Jacksonville's Mayor pushes to extend sales tax to cover pension debt

The voter-approved Better Jacksonville Plan half-cent sales tax will be staying on the book past its expiration date, if a new proposal from Jacksonville’s Mayor clears state and local lawmakers.

Mayor Lenny Curry outlined his plan to pay down the City's roughly $2.6 billion unfunded liability- or pension debt- in front of the Finance Committee Monday morning. The debt accounts for all of the City's pension obligations- Police and Fire, General Employees, and Corrections Officers

Curry is asking the City Council to support a proposal he will push in Tallahassee that would extend the BJP sales tax past its current 2030 sunset to allow for paying down the debt. The extension would be through 2060 or until the pension is fully funded. If it clears the State House, Senate, and Governor, it would come back to the Council for a super-majority vote, according to Curry, but not be brought back to voters.

“Many of you have seen this problem kicked down the road for many, many years, but this is the time that we have to deal with this,” Curry says.

Curry argues this is not a new tax or tax increase, because the overall sales tax rate would remain at 7%- just for a longer period of time than initially allowed under the BJP. Voters initially approved the Better Jacksonville Plan half-cent sales tax to fund a package of capital projects, including the Veterans Memorial Arena, the Duval County Courthouse, and other road projects- but with the understanding it would only be used for those capital projects.

This proposal is contingent on all new employees- including Police and Fire- agreeing to enter in to a defined contribution plan instead of a defined benefit plan. There would be no change for existing employees. The benefits clause of this proposal would have to be bargained with the respective unions, and Curry says they've had a few conversations up to this point, but have refrained from releasing many details until the proposal was completed.

He’s nonetheless confident he can get everyone involved to sign on.

“Put all the politics aside, and let’s solve this problem. This is something we can solve if we have the political courage to do it,” Curry says.

He says the pension contribution annually- including base payments and contributions to the unfunded liability- are around $200 million. That will continue to rise, because the City committed to increasing payments toward the Police and Fire Pension debt, which makes up the majority of the overall debt. The more that payment rises, the less money the City has available to pay for basic needs, like hiring more police to address crime in the City.

“This [the pension debt] is strangling and crippling our ability to do that,” Curry says.

He says the proposal would mean an immediate reduction in the unfunded liability, creating cash flow for City services. WOKV requested more information about the funding mechanisms- how this money would be created by a long term tax extension- but we were told the information is still being finalized and not yet available. The specific legislation the Mayor plans to file is also not yet available, but we were told that should come by Friday.

The Jacksonville Association of Firefighters Local 122 and Fraternal Order of Police Lodge 5-30 released a joint statement saying they have received the Mayor's proposal and will not be commenting until they've had time to review it. The statement further says, however, that both parties have a history of working with the City to address pension issues.

Curry says he will tap every relationship he has with the State to push this through and asked Council to do the same. The proposal is actually intended to serve as a precedent for other communities who may find themselves in similar situations.