Duval County residents will vote this year on sales tax for pension costs

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Duval County voters will vote this year on a half-cent sales tax for paying down the city’s massive pension debt — an election that will certainly happen after Gov. Rick Scott signed legislation Friday giving residents that choice at the ballot box.

Whether the referendum would be Aug. 30 or Nov. 8 remains undecided. But Jacksonville City Council members previously went on record in support of Mayor Lenny Curry’s all-out push to win support from state leaders for the sales-tax option, so it’s only a matter of when, not if, council members put the measure on the ballot.

It will be the first time Duval County voters have gone to the polls on a sales-tax referendum since they approved the $2.2 billion Better Jacksonville Plan in 2000.

Soon after Scott signed the authorizing legislation, Curry stepped to the podium at City Hall and previewed the themes that voters will hear in the run-up to election day.

“This is about solving a financial crisis that is on the verge and on the brink of destroying the future of the city of Jacksonville,” Curry said. “I am going to speak the truth to the voters, and I believe they are ready to hear the truth and they will follow me down this path.”

The city’s pension debt for its three plans — police and fire, general employees, and corrections officers — totals $2.87 billion. This year, the city is contributing about $260 million to the pension plans. Curry said the contribution amount is on track to keep going up, and that is strangling the city’s budget.

He raised the spectre of Detroit’s decline, saying that comparison is “not over-the-top language. We are in fact heading that direction. This is about solving that problem once and for all so Jacksonville is fiscally sound and can be a prosperous, flourishing city in the future.”

If approved by voters, the new sales tax would not take effect until after the current half-cent Better Jacksonville Plan’s sales tax expires in 2030. The replacement of the Better Jacksonville Plan sales tax means the overall state and local sales tax would remain at 7 cents in Duval County.

Curry said it would not be a tax increase. He described it as an extension and re-purposing of the Better Jacksonville Plan tax.

Part of Curry’s pitch for enacting the pension tax involves using the guarantee of future sales tax revenue as a way to free up tens of millions of dollars now going to pay down the city’s pension debt. Doing so would allow that money to go for other needs that have been forced to the sidelines by pension expenses.

Curry said he would be sharing more information with voters about the financial aspects of the plan. But in contrast to the campaign in 2000 for the Better Jacksonville Plan, which was built around a long list of eye-catching projects that would be built with the sales tax, Curry’s message is focused far more on the downside of what he says would happen if Jacksonville cannot get pension debt under control.

“This isn’t about creating some source of tax revenue so we can go out and spend more taxpayer dollars,” Curry said. “This isn’t about gifts under the Christmas tree.”

Duval County voters have twice voted to enact a local-option sales tax. A half-cent sales tax approved in the late 1980s eliminated tolls on several Jacksonville expressways and bridges. That tax has no expiration date and is used for road-building and transit service.

In 2000, voters enacted Better Jacksonville Plan half-cent tax, which will end in 2030.

The proposed pension tax would expire no later than Dec. 31, 2060.

If voters approved the pension tax, several others boxes still would have to be checked off.

As a condition for being able to actually levy the tax, the city must increase the amount that employees pay to at least 10 percent of their paychecks. The city already has an agreement in place to phase in that increase to 10 percent for all police and firefighters, but the amount now is 8 percent for general employees and corrections officers.

The city will close all three of its current pension plans to any new hires if voters approve the half-cent sales tax. Curry said that will shut the door on pension problems biting future city leaders. For new hires, options would be moving them into 401(k)-style plans, trying to get them into the Florida Retirement System, or creating brand-new pension plans for them.

Jacksonville Association of Fire Fighters President Randy Wyse, who lent key support to Curry’s lobbying in Tallahassee for the pension legislation, said the union won’t agree to 401(k) plans for future firefighters because that would put Jacksonville at a disadvantage when competing with cities that offer pensions to public safety workers.

“It would decimate recruiting and retention,” Wyse said. “You would just have a revolving door. That’s been proven all over the country.”

Curry said he will actively hit the speaking circuit to tout the merits of the sales tax, and he expects the business community will give private donations to run a marketing campaign.

State Rep. Travis Cummings, who sponsored the pension legislation in the House, said it will be a “challenging effort” to win voter support, but he noted that it was a heavy lift to get the bill through the Legislature and signed by Scott.

“I think if the mayor and his team and the business community can be as effective with the voters of Jacksonville, then I think it has a great chance to pass,” Cummings said.

David Bauerlein: (904) 359-4581

http://jacksonville.com/news/metro/2016-03-25/story/duval-county-residents-will-vote-year-sales-tax-pension-costs#