Florida Gov. Rick Scott To Decide on Longer Repayment Timeline for Jacksonville Pension Liabilities

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A Florida bill, which is headed to the desk of Gov. Rick Scott, would allow Jacksonville to extend the timeline over which it is required to pay down its unfunded pension liabilities.

Florida municipalities have 30 years to pay off their pension debt; the bill would let Jacksonville go beyond that period.

The result would be less burdensome pension payments in the near-term. But the plan is more costly in the long-term.

More from the Florida Times-Union:

State law says local pension plans can spread out the payoff of their unfunded pension liabilities over a 30-year period. The bill approved by the Legislature would grant Jacksonville the ability to go “beyond the 30-year maximum period,” according to an analysis of the bill by the Department of Management Service.

In a Feb. 5 analysis of the pension bill, the department says provisions in the legislation might run counter to state law’s goal of preventing the transfer of pension costs to “future taxpayers that should reasonably be borne by current taxpayers.”

The bill gives Jacksonville two options for gaining financial benefits before the sales tax money actually starts flowing:

■ The city could take the projected sales tax revenue from 2030 through 2060 and convert into a present-day value, which would count on paper as a financial asset. As a result, the city’s required contribution to the pension plan would be less.

■ The city could borrow money and use it to help pay a portion of the annual pension cost. The city would repay the borrowed money when the pension tax begins.

In addition, Jacksonville would gain some immediate financial relief on pension costs by being able to spread the payoff beyond the 30-year maximum period that applies to pension plans in the state. Jacksonville would only be able to get the financial breathing space if voters approved the half-cent sales tax.

 

Photo credit: “Bluefl”. Licensed under Public Domain via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Bluefl.png#mediaviewer/File:Bluefl.png

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