A.G. Gancarski
There is reason to celebrate this weekend in Jacksonville City Hall, as a potential budgetary poison pill was spit out after 11th hour moves in the Legislature.
The House has agreed to Senate language in an amendment filed to HB 7073 that would strike out a provision that worried some in Duval County who have been betting on a future sales tax designed to pay off legacy pension debt. The bill was passed unanimously, and will next move to Gov. Ron DeSantis.
The Republican Sen. Blaise Ingoglia amendment removed language that suggested the city would need referendums every decade starting in 2026 to renew its discretionary sales surtax that was passed on behalf of the Better Jacksonville Plan, but is slated to be extended to the city’s unfunded pension liability.
Rep. Wyman Duggan sought and got assurances that the controversial language was stripped from House sponsor Stan McClain.
“Thank you, thank you, thank you,” said the Jacksonville Republican representing the Southside and Westside of town.
The now excised language in question stipulated that the “pension liability surtax imposed pursuant to this subsection shall terminate on December 31 of the year in which the actuarial funding level is expected to reach or exceed 100 percent for the defined benefit retirement plan or system for which the surtax was levied or December 31 of the tenth year after the surtax was approved in a referendum under this subsection, whichever occurs first.”
House Speaker Paul Renner said last month regarding the language poised to be cut that “it was absolutely not written with Jacksonville in mind,” noting that Jacksonville’s pension is a “different deal” than what that language contemplated.
The pension reform scheme enacted last decade closed the city’s defined benefit pension plan to new entrants in 2016, but the future tax was framed as an asset to offset that debt.
Pension funds have gotten a new focus in Jacksonville in recent weeks amid the Donna Deegan administration exploring using pension fund assets to finance upcoming renovations to the Jaguars’ stadium, work that will be necessary to keep the team in town past the end of the current lease.
A representative of the administration suggests that the city could pay the pension fund back, guaranteeing a rate of return that meets pension fund benchmarks, and avoiding financing costs that would come by pursuing financing on the bond market.
Meanwhile, Truth in Accounting says that “over the last year, Jacksonville’s financial condition worsened by $984.6 million, resulting in a Taxpayer Burden of $11,200, earning it a ‘D’ grade.”
One major issue, notes the analysis, is the city’s massive pension problem.
“Jacksonville had set aside only 47 cents for every dollar of promised pension benefits and only 11 cents for every dollar of promised retiree health care benefits.”
The city “had $4.5 billion available to pay $8.1 billion worth of bills,” creating a “$3.5 billion shortfall, an increase of $984.6 million from the prior year and a burden of $11,200 per taxpayer.”
Another provision in the tax bill should help Jacksonville’s indigent care also, giving voters a chance to support UF Health with a tax.
Language in the bill will allow a county that “has a population of at least 800,000 residents and is not authorized to levy a surtax under subsection (5), may levy, pursuant to an ordinance to take effect only upon approval by a majority vote of the electors of the county voting in a referendum, a discretionary sales surtax at a rate that may not exceed 0.5 percent.”
That tax could, if approved by referendum, “fund a broad range of health care services for both indigent persons and the medically poor, including, but not limited to, primary care and preventive care as well as hospital care. The plan must also address the services to be provided by the Level I trauma center.”
8 comments
Tallahassee Insider
March 7, 2024 at 10:51 am
Is that a picture of Blaise Ingoglia calling his bookie?
John L
March 7, 2024 at 12:05 pm
So let me get this straight. Jax made all new hires ineligible for the pension program to save money and then forgot that the new money from new hires helps pay for future and current retirees checks. Gee what a surprise they are short money now. Real smart accountants there.
Tough Love
March 8, 2024 at 10:58 pm
Quoting ……. “new money from new hires helps pay for future and current retirees checks”.
That’s a common misunderstanding. In the PUBLIC Sector, because Defined Benefit (DB) Plan funding calculations are ALWAYS determined using investment earnings-rate assumptions that are too high, the TOTAL (employee plus employer) contributions for active-service workers are insufficient to fund even THEIR OWN accruals let alone contribute towards paying down any underfunded past service accruals of those already retired.
Our Gov’t shouldn’t allow this (the too-high investment earnings assumptions), and they DON’T when it comes to the funding calculation Regulations governing PRIVATE Sector Single-employer DB Plans.
Jax is addicted to billionaire welfare
March 7, 2024 at 5:26 pm
If Jax goes through with stadium financing, plus the shipyards and downtown sports district, plus all the other crap sweetheart deals they can’t even collect taxes on, they won’t just be broke they will be in a death spiral. They’re already dependent on the increasingly expensive and soon to implode municipal bonds market every year just to service existing debt. Keep giving free money to billionaires like they’re addicted to a drug. Chickens gonna come home to roost and it’s ugly. If they want to keep using taxes to pay for their drunken spending, they will further speed the middle class flight to surrounding counties with much lower tax burdens and fewer legacy costs.
MH/Duuuval
March 7, 2024 at 7:57 pm
Taxes for indigent health care — not skyboxes to be used a few times a year.
They're lying
March 8, 2024 at 4:34 pm
If I thought our taxes would actually go to medical/social services and uplift programs, I’d be happy with that. Don’t kid yourself. They unilaterally reapportioned the direction of that money once and have full authority to do so again. Now they’re using people who need medical care as a human shield for their grift, and once that funding is in place, the masks come off. Now there will be no recourse for taxpayers at all. Die is cast.
Tough Love
March 8, 2024 at 3:24 pm
if you want to TRULY address the city’s VERY poor financial problem, recognize that EVERY proposed “solution” must include very material reductions in the value of FUTURE service pension accruals (including all CURRENT as well as NEW workers), a rapid phase-out of ALL retiree healthcare benefits, and the complete elimination of ALL “DROP” Plans.
And, EVERY discussion of retirement security for Public sector workers (e.g., pensions and retiree healthcare benefits) MUST included an answer to this question ……… “Do Florida’s PRIVATE Sector workers typically get that” If not, neither should PUBLIC Sector workers.
The Taxpayers are Fed-UP with Public Sector workers/Retirees being the New Royalty …. at THEIR expense.
the Truth
March 9, 2024 at 4:21 pm
Donna Deegan is going to be a worse Mayor than Scumbag Curry.
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