Former Jacksonville Mayor Calls for Tax Increase to Fund Pension Reform

Former Jacksonville mayor and current city Chamber president John Delaney said Monday that a tax increase is likely the best way to fund the city’s pension reform measure.

The city has been weighing a pension reform bill for months, and one of the points of debate has been the source of funding for the measure. Current Mayor Alvin Brown’s plan was to team with a public utility company and borrow the money.

But Delaney says a tax increase is more likely.

From the Florida Times-Union:

JAX Chamber Chairman John Delaney said Monday a pension financing plan supported by Mayor Alvin Brown is “not viable” and the solution “probably is going to be a tax increase to solve that problem.”

[…]

In regard to pension reform, Brown favors a plan for the city and JEA to borrow $240 million to more quickly pay down the city’s $1.62 billion debt to the Police and Fire Pension Fund.

JEA would pay off its $120 million in borrowing by getting reductions in the amount it pays in annual contributions to City Hall. The city would repay its $120 million by using savings from its annual pension contributions to the Police and Fire Pension Fund, along with projected growth in tax revenues from an improving economy.

[…]

But Delaney said City Hall already is financially strained in paying the day-to-day costs of city services, so reductions in future JEA revenue would hurt the city. He said the same financial constraints affect the city’s ability to borrow $120 million and repay it.

He said to “dig out of the pension hole, it’s going to take a new independent slug of money, which ultimately probably is going to have to be a tax increase to solve that problem.”

Read more Pension360 coverage of the Jacksonville pension reform saga here.

Photo by  pshab via Flickr CC License