Mayor Curry discussing his pension solution with City Employees during a town hall meeting at City Hall - St. James BuildingOn August 30, the voters approved Mayor Lenny Curry's solution to solve one of the biggest issues in Jacksonville’s history. An overwhelming majority voted yes on County Referendum #1, affording us the opportunity to solve our $2.7 billion pension crisis. The voters recognized that annual pension costs, approaching $300 million a year, are unsustainable.
 
As owners of 25 percent of the total unfunded pension liability of the more than 400 cities and counties throughout the state, the City of Jacksonville is paying an additional $160 million a year above its normal pension contribution for its three public pension funds.

The City contribution to the three pension funds is nearly 20 percent of the City’s operating budget.
  • The Police & Fire Pension Fund is currently at a 46 percent funded level with an unfunded liability of over $1.6 billion;
  • The General Employee Pension Fund is at a 60 percent funded level with an unfunded liability of approximately $910 million;
  • and the Corrections Officers’ Pension Fund is at a 48 percent funded level with an unfunded liability of over $120 million. 
The total of the unfunded liabilities of the three public pension funds is more than $2.7 billion. As a result, the City is seeking an immediate solution to avoid being plunged into a financial crisis, very similarly to the City of Detroit, that would eliminate services, reduce quality of life offerings, and shut down City operations. 

The solution proposed by Mayor Curry, and approved by Jacksonville voters, does not increase the burden on taxpayers or raise the current ad valorem rate. It affords Jacksonville the opportunity to extend an already approved surtax that has a sunset date of 2030 to continue for the sole purpose of addressing the unfunded liabilities of the City’s three funds. While the City of Jacksonville would continue to use operating funds to annually contribute to its normal pension costs, the extended surtax would sunset when the City of Jacksonville’s pension funds are fully funded or 2060, whichever comes first.
 
Now that collective bargaining has been completed with employee unions, the agreement now goes before the Jacksonville City Council for approval. Mayor Curry empowered his team of negotiators to propose a solution that will put this issue behind us and empowers the Jacksonville community to resolve its long-term pension liability challenge, contributing to greater opportunities for improvements in public safety, youth services, neighborhoods and economic development.

Taking the Next Step on Pension

City Council members watch Mayor Curry's presentation on pension reform legislation during a workshop on April 6, 2017.Now that employee unions have approved the proposals negotiated with the Mayor's team, the agreements head to City Council for approval. Mayor Curry presented the legislation to City Council on April 6, 2017. The solution the mayor's negotiating team presented empowers Jacksonville to resolve our city’s long-term pension liability challenge, contributing to greater opportunities for improvements in public safety, youth services, neighborhoods and economic development. The plans recognize the inherent dangers of public safety employees, and the concerns and needs of surviving loved ones. It is designed to also recruit and retain the highest quality public safety employees, and secure our city’s long-term fiscal stability by solving our unfunded pension liability for good.

To learn more about collective bargaining negotiations and the City's proposal to employee unions, visit the Pension Progress page.

Frequently Asked Questions

How dire is Jacksonville’s pension situation? Why do we need to address this now?
Jacksonville owns 25 percent of the total unfunded pension liability among the more than 400 cities and counties throughout Florida.
 
This year, the City is paying $260 million to our three public pension funds. The proposed budget has the City paying $292 million next budget year, and the contribution is expected to rise to $300 million the year after that.
 
In total, the City’s contributions to the 3 pension funds represent nearly 30 percent of its total operating budget.
 
How does this address the pension issue?
The solution Mayor Curry has proposed dedicates a funding source to pay pension debts – eliminating this issue once and for all.
 
This solution does not add any additional tax burden. It does not raise taxes or the ad valorem rate, and keeps the sales tax at 7 percent.
 
It closes current plans for new employees, in favor of retirement plans that reflect current market practices, and increases employee retirement contributions to 10 percent. Learn more about collective bargaining negotiations
 
This proposal empowers the City to resolve its long-term pension challenge, and contribute to better investments in public safety, youth services, neighborhoods and economic development opportunities.
 
Revenues from the half-penny sales tax can only be used to pay down pension debt, and the tax will end when the plans are 100 percent funded or by 2060, whichever comes first. Current estimates show that the plans could be fully funded shortly after 2045.
 
What changes can city employees expect?
Employee retirement contributions will rise to 10 percent, which will be negotiated in collective bargaining.
 
Also under the proposal, the current plans will be closed to new employees, in favor of retirement plans that reflect current market practices that will be collectively bargained with employee unions.
 
These changes will help the city address its pension liability burden – which is consuming nearly 30 percent of the operating budget – and allows the City to better address key priorities and services that improve the lives of Jacksonville residents. Learn more about collective bargaining negotiations and the mayor's proposals for City employees
 
Where will savings be invested from this pension solution?
This solution is about solving a long-standing community problem and securing the City’s financial future. The mayor is not committing any potential savings from this solution to funding requests from any constituent group.
 
What this solution allows the City to do is to solve a long-standing issue, secure Jacksonville’s financial future, and better direct available funds toward service and offerings the city should be providing its citizens that that it cannot afford now.
 
Will there be further reductions to retirement benefits for City employees?
As part of this solution, current employees will be required to increase their retirement contributions to 10 percent.
 
Any further changes to employee benefits will need to be collectively bargained with employee unions. The mayor is committed to ensuring that benefits are reflective of market conditions, attract quality talent, and respect taxpayers.
 
These negotiations will be held in the sunshine. Learn more about collective bargaining negotiations and the mayor's proposals for City employees
 
How do we know this won’t happen again?
The City is facing this problem today because these plans were not properly funded in the past. With this solution, the funds from this surtax can legally only be used to pay down pension debt – they cannot be used for any other purpose. And once those plans are fully funded, the tax ends.
 
Additionally, this plan closes the pension plans that contributed to this situation to new hires. This solution solves the problem once and for all.
 
How does a tax starting in 2030 benefit us today?
This solution dedicates a funding source for benefits owed in out years, which will drive savings for the City today. New actuarial projections are showing that with this plan, the City could see around $50 million in budget relief.

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