A.G. Gancarski
The extension of the Better Jacksonville Plan sales tax to address the city’s $2.7B pension debt is one step closer, as legislation was filed Wednesday.
“Adding this referendum to the ballot is a big step as we seek to resolve for good an issue that has long plagued our city,” said Mayor Lenny Curry. “With City Council’s approval, Jacksonville citizens can support our efforts to close the pension plans that caused this problem so it doesn’t happen again and permit us to use a current source of revenue to meet our obligations.”
The administration will request City Council’s approval of a referendum to be presented to Jacksonville voters in the August primary election, extending the half-cent Better Jacksonville Plan sales tax to provide relief from the unfunded liability.
The extension would go until 2060, or until the amortized pension liability is paid off. Even though the tax would not go into effect until the Better Jacksonville Plan tax sunsets, benefit to the general fund would be realized by the end of the decade, freeing up capital for investment in infrastructure, human resources, and reserve funds.
As well, the city’s extant defined benefit plans would be closed, though it is unclear before collective bargaining what would replace them.
“Adding this referendum to the ballot is a big step as we seek to resolve for good an issue that has long plagued our city,” said Mayor Curry. “With City Council’s approval, Jacksonville citizens can support our efforts to close the pension plans that caused this problem so it doesn’t happen again and permit us to use a current source of revenue to meet our obligations.”
The legislation includes referendum language reading as follows: “Permanently closing up to three of the City’s underfunded defined benefit retirement plans, increasing the employee contribution for those plans to a minimum of 10 percent, and ending the Better Jacksonville half-cent sales tax are all required to adopt a half-cent sales tax solely dedicated to reducing the City’s unfunded pension liability. Shall such pension liability sales tax, which ends upon elimination of the unfunded pension liability or in 30 years maximum, be adopted?”
Once adopted and collective bargaining is completed, the City of Jacksonville will file an implementing ordinance for City Council to approve the collective bargaining agreement and details about the discretionary sales surtax dedicated to only paying unfunded pension liability.
Jacksonville’s pension outlay is $260 million per annum, and is only going up, consuming a quarter of the operating budget. The pension funds are meagerly funded, with the Police and Fire and Correction Officers’ pension funds both below 50 percent funded.
Curry’s emergency audit in 2015 identified pension as the pressure point that threatens the city. Curry has pledged to invest his political capital in getting this passed. Now, the race is on to get buy in from voters.
