the best solution on the table for our city.”
“Everyone is banking on this solution,” including the mayor and the City Council, and the business community, and the union leaders, many of whom made the trip to Tallahassee in support.
“What we have here is almost every stakeholder from Jacksonville” in the House to support “the best solution on the table.”
“It may not be the ideal solution… but at the end of the day, the people will decide if we move forward with this,” Fullwood said.
Then, there was pushback.
Rep. John Tobia said that “it would put Jacksonville’s pension system in a state that is better than Florida’s,” given the ultimate goal of 100 percent funding before the tax sunsets.
“Before you come to the legislature… look at your own budget,” Tobia said, hammering Jacksonville budget decisions during FY 2014-15, like the funding of One Spark, the Jacksonville Armada, the Riverwalk, and the “Park and Spark.”
“What this bill does is it opens [this mechanism] up to other cities in the state,” Tobia, a Melbourne Republican, said, including Orlando, Miami, and Tampa, which would eventually go through with what would be, statewide, a “multi-billion dollar tax increase.”
Rep. Lake Ray, a co-sponsor of the bill, was the first on Wednesday to bring up the cautionary example of Detroit, noting that “one of the things the previous mayor did to balance the budget was turning the street lights off.”
Ray’s take: that’s not the best way forward.
Ray also noted that this wasn’t a new tax, but an “extension of a tax in 2030.”
David Santiago, now running for the US House, lauded Curry’s bill. As did Charles McBurney, who noted that “this is not a tax increase at all” and “does not violate our principles on taxes.” And Paul Renner, another Curry political ally, who noted that “all new employees would be on a defined contribution plan” and that “governance issues” would be fixed (as they were in the 2015 local pension reform legislation) via the House bill.
Cyndi Stevenson, still another Curry ally, said she was “proud of Mayor Curry’s bravery in addressing this longstanding issue” and that the bill is important for the ongoing “prosperity” of the area. Janet Adkins opined that this is a “common sense solution” to Jacksonville’s problem.
Then Van Zant brought it home: “the only opposition we’ve heard today is from people who don’t represent Jacksonville … when this bill passes today, the rest of you and the rest of the state will have an example of how to solve this problem … of what can be done.”
“All they’re asking,” Van Zant added, is “to present this to their own people for a vote.”
Cummings said he was initially reluctant to sponsor this bill. What drove his change of heart: seeing Jacksonville struggle with the issues that “this mayor and City Council have inherited.”
“I didn’t feel the need to help them, quite frankly,” Cummings said, but then he studied the issue and realized how existential the crisis was.
Cummings cited the 2015 benefits reform as an example of Jacksonville “getting their house in order,” and the mayor as being “bold enough to look this in the eye … and deal with a $2.6 billion unfunded liability.”
“The mayor and his team, and now the business community, has gotten behind this proposal,” Cummings continued.
He also affirmed that the PFPF board would never be involved in benefits negotiation again, and the importance of a “stronger commitment from employees with regard to their benefit security.”
Regarding the tax hike trope Tobia pushed, Cummings noted that the sales tax would stay at 7 percent through 2030, with the only difference, should the referendum pass, being the allocation from infrastructure to the pension obligation.
“Everybody has signed on as co-sponsors,” Cummings said of the regional delegation.
Cummings also cited the importance of the committee process in making the bill better, and closed … to applause in the chamber.
86 yeas. 23 nays. And Jacksonville is one step closer to solving this most intractable problem.
This is music to the ears of the business community, including the JAX Chamber, which backed Curry over Alvin Brown in the most recent election.
“This is one of the biggest issues facing Jacksonville and the unfunded pension liability is crippling our city finances,” said Matt Rapp, chair of Government Affairs for JAX Chamber. “We applaud Mayor Curry for his leadership on this issue. This is was a significant step today and it was critical for business leaders to be here today to show our community is behind this bill.”
