Jax pension-tax bullet points reveal limitations in pitch

A review of bullet points prepared inside the Lenny Curry administration reveal a pension-tax pitch designed for broad appeal that has room for refinement ahead of the Aug. 30 referendum.

What’s being left out, however: the mechanics of how the deal actually works, via deferring the bulk of the obligation until the dedicated revenue — which will exceed $109 million by 2030 and be almost double that in 2060 — flows in, creating room for operations that otherwise won’t be there.

June projections point to savings within a few years of up to $57 million a year, a number akin to the capital improvement budget for any given year; money would be available to replenish Jacksonville’s diminished city worker pool, and to provide capital improvements under that scenario.

Also encouraging: revenue derived from the tax itself. That would range from projections of $109 million a year in 2030 to $197 million in revenue by 2060, at a point when even most of the later recipients of the plan would have passed away.

Despite a compelling case that the mechanics of the deal work out for city coffers, questions keep recurring from various groups … groups that will decide the ultimate success or failure of the referendum measure. And part of that misunderstanding may rest in the pitch itself.

Many of those questions seem rooted in a lack of understanding of how the finances of the deal work, and it is incumbent on the administration to find a way to convey that message before skeptics undermine it.

Specific constituent groups — from Northwest Jacksonville, to the faith-based social justice community, to residents of the Jacksonville beaches — have been interested in specific guarantees. However, the bullet points offer no such guarantees, instead highlighting more holistic benefits.

“Upon my election, I committed to the citizens of Jacksonville that I would address the pension liabilities that have long impacted families and communities throughout the city. With a commitment to improving public safety, increasing youth services, enriching neighborhoods and communities, and growing businesses and economic development opportunities, I recognize that a key barrier to these priorities and the future of Jacksonville is rooted in a failure to properly address pension obligations,” reads a bullet point.

“Because of the pension debt, I am prohibited from investing in services that are integral to our city. Every citizen cares about children, safety and growth of their neighborhoods. They too should care about pension debt to ensure a better future for Jacksonville,” reads another bullet point, as the “risk that pension debt poses for our city is one of the greatest threats to our future.

The assertion that “25 percent of the pension liability debt throughout the state lives in Jacksonville” is a bullet point; solving the pension problem could “strengthen key services” allowing the city to “hire more police officers, more crime prevention and intervention programs, more enhancements in city parks, and better investments in our neighborhoods.”

The burden is laid bare in the bullet points: Jacksonville “is paying an additional $160 million a year above its normal pension contribution for its three public pension funds. The city contribution to the three pension funds is nearly 20 percent of city’s operating budget.”

“My proposed solution closes the three plans,” Curry’s pitch notes, adding the solution is tailored to Jacksonville and other “[c]ommunities that have public pension funds that are funded below a 70 percent funding level that totals more than $2 billion in unfunded liability,” communities that “agree to do away with any defined benefit programs for their new employees; and have an already approved surtax that has a specific sunset date.”

The bullets frame the referendum as an “opportunity to extend its already approved surtax that has a sunset date of 2030 to continue for the sole purpose of addressing the unfunded liabilities of the city’s three funds,” which permits supplementation of that.

“While the City of Jacksonville would continue to use operating funds to annually contribute to its normal pension costs, the extended surtax would sunset when the City of Jacksonville’s pension funds are fully funded or 2060, whichever comes first.” the bullets continue.

Left unstated in the bullet points are some conditions that are sticking points for some.

A frequent refrain of public comment at Jacksonville City Council meetings is one of wondering what part of the money secured from the tax will go to initiatives for Northwest Jacksonville. Given the nature of the proposal, and the dedication of tax resources specifically to the $2.7 billion unfunded actuarial liability for the pension, bullet points can’t really address that with specificity without delving into a series of variables.

However, what they can address (perhaps with Ross Perot-style bar graphs) is the main point of the sales pitch: an argument that by extending the terms of the obligation, the combination of increased revenue, decreased purchasing power of the dollar in the upcoming decades, and an inevitable attrition of beneficiaries from the plans will ensure that as obligations from the unfunded liability increase, dedicated dollars will be available to pay them off.

The Curry pitch hasn’t drilled down into detail to that degree yet, relying on a combination of public spirit and a big-picture pitch. Some portion of the million-dollar cache “Yes for Jacksonville” has might have to be earmarked for that purpose.