On Wednesday, the Florida Senate voted 35-1 to approve the Discretionary Sales Surtax bill (SB 1652), which would allow Jacksonville to impose a pension tax via referendum if the bill is signed into law.
This passage represents the culmination of a concerted effort that started months ago, including the enlistment of an army of city lobbyists from the Fiorentino Group, Southern Strategy Group, and Ballard, as well as frequent trips to and from Tallahassee by Mayor Lenny Curry, who had vowed to increase the city’s presence in Tallahassee.
Curry was as good as his word. He was helped along by the Jax Chamber and many Council members, who went to Tallahassee earlier in the session, on the day of the House floor vote.
After a smooth second reading of the bill on Tuesday, and three clean committee stops on the Senate side, there was little drama involving the bill… a far cry from the worries expressed by senior staff in City Hall months ago, when this process was launched.
Bill sponsor Rob Bradley was terse in his introduction. There was no debate.
The bill, if signed into law, would allow a referendum in Duval County later this year regarding extending, until 2060, the 1/2 cent Better Jacksonville Plan infrastructure sales tax from its sunset date, which is no later than 2030, to help defray the $2.6 billion unfunded pension liability. In the process, the current defined benefit plan would be closed, and a defined contribution model would extend to all new hires going forward. A 10 percent employee contribution would be required.
Additionally, the Police and Fire Pension Fund Board of Trustees would be barred from collective bargaining negotiations of pension benefits, which actually accords with practice in Jacksonville since June 2015’s pension reform.
The House version of the bill passed 86 to 23 in February. Bradley noted in a conversation with Florida Politics that he was “actively involved in negotiating the House bill so that the bill would be in a position to be taken up and passed by the Senate.”
The big question now: the dispensation of Rick Scott, who has been noncommittal throughout the process, even as many reporters have asked him to declare a stance.
With the bill passing resoundingly in both chambers, and with Curry’s strong relationship with the Governor in mind, it’s hard to imagine anything happening from here on out but the bill being signed into law.
From there, a marketing campaign, funded by private dollars and likely coordinated by Curry’s Build Something That Lasts PAC, will be the next move, as Jacksonville residents would consider the bill on the November ballot. Estimates are that the campaign could cost three to four million dollars, and would involve every city stakeholder arguing in favor of the tax extension, which would allow Jacksonville to amortize the $2.6 billion unfunded pension liability and lengthen the term of repayment, even as it decreases the hit on the General Fund budget in years beyond 2020.
Curry, in a statement, gave all stakeholders credit for the process so far.
“Today marks an incredible milestone for our City, and the opportunities it presents for Jacksonville citizens,” said Mayor Lenny Curry. “I could not be more excited about the progress of our pension legislation, to date. Its success speaks volumes about the fine leadership of our legislators – particularly our sponsors Senators Rob Bradley and Aaron Bean and their House partners, Representatives Travis Cummings and Lake Ray, and the Duval and First Coast delegations. They have been tireless in their efforts these past several months in examining the threat pension liabilities pose to our city’s financial future. I look forward to the Governor’s review and next steps, which will enable us to increase investments in key priorities that will improve the quality of life for Jacksonville residents and communities.”
Senator Bradley said that “today marked the successful completion of a long legislative journey. It’s a big win for our region.”
“This bill represents a work product which was supported in a bipartisan fashion by local and state officials,” said Senator Bradley. “Addressing this critically underfunded pension liability is essential to the fiscal future of our state’s largest city.”
The bill, said a release from Bradley, limits participation to those local governments whose underfunded retirement benefit is below 80 percent of actuarial funding.
“I want to thank my colleagues in the Fla Legislature for their recognition of this fiscal crisis, which unfortunately is amongst the most serious in our nation. My birthplace will fail to achieve its great potential until it is resolved. I commend Mayor Lenny Curry and the City Council for their courage to tackle this issue, while also introducing reforms so that it never happens again,” said Representative Travis Cummings, the House Sponsor.
Currently, claimed the aforementioned release, the City of Jacksonville is the only municipality in Florida that faces a challenge serious enough to meet the criteria set forth in the bill.
One of Jacksonville’s lobbyists in Tallahassee, Matt Brockelman of Southern Strategy, summed up the importance of the Senate passage in a Facebook comment.
“Several weeks after overwhelmingly passing the Florida House of Representatives, today the City of Jacksonville’s top legislative priority passed the Florida Senate 35-1. You’ll be hearing a lot about this around town during the next 8 months, and for good reason. Using this legislation to address the City’s pension funding issues will restore tens of millions of dollars each year to Jacksonville’s budget, allowing us to once again invest in public safety, important city services and continued economic growth initiatives. Today is another huge win for Mayor Curry, our local legislators and all of us who call Jacksonville home.”