Jax pension tax referendum gets resistance at Arlington town hall

Kerri Stewart, Lenny Curry's Chief of Staff, takes pension tax questions.

The Arlington neighborhood of Jacksonville is like a former beauty queen who lost her looks.

The strip malls look rough now — half empty in many cases, and the retail trends downmarket.

The neighborhoods look rough — more renters than previous years, more owner-occupied homes headed into foreclosure, despite the strong macroeconomic numbers that would seem to speak to different outcomes from the downwardly mobile former middle class.

The roads look rough now — pockmarked with potholes, reminiscent of the acne-plagued face of an adolescent.

Just as rough: the Monday night town hall meeting in Arlington for District 1 Councilwoman Joyce Morgan, which was a discussion of the pension tax referendum.

Morgan made it no secret. She wanted Mayor Lenny Curry to show up and make the case to her constituents.

However, Curry was otherwise engaged.

Sent in his stead was Chief of Staff Kerri Stewart, who, in Morgan’s words, was there “to talk all things related to the pension.”

Stewart led off, talking about the “beautiful location” of the yellow-lit strip mall church, before noting Curry was “committed to address the pension debt.”

Then she outlined the pitch, saying there were ways to address the $2.7 billion unfunded actuarial liability on the pension tax: among them, to “borrow against the future revenue stream” and to “take future revenue and align it with future expenses.”

“What the Legislature has given us,” said Stewart, “is a dedicated revenue source.”

The explanation went on for some minutes, then a red flag popped up early in the Q&A, as a self-identified CPA pointed out that “the lay people” don’t understand the pitch.

Stewart rolled out a metaphor: the pension obligation is like a 15-year mortgage. The Legislature, which approved a 30-year term to pay off the obligation, allowed the payment to go down.

“We will spread out payments over 30 years,” Stewart said. Beyond that, details were sparse.

“New projections are coming out in the next couple of days,” Stewart added, a “report from the actuary” referencing payment and risk.

The questions came in.

One questioner said “there’s got to be a catch” in terms of extending the term of payment out, but not paying anything.

“There is no catch,” Stewart said, adding that the general fund would still have to be used to pay the difference between the unfunded liability and the sales tax proceeds.

Another questioner framed the initiative as “pushing down the road” the burden of the unfunded pension liability.

Stewart’s response was that the goal is to “reduce the burden on the general fund as soon as possible.”

The cynics continued to speak up, with one woman wondering if pushing the pension tax bill through was “what the mayor was doing when playing around in Tallahassee.”

In response to that formulation, Stewart noted that “the money is coming in starting in 2031,” and the local government can “borrow against the money,” that the money can be “amortized with a different scheme,” or that “we can do nothing” and benefit from the “immediate relief [offered] by stretching payments out.”

The questions continued for the chief of staff including: How does money you don’t get until 2030 help in 2017, 2018, and 2019?

The short answer? There was no short answer.

Stewart explained that there were “two parts to pension reform.” Part one is reforming benefits, which the council did under the previous mayoral administration. The second part, of course, is securing a “revenue source for the unfunded liability.”

Stewart, again, had to explain the mechanics: “borrow against future revenue … apply future revenue to future expenses” or “neither option” and just benefit from stretching out of the payment term.

“Payments will still be larger,” Stewart said, in an allusion to the reality that unfunded liability costs are going to keep expanding.

The obligation “will continue to go up” but the administration will “have money to pay it.”

Another question emerged: Why can’t contracts be negotiated now, “then figure out a vote on the referendum?”

Stewart noted contracts for all six public-sector unions have been negotiated in recent years.

“Employees will tell you there already has been shared sacrifice,” Stewart said.

Still another question: why not another half-cent tax?

Stewart, whose boss ran on a platform opposed to tax increases, noted that while “ideally a new half-cent sales tax,” started immediately, would bring in “$80 to $90 million a year,” Tallahassee would have “zero appetite for a new half-cent sales tax.”

Another questioner expressed “concern” about “getting this paid off now instead of passing to grandchildren,” before State Sen. Audrey Gibson, already re-elected without ballot opposition, stood up and took the mike.

Gibson explained the process used to get her to vote for the bill in Tallahassee, while distancing herself from the outcome of the referendum.

“The mayor called me around Thanksgiving,” Gibson related.

The senator told him point blank she would “absolutely not support any legislation that wouldn’t go back to voters for approval.”

The timing of that conversation was interesting, because the plan Curry presented to the Jacksonville City Council Finance Committee in January was contingent not on a voter referendum, but on a Council supermajority, which the Better Jacksonville Plan would have allowed.

Gibson then noted “two members not from Duval County carried the legislation,” which she “would not co-sponsor without a referendum.”

Distancing herself further from being tied to the outcome of the vote, Gibson said she was “not on the ‘selling the tax’ tour,” adding that her goal was to “make sure … the decision rests with you all.”

Then, unprompted, Gibson took aim at an argument outsiders would shoulder the burden of the tax.

“This idea that tourists will pay it,” said Gibson, “is not exactly the case. The people who live in the community will pay it.”

“It’s not just tourists. It’s lower income people and some middle class,” the senator added.

After the figurative mic drop, Joyce Morgan attempted to ameliorate concerns.

“We don’t want to put anything on our kids, but in the scheme of life, that’s something that happens,” Morgan said, alluding to today’s citizens “paying debts from long ago.”

Meanwhile, the always-sunny Morgan — for many years, she was a morning show presenter on local television — offered a coded recommendation to the mayor’s staff on hand.

“We’re not giving up on seeing the mayor at our August meeting.”

Translation: to make the sale in Arlington, Mayor Curry may need to close the deal himself.