Lenny Curry, Tommy Hazouri sell pension tax to Jax ‘future leaders’

On Wednesday night, when the eyes of the political universe were on Cleveland, former RPOF chair and current Jacksonville Mayor Lenny Curry was closer to home, at Bistro Aix in San Marco.

Curry, who’d been elected as a delegate to the Republican National Convention, stood down for an alternate.

In fact, up until Wednesday evening, he hadn’t paid close attention to the convention at all, just watching some speeches Monday evening.

“I’m focused on this,” Curry said, regarding the marketing of County Referendum 1, the Aug. 30 ballot item that, if approved, would extend a current half-cent sales tax out to 2060, that would secure a dedicated revenue source for the $2.7 billion (and growing) unfunded actuarial liability on the city’s defined benefit pension plans.

If the referendum passes and the revenue source is secured, collective bargaining would then commence with the city’s separate unions, negotiating new plans Curry has described repeatedly as sustainable and in line with the market.

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As Curry and Tommy Hazouri, a former mayor and current councilman, spoke, the room was jammed with the kind of people one sees at City Hall during business hours. So jammed, in fact, the air conditioning wasn’t keeping up.

Councilmen Jim Love, Scott Wilson, and Garrett Dennis, two Republicans and a Democrat respectively, were in attendance. Likewise, lobbyists, such as Matt Brockelman of Southern Strategies, and members of Curry’s senior staff, such as Jordan Elsbury and Jessica Baker were there. Jacksonville Coalition for Equality’s Jimmy Midyette, who is doing more than anyone these days to pragmatically move Jacksonville toward an expanded HRO, was seen talking to Curry before the mayor’s remarks began. And fire union head Randy Wyse also made the scene.

In other words, a smart crowd was on hand for the “Future Leaders of Jax Coalition” event organized by council assistants Jenny Busby and Katie Schoettler.

Appropriately, Curry made a smart pitch, quickly pointing out Hazouri (one of the finance chairs for the “Yes for Jacksonville” political committee) as a way of discussing the tax extension as a “nonpartisan issue” that affects all of Jacksonville.

A nonpartisan issue, and a “bold” and “visionary” approach, Curry added, to deal with “the most important issue facing the city.”

Though Curry couldn’t resist one distaff reference to “issues with the previous administration and council,” he noted his first budget was approved unanimously, and the new one “speaks to the crisis we are facing.”

“There were a lot of asks I had to say ‘no’ to,” Curry observed. “We simply don’t have the funds.”

Public safety came out the best in the new budget, and the capital improvement budget, at $83.3 million, sounds ambitious but really is a response to “hundreds of millions of dollars in backlogged infrastructure.”

With this context, he reprised a jab at skeptics and naysayers: “Anybody who doesn’t believe that this crisis [could] destroy the city is uninformed or has an agenda I don’t understand.”

From there, the mayor told the tale of how Detroit was laid asunder by pension costs, “taking the easy road, raising taxes, and pretending the problem doesn’t exist,” while laying bare another reality: in the current budget, $292 million goes to pension costs.

“You get nothing for that … your tax dollars are not working for you,” Curry said.

Speaking to the young people, Curry added that this deal was necessary “so that those of you in this room aren’t facing this problem in the future.”

“You can’t do things without money and we are strapped as a city. What Jacksonville looks like in the next four years, the next 10 years, the next 15 years, rests on this vote.”

Hazouri, quipping that the mayor “is campaigning for this harder than he did in his own race,” echoed Curry’s argument that the problems of the past have to be resolved to stabilize the future.

“It’s not about us as much as it’s about y’all, what you want Jacksonville to look like,” Hazouri said.

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Questions came from those in attendance.

One such was a variation on a theme: Where will this extra money go?

Curry tempered expectations.

The latest “actuarial study suggests budget relief,” Curry said, referring to projections that Jacksonville could have $57 million more capacity in its coffers by FY 19 if the tax extension goes through.

However, Curry stressed his real goal is a “long-term solution” and he would be “all in” even if there were no budget relief.

If the referendum passes, Curry anticipates the unfunded liability would be resolved by the mid 2040s.

As some have noted, the 2015 pension reform package had the final payoff set for the early 2040s. But Curry said that would come at an existential cost, in terms of lost opportunities to resolve the aforementioned pitfalls, and that “assumes we don’t hit a financial wall.”

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A recurrent question was revisited by an audience member: Would new hires be pushed into a 401(k)-style program, including public safety officers?

Though the original proposal to the council in January had a 401(k) component, with Jacksonville’s CFO Mike Weinstein saying that the “challenge” was to create a defined contribution plan “attractive” enough to appeal to all six public sector unions, Curry did not commit to such.

Instead, Curry vowed to “sit down and negotiate plans that attract people we want to retain,” adding “the plans today are simply not sustainable.”

Referring to fire union head Randy Wyse and FOP head Steve Zona, who would be his negotiating partners, Curry said they’ve already had “tough conversations” and are committed to “lock arms and walk together” to attain the “best available option.”

Curry said that “sacrifices and additional sacrifices” have been made by public safety employees, including the 2015 pension reform that went through at the end of the Alvin Brown administration. The need now is “to secure an additional source of revenue.”

“Men and women were promised benefits,” Curry continued. “They built their lives around it. We’re talking about families.”

Curry also addressed the charge that the tax extension is a regressive measure, noting that some of the burden would be borne by people who work in Jacksonville and live elsewhere, and that in “underserved neighborhoods” that he has visited, homeowners are very resistant to the idea of a millage hike.

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Ultimately, Curry thinks there’s going to be a yes vote.

If not?

“Tough budgets and severe cuts” would be required.

And he added Jacksonville is already seeing the effects.

“It’s become the new normal to accept second-rate services,” Curry said.

And therein rests the paradox.

Those who travel to other cities, where the pension crisis isn’t at Jacksonville’s level, notice things like lawn mowing and basic maintenance that they don’t see in Jacksonville, where much of the city looks like the desolate cities of the Northeast and Rust Belt, in large part because a low-tax mentality didn’t jibe with a pension deal negotiated during a time of what Alan Greenspan described as “irrational exuberance.”

Curry, in marketing this initiative, has had to grow as a mayor. He’s become less partisan, not serving up the red meat some might have expected from him a year ago. He’s learned, and is learning, to build consensus and elicit community buy-in.

With less than six weeks to go before the referendum, expect him to continue refining his pitch, to explain to Jacksonville voters who might not understand amortization that the future really is riding on creating actuarial confidence that this $2.7 billion millstone will be addressed by a source of revenue that no future council or mayor could take away.