A.G. Gancarski
The office of Jacksonville Mayor Lenny Curry believes it is done with pension reform. Yet Council President Anna Brosche and other allies, including the Chair and Vice-Chair of the Finance Committee, disagree.
That conflict set the stage for the latest skirmish related to a bill introduced months back by Councilman Danny Becton.
The bill, brought back yet again recently, was mulled in the Finance Committee Tuesday, ahead of consideration in Rules Committee Tuesday afternoon.
The Finance hearing was the most favorable of all potential terrains for the bill; Finance Chair Garrett Dennis is a co-sponsor of the bill, along with Finance Vice-Chair Becton and Council President Brosche.
Yet, despite Council Leadership supporting this bill, it was clear after some discussion that there was no path even on the home court of two prominent co-sponsors.
Despite this, Becton called the question — forcing a 4-3 vote against the bill, and offering a setback for the Council President, the Finance Chair, and the Finance Vice-Chair. It won’t do better in Rules.
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2017-348 seeks an accelerated paydown of the city’s $3.2B unfunded actuarial liability on the city’s pension debt, based on increases in general fund revenue.
The current iteration of Becton’s bill offers a phased-in approach, moving from a 7 percent rate in FY18/19 and moving that up 2 percent a year, hitting the 15 percent threshold in FY 22/23. Assuming a 3 percent growth rate, that would add up to an extra $504M in city coffers by the end of FY 30/31, per Becton’s projections.
The code requirements could be waived if financial circumstances mandated.
The general employees pension fund — the best funded of the three city defined benefit plans — would no longer receive these proceeds, per Becton; they would go to the police and fire pension, and the corrections pension funds, both of which face deeper funding shortfalls.
CFO Mike Weinstein threw cold water on the bill early on, saying “we thought pension was basically finished,” noting that changes to the bill haven’t changed the Mayor’s Office’s position on the bill.
Weinstein also noted that, even when growth abates, the compounding of interest hikes will demand higher payments regardless — creating a potential unfunded mandate.
“If we’re neutral one year, we still have to make a compound increase to the pension fund,” Weinstein said.
Soon enough, Councilmen Matt Schellenberg and Reggie Gaffney joined the chorus of skepticism, with Schellenberg suggesting this bill be held in abeyance until budget discussions next August.
Schellenberg’s concern: a drop in ad valorem taxes, via changes in homestead exemption from the state, could take $26M off the table — and with that, the ability to invest in quality of life issues.
Clouding the forecast fuller: approximately $30M in un-reimbursed costs from Hurricane Matthew, and an as-yet-unknown fiscal hit from Hurricane Irma.
Yet another concern — “a significant amount of capital improvement needs throughout the county,” per Mousa.
“There would just be less monies for capital improvements,” Mousa told the panel.
Becton fought back, saying the Mayor’s Office caution on this bill is misplaced, given that “tough decisions” are made routinely by the Council.
“This is a situation where we do this every day in terms of appropriating funds that go out into the future,” Becton said, “and there isn’t a question.”
Becton also asserted that his bill got a favorable reception from the Curry Administration in the Spring — an assertion countered vigorously by the Mayor’s Office.
As well, Becton forecasted an economic downturn, noting that Pew, Moody’s, and Bloomberg all advocated for increased allocations to offset Jacksonville’s pension burden, potential “asset losses and low investment returns.”
Despite Becton’s argument, not everyone was sold.
Councilwoman Lori Boyer took issue with assertions from the sponsor that there are “deficiencies in the pension reform we passed,” which “does exactly what we committed to do and what the citizens voted for,” regarding an eventual “dedicated source of revenue.”
Boyer also had problem with the bill language, which had mandates rather than targets — “good goals.”
“I can’t support the bill as written,” Boyer asserted.
Councilman Reggie Brown noted that his district had water and sewer issues that hadn’t been addressed for decades, and it would be a “conflict” for him to support pension savings when basic infrastructure is neglected for his constituents.
“Promises made, promises broken”: Brown’s summation of the city’s approach to “existing communities not having the same quality of life as other areas in Jacksonville that were years behind in development.”
