Mayor Addresses City Council on Pension Solution
April 27, 2016
At the April 26 meeting of the Jacksonville City Council, Mayor Lenny Curry asked Council to support legislation (
2016-300) to put his pension solution on the August 30 ballot for a referendum vote. The legislation is the next step in his administration’s efforts to address the challenges and limitations the City’s crippling pension debt is creating for citizens and communities throughout Jacksonville. At the meeting, all present City Council members signed on as co-sponsors to the bill.
"City services are being crippled by this crushing pension debt," said Mayor Curry. "Nearly 30 percent of the City's operating budget is going toward pension costs. That means that 30 percent of citizen's taxes are not going to services they care about, such as hiring more police officers, taking care of roads and infrastrucutre, or maintaining city parks. This solution will provide a funding source and reforms so that Jacksonville can finally be a city without a pension problem and have a prosperous future."
The legislation includes referendum language that requests voters to adopt the following which reads:
“Permanently closing up to three of the City’s underfunded defined benefit retirement plans, increasing the employee contribution for those plans to a minimum of 10 percent, and ending the Better Jacksonville half-cent sales tax are all required to adopt a half-cent sales tax solely dedicated to reducing the City’s unfunded pension liability. Shall such pension liability sales tax, which ends upon elimination of the unfunded pension liability or in 30 years maximum, be adopted?”
Once adopted and collective bargaining is completed, the City of Jacksonville will file an implementing ordinance for City Council to approve the collective bargaining agreement and details about the discretionary sales surtax dedicated to only paying unfunded pension liability.
Jacksonville currently owns 25 percent of the total unfunded pension liability of more than 400 cities and counties throughout the state, paying more than $260 million for its three public pension funds. The City contribution to the three pension funds is about 25 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 Employees 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 $2.6 billion.
With support from bill sponsors Senators Rob Bradley and Aaron Bean and their House partners, Representatives Travis Cummings and Lake Ray, state legislation provides municipal governments with the ability to extend existing surtax revenue to address pension liability under circumstances that demonstrate a serious potential for financial difficulty. Approval by the Florida House of Representatives was secured Feb. 24, and by the Senate March 9. Governor Scott signed the bill March 25.