Jacksonville Mayor Pushing Sales Tax to Boost Pension Funding

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Jacksonville Mayor Mayor Lenny Curry last week proposed levying a half-cent sales tax, with the resulting revenue to be used strictly for paying the city’s pension contributions.

The measure would have to be approved by voters in a citywide referendum.

Details of the proposal, from the Florida Times-Union:

The sales tax would run from 2030 to 2060 and provide a dedicated funding source strictly for paying off the city’s pension debt for its three plans — police and fire, general employees, and corrections officers.

From 2030 to 2060, the half-cent sales tax would collect a total of about $8.5 billion, according to financial projections by the city.

The pension bill filed in the Legislature would put requirements in state law for how actuarial reports — which assess the financial health of pension plans and calculate the city’s annual contribution — would treat those sales tax collections.

The actuary would take the total amount of projected sales tax collected over the future 30-year period and determine what it would be worth to the pension plan in today’s dollars. That present-day value then would be used as an asset for accounting purposes in determining the city’s annual financial payments to the pension fund.

For instance, if the present-day value of the future sales tax collections were $1.5 billion, that would count toward substantially bringing down the city’s $2.7 billion pension debt for its three pension plans — police and fire, general employees, and corrections officers. Because the debt would be less, the city’s annual cost of paying off that unfunded liability also would be lower.

City voters previously approved sales tax hikes in 1988 and 2000.

 

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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