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Jacksonville enters final phase of latest pension reform efforts

Jacksonville, FL — Jacksonville is now officially poised to access a half-cent sales tax you approved to pay down the more than $2.8 billion pension debt, while closing out pensions and making wage and benefit changes for local unions.

A slew of bills has been filed in front of the Jacksonville City Council, including legislation that approves tentative agreements with the Fraternal Order of Police Lodge 5-30, Jacksonville Association of Fire Fighters Local 122, Communication Workers of America, AFSCME, Jacksonville Supervisors Association, and Northeast Florida Public Employees' Local 630 LIUNA. A bill formally levying the half-cent sales tax to pay the unfunded liability, or pension debt, has also been introduced.

A special Council “Committee of the Whole” meeting has already been scheduled for April 19 to review all of this legislation. Council approval is the final step needed in the process.

WOKV has told you in recent weeks that the police and fire union membership- which make up the majority of the debt- approved the tentative agreement that resulted from collective bargaining with the City's team. There is an increase in pay and restoration of benefits cut under a 2015 reform plan for existing members, while new hires are moved to a 401(k) style plan instead of a traditional pension.

Closing the traditional pension plans was key in this ongoing process from the City's perspective, because it was a needed move in order to tap in to the voter-approved sales tax. That tax would take effect upon the expiration of the Better Jacksonville Plan half-cent tax for capital improvement projects in 2030, and last for up to 30 years or until the defined benefit plans are fully funded. Voters approved the tax last year, after the concept was authorized at the state level.

Since Jacksonville Mayor Lenny Curry and his team first started pitching this plan, it has been with the promise that generating this future sales tax revenue would result in immediate budget relief- possibly tens of millions of dollars. The bill text spells out some of the funding mechanism, saying the sales tax revenue would be “actuarially recognized” and applied to the employer contribution as early as the upcoming fiscal year.

Some financial questions still remain, and are expected to be aired out as the Council begins its review. One question is exactly how much the benefit changes in the tentative agreement will cost the City. Another is how much money will be added to the total paydown by using this financial mechanism to provide short term relief and shift the large burden in to the future.

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