‘People are ready for the straight truth’ on pension costs, says Lenny Curry

As Jacksonville Mayor Lenny Curry continues to make the case to extend the half-cent Better Jacksonville Plan tax from 2030 to 2060 to pay off the current $2.7 billion unfunded actuarial liability on the city’s pension costs, the marketing effort takes many forms.

One is the most obvious: the media campaign that will be funded by the “Yes for Jacksonville” political committee, which has over a half million dollars in the bank as of the end of May.

Another component of the marketing effort: an “informational video,” planned on the city government side, “to be used in the coming weeks to explain how this directly affects citizens.”

Several interviews in the works, one of them being Rep. Travis Cummings, will offer what an internal email calls “perspective from lawmakers who have invested in this issue and can provide historical knowledge.”

Beyond that, there will be plenty of Curry speeches — as he said last Tuesday in his first of four town halls with city employees last week, people will get sick of getting mail from the mayor and sick of seeing him on TV. He will be making the rounds to town hall events held by Jacksonville City Council members.

And in doing all of this, he will find a way to refine his pitch, attempting to address the critics who contend the tax won’t fill the hole created by the mounting unfunded liability, that a millage rate hike would be a fairer way to shift the burden from the working class to the ownership class, and that the sales pitch itself has holes in it.

Curry needs 50 percent plus one of the vote on Aug. 30. And some of the principal exponents of that pitch will be the very city employees poised to benefit from a secure, dedicated source of revenue for their pension liabilities.

To that end, Curry is pitching them hard, as the Friday afternoon meeting he had with city employees at the Ed Ball building downtown showed.

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That meeting was the second of the day in the venerable downtown building’s first-floor meeting room … and, as the first was, it was standing room only.

Curry delivered remarks at the outset, which seemed to have demonstrated a talking-point evolution.

Curry used the phrase “reform-oriented” to describe the plan, and referred to the “debate and discourse” meeting attendees had encountered in the “press,” two phrasings that seemed designed to head off criticisms.

Curry, as he has previously, appealed to general employees to “get the message out,” even as he discussed “issues with morale,” including tight budgets that have been a result of “ever-increasing pension costs.”

And therein is the reason city employees, in the end, will support this measure. Their personal books are tougher to balance every year because the city is paying phantom costs, devoting almost a third of the operating budget to things that have little to do with operation.

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After his opening remarks, the mayor took questions. The vibe was like that of any CEO at any corporate town hall.

One employee, a Russian immigrant, brought his 15-year-old daughter to the town hall. Why should people of her generation, who can’t vote for this but will pay for it if they don’t leave town, support this?

“For folks who are not old enough to vote,” Curry said, “people who believe they’re not paying for pension costs” need to recognize that “they’re paying for … exorbitant pension costs.”

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Another off-script question followed: will city employees get their 2 percent pay cut restored from years ago?

No commitments were made by the mayor.

“We’ll take it into consideration,” said the mayor, who added that “the issue has to be dealt with.”

But it’s not going to be dealt with in this budget, it was clear.

“This is about solving a financial crisis,” Curry said.

Not a “sexy issue,” Curry added, and it “isn’t one anybody would expect a first-term mayor” to tackle.

Of course, Curry ran on a platform of getting the fiscal house in order. The “90-day audit,” which he campaigned on with great fanfare and didn’t message heavily once it became available last fall, laid the issue out clearly: “Projected annual deficits of more than $30m beginning in FY 17 are not sustainable and would result in the depletion of the General Fund unassigned fund balance by FY 18 or FY 19… Absent additional action, annual pension contributions from General Fund could be greater than $244m in FY 19.”

Those contributions are already above that $244 million number already, meaning the audit that sounded so apocalyptic months back now looks like a model of optimistic forecasting.

Curry has not mentioned the audit by name this year. But the subtext, broken down in less actuarial language, resonated through his remarks Friday.

“Our budget is under such strain,” Curry said, with “a whole lot of need in the city of Jacksonville right now.”

With that in mind, Curry said, “promises to [interest] groups wouldn’t be truthful” and “people are ready for the straight truth.”

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Of course, some things can’t be said.

Curry asserted Friday, as he has done previously, that the unfunded actuarial liability would be funded around 2045, as this tax “will generate billions of dollars.”

That revenue-generation assumption is predicated on continued growth in the city. Left unstated, however, is the corollary: pensioners of 2016 will pass away over the next few decades, easing the burden on the current plans in out years if they close as the pool of pensioners dwindles.

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Curry framed this initiative as a legacy issue toward the end of his remarks.

“Most elected officials,” the mayor said, “think in two-, four-, or six-year cycles,” a mindset driven by expedience.

Curry asserts this revenue — an “asset to pay for future liabilities” — is going to be a move that, if successful, will lead future Jacksonville leaders to “look at this era with tremendous respect.”

There are obviously open questions: one of them mentioned by Curry, that being “how far out we amortize pension costs.”

The question of amortization, central to the financial projections behind the plan, has been put on the back burner of late in the rhetoric of this issue, with some Democrats suggesting it didn’t poll well. But for this plan to work optimally, stretching out the obligation over time, taking advantage of increased revenue and an inevitable continued decline in the worth of the currency, is the move.

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Of course, there will continue to be skeptics.

Cold water was doused on the urgency of the Curry proposal in an excellent piece in the Florida Times-Union this weekend, which editorially supports the proposal but is raising counterargument on the news side.

Among the assertions in the piece:

The hit from pension costs will be closer to $208 million in the next fiscal year than the $280 million floated.

There is room to hike millage rates.

And the apocalyptic language used by Curry, saying Jacksonville could be the next Detroit if the deal doesn’t pass, isn’t borne out by the reality that there are unexplored opportunities to raise taxes and fees in other areas.

Curry isn’t going to be able to quell that tide of skepticism. He will counter-message it to the extent he can, but he is hamstrung by not being able to get into the weeds.

Not because he can’t; as a CPA, he can talk numbers as well as his critics can.

But because he has to break down the crisis, and his resolution, in a way the general public can understand.

The overlap between the political side and the policy side has never been fully absent from the Curry administration. On this issue, critics will contend they are one and the same.