A.G. Gancarski
Extra payments for Jacksonville’s $2.8B unfunded pension liability? Councilman Danny Becton wants them. But he doesn’t have support in the Mayor’s Office.
Despite a pension reform bill becoming law earlier this year, at least one city councilman, who on Monday likened the pension reform package that was the signature legislative achievement of the Lenny Curry Administration to “chapter 11 bankruptcy,” wants more to be done.
And he says half a billion dollars could be realized by his reform proposal.
Jacksonville City Councilman Danny Becton introduced a bill in May that would mandate 15 percent of budgeted money over the FY16-17 $1.088B baseline budget would go to the city’s $2.8B unfunded pension liability from the next budget forward to when the pension ½ cent sales surtax kicks in … no later than 2030.
Before the meeting, Becton asserted that the Lenny Curry administration, via CFO Mike Weinstein, had a “very favorable” read on the bill, which he says could bring in $504M in extra money between next year’s budget and FY31.
Weinstein disputes any assertions that he was favorable to the bill. As does Mayor Lenny Curry, who took issue with Becton’s interpretation of the meeting about this bill with Weinstein and other senior staff members.
“That didn’t happen,” Curry said Monday afternoon regarding Becton asserting administration support for his bill. “I don’t know where he got that. But that’s not the case.”
Curry noted the historic nature of Jacksonville’s pension reform package, pushed through “against all odds.”
“These are historic reforms,” Curry said, with “unanimous” support in Council.
While Curry recognizes Council’s right to legislate, he also reserves the right to review legislation — and it’s clear this has a stumbling block.
Becton, apprised of Curry’s comments Monday afternoon, said that he had been talking about a different meeting and misunderstood the initial question.
Becton said that he was told “they were not going to help me, but they were not going to come out against me.”
Becton also clarified his read on Weinstein’s position, saying that while Weinstein thought his proposal was a “good idea,” that did not translate to support for “implementation.”
The difference between Becton and Curry/Weinstein in their interpretations of events filtered into Becton’s read of pension reform, which he said was “kind of almost like going through a Chapter 11” that “got the creditors off our back.”
Becton noted that the bill is “nothing but an extra payment the city would make” – an “extra contribution” like paying beyond the minimum payment on a credit card to bring down the balance.
As it stands, Becton said that paying the minimum alone would make future borrowing more expensive, akin to the predicament faced by someone with a credit rating of “500 or 600.”
This mechanism would help with – among other things – protecting the city’s credit rating, which Becton asserts is “at risk” due to the delayed pay-down, and protecting against grazing the five-year “liquidity floor” on police and fire pension debt – over 60 percent of the unfunded liability.
Pension reform, said Becton, has been “at the expense of the future.”
Council members on hand were not absolutely sold by Becton’s presentation, especially given the lack of fresh actuarial tables to firm up the projections.
And without the Mayor’s Office on board, the bill will be a heavy lift in Finance Committee Wednesday afternoon.
