Jacksonville pension debt

Jacksonville Voters Could Decide Fate of Sales Tax to Fund Pension Debt

A Jacksonville city councilman has moved forward with the idea of levying a sales tax to help fund the city’s Police and Fire Pension Fund.

The tax would have to be passed by voters, and could appear on the May ballot.

From WOKV:

Councilman Bill Gulliford has filed a bill which would allow a sales tax option to get on to the May ballot. The tax can’t be specifically earmarked for the pension debt, but rather it is for fire services. The intent behind the action is to use the tax as revenue for fire services and then take the money in the budget that would have been used for that and dedicate it toward the pension debt pay down.

Unfortunately, the process has another hitch still.

By state law, any new sales tax is offset by a change in the property tax. So, in order to actually generate revenue from the new sales tax, the City Council would have to vote to raise the property tax rate, but again that would drop back down when the sales tax takes effect.

Jacksonville Mayor Alvin Brown has repeatedly said he opposes any tax increases, so it’s unclear if he will move to veto the measure.

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Jacksonville Mayoral Candidate Wants to Use Sales Tax to Pay Down Pension Debt

Bill Bishop, a candidate for mayor of Jacksonville, this week addressed one of the city’s hottest topics: pension debt and reform.

Bishop said he would levy a sales tax increase and use the revenue to pay down the city’s pension debt.

From the Florida Times-Union:

City Councilman Bill Bishop, who is running for mayor, said Monday during a forum hosted by the Meninak Club of Jacksonville that putting a half-cent sales tax on the ballot would be the best way to shore up the finances of Jacksonville’s pension system.

[…]

Bishop said the economy is recovering so tax revenue is increasing, but not fast enough for growth to solve the city’s financial problems. He said a sales tax spreads the cost widely among residents as well as those who come into Duval County for shopping.

A half-cent sales tax would generate about $63 million and it would come with an expiration date if voters approved it. But state law currently doesn’t allow a sales tax geared specifically toward paying down pension debt. State lawmakers have been cool to the idea so there’s nothing in the works to schedule an election.

Jacksonville has been grapping for months with a way to pay for a proposed increase in pension contributions to the tune of $400 million over the next 10 years.

The city is trying to get out in front of its pension debt, to keep costs from spiraling further.

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Pension Board to Cast Final Vote on Florida Reforms

The board of Jacksonville’s Police and Fire Pension Fund will vote Monday on a pension reform measure that would improve its funding status but also affect member benefits.

The measure was passed by the City Council in early December. More from the Jacksonville Business Journal:

The final status of the pension reform package, which calls for a mix of surging money into the pension fund and cutting benefits, rests with the board, who can either reject it altogether, elect to modify it or accept it.

Rejecting it would kill the legislation, while modifying it would mean that City Council would have to agree to changes proposed by the board.

The city’s latest estimates of the savings the pension reform legislation could bring come to about $1.33 billion over 30 years.

The legislation’s approval, however, will mean nothing unless the city decides how to pay off the $1.6 billion in debt it already owes the pension fund. Some of the suggestions by the city include infusing $300 million to the fund by increasing its and JEA’s annual contribution to the pension fund.

Pension360 will track the outcome of the vote.

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Jacksonville Will Vote On Pension Reform Measure This Week

After months of debate, the Jacksonville City Council could approve this week a measure to reduce the city’s pension debt.

Observers say the measure, which would increase city pension contributions, change retiree COLAS and give the Council the right to change benefits, has the votes needed to pass through the Council.

From the Florida Times-Union:

The full council will meet Tuesday and could take a vote on the legislation.

Thirteen council members — more than a necessary majority for passage — voted last week in favor of the bill during two committee meetings after making several changes they said make the agreement a financially better deal for taxpayers.

After years of failed attempts to reform the police and fire pension and reduce the city’s $1.65 billion debt obligation to it, council members appear close to passing a bill that Brown’s administration says will save the city $1.2 billion over a 30-year period.

“I suspect there will be limited discussion on it, and I suspect the vote will be significantly in favor, maybe even an unanimous vote,” said Councilman John Crescimbeni.

If the Council passes the bill, it will still need to be approved by the Police and Fire Pension Fund Board. There’s no guarantee they will accept the deal. From the Florida Times-Union:

The pension fund board is composed of five members. The police and firefighters union each appoint one member, the City Council appoints two members and the fifth member is chosen by the four other members.

Whether the board members pass the bill remains a major question, because it includes some significant differences from Brown’s original legislation that they supported.

Council amendments include changes to guaranteed annual cost-of-living adjustments that current police and firefighters will receive to their pensions and interest rates earned in their Deferred Retirement Option Program accounts. The council would also retain the power to impose pension benefit changes in three years if future collective bargaining talks reach an impasse.

When Brown negotiated his deal with the pension fund earlier this year, pension board members nixed the concepts now included in the council’s changes.

Officials from the mayor office told the council last month that any changes made to the deal could effectively kill it.

The reform measure would increase city contributions to the pension system by $40 million per year for the next 10 years. It would also change the way COLAs are calculated and would give the Council the right to change worker benefits for the next three years.

Photo by pshab via Flickr CC License