Mayor John Peyton announced today that while the national economic downturn has negatively affected the city's revenue streams that support infrastructure investments, the City of Jacksonville plans to continue moving forward with $100 million in new roadway construction projects. This investment will come in addition to the approximately $250 million in Better Jacksonville Plan roadway projects that are currently under construction or in design.
Despite significant declines in sales tax revenue generated by the two half-cent sales taxes that support transportation infrastructure investments, Peyton announced that the city will continue to invest in building roadways, ensuring forward progress on projects and serving as a financial stimulus for Jacksonville's residents. As a result of the lower revenue, however, the investments will not be at the pace originally anticipated when the Better Jacksonville Plan was passed in 2000.
'The current economic climate is having a significant impact on the city's finances, just as it is on families, businesses and governments across this nation,' said Mayor Peyton. 'No one could have predicted the economic difficulties that this country has faced during the past year or prepared for the impact it would have on the Better Jacksonville Plan. I believe, however, that it is part of government's role to make sure that we meet our obligations to residents and to make prudent investments to ensure that we help the people of this community continue to work.
'Infrastructure investments make good business sense. In fact, it is estimated that the $100 million we will invest in new projects will have an economic benefit on our community of more than half a billion dollars and will support the employment of thousands within our city at a time when it is desperately needed,' said Peyton.
Another important element of the plan announced by Mayor Peyton today is an effort to ensure that as many of the taxpayers' dollars as possible go to support local businesses and help employ Jacksonville residents. Toward that end, Peyton asked the city's procurement department to determine what actions can be taken, within existing state and federal laws related to interstate commerce, to give additional consideration in the construction award process to local contractors.
Also joining Mayor Peyton today were leaders of other local public agencies and authorities. Together, these government organizations are committed to finding ways to continue funding projects that can serve as an economic stimulus during these difficult economic times by investing more than $1.8 billion in infrastructure during the next three years. The U.S. Department of Transportation estimates that an investment of this amount could support the employment of more than 34,000 people in construction, and its supporting and induced industries.
'I am tremendously proud of the cooperation and partnership among the leaders of our government agencies and authorities to keep work flowing in this community during this challenging economic time,' said Peyton. 'In particular, the leaders of the JTA, our partners in the Better Jacksonville Plan, have been extremely helpful as we worked together to create a plan to ensure that we do not have to cancel any road projects planned as part of BJP.'
Plan for Continued Investment
Funding for the Better Jacksonville Plan and associated roadway projects is primarily supported by two, separate half-cent sales taxes. The first transportation half-cent sales tax was approved by voters in 1988 concurrent with the elimination of the city's roadway tolls. The Better Jacksonville Plan half-cent sales tax was approved by voter referendum in 2000.
In fiscal years 2007 and 2008, revenue from these two taxes was down on a year-over-year basis and fell well below the projections. In the current fiscal year, revenue is expected to be down even more significantly, falling potentially more than $30 million short of the plan's original projection.
Rather than stop work on all new projects because of the considerable revenue declines, Peyton has proposed a plan to continue responsible investment in projects.
To fund these additional projects, he will ask the Jacksonville City Council to support the extension of the Local Option Gas Tax (LOGT) past its 2016 expiration date. This action would simply be an extension of the expiration date and would not impact the rate of the assessment currently or in the future. The LOGT is a tax assessed at $0.06 on each gallon of gasoline sold.
In addition, Peyton will ask the city council and the board of the Jacksonville Transportation Authority (JTA) to support a reset of the city's subsidy of JTA's operations. As a result of an interlocal agreement signed with the JTA in 2000, the city provides the independent authority an annual operational subsidy from the proceeds of the half-cent transportation sales tax approved by voters in 1988. The contract also stipulates that the amount provided to JTA will increase by approximately 6.5 percent each year. The proposed plan would adjust the annual rate increase from approximately 6.5 percent to a rate that is reflective of the actual performance of the sales tax revenue.
The approval of these two items will immediately give the city access to $50 million, allowing the city to continue moving forward with additional roadway projects anticipated as part of the Better Jacksonville Plan.
In addition, Mayor Peyton will also ask the city council to amend the city's current Capital Improvement Plan, allocating $50 million to support Phase One of the necessary roadway infrastructure investment in and around JAXPORT.
'It's clear that port activities are the most viable way to expand our local economy. But the port doesn't exist in a vacuum and we must make investments in the infrastructure in the area to ensure that business and the residents can co-exist,' said Peyton. 'What this plan will do is allow us to begin immediately making necessary enhancements to ensure our roadways are ready to handle the increased port cargo expected in the next few years.'
Despite these investments, however, a number of infrastructure needs will continue to exist in the community. To begin addressing additional roadway project issues, Mayor Peyton is also proposing the following:
• Creation of a community-wide prioritized project list to present to congressional leaders for potential funding under the Federal Infrastructure Stimulus Package – have identified approximately $700 million in projects that may qualify for inclusion in the package
• Reprioritization of remaining Better Jacksonville Plan roadway projects to fund local road projects ahead of state road obligations
• Plan for additional issuance of Better Jacksonville Plan debt in 2011 after stabilization in bond market
• Utilization of available cash beginning in 2012 to fund remaining projects