Task force recommends tax hike to fund pensions

Voters may be asked if they prefer sales tax

Author: Scott Johnson, General assignment reporter, sjohnson@wjxt.com
Tarik Minor, Anchor-reporter, tminor@wjxt.com
News4Jax.com Staff, webteam@wjxt.com
Published On: Feb 24 2014 04:21:50 AM EST   Updated On: Feb 25 2014 06:20:00 PM EST
Tax hike recommendation for pension problems
JACKSONVILLE, Fla. -

A retirement task force voted Monday to recommend to City Council a tax increase to fund a $1.7 billion liability to the Police and Fire Pension Fund.  While it likely would be a 1.5 mill property take hike -- about $75 for a homesteaded $100,000 home -- voters may be asked in November if they would prefer a sales tax.

A sales tax increase would generate about $68 million a year.

"Either way, people are paying for the decisions that were made that increased this $1.7-billion liability that we can't kick down the road," said Bill Scheu, a pension task force chairman.

The Jacksonville Retirement Reform Task, which has been meeting since last fall, took the option of budget cuts off the table as they began Monday's meeting, saying it would have too much impact on community services.

Mayor Alvin Brown has proposed that JEA contribute $40 million per year to fund the city's delinquent pension contributions -- an idea that had a lukewarm reception at the city-owned utility.

The panel did not endorse the JEA contribution idea, but last week, the force did approve increasing city employees' contributions to pension plans.

"They've endorsed ways and recommendations for the city to improve the benefit structure for employees, both current and new employees going forward," said David DeCamp, spokesman for Mayor Brown. "Now we see improvement on the funding front."

The task force also recommended that current and former city employees receive the benefit packages they were promised.

"The mayor's proposal on JEA was to do an enhanced contribution: find savings for the utility but in no way raise rates or taxes on our hard working taxpayers," said Decamp.

Scheu spoke about the task force's recommendations and what the City Council may do with them.

"We've said this is a complete package," he said. "If they won't agree, then I suppose we go back to litigation and we fight it out. And that's where we are. So we think ... they want to work together with the community to solve the problem. So I'll take them in good faith that that's what they will do."

Last week, Sheriff John Rutherford and Fire Chief Martin Senterfitt outlined their concerns about inadequately funding the city's pension obligations, saying it is leading to a recruiting problem for their departments.

In a poll the University of North Florida conducted, 73 percent of Duval County residents opposed JEA increasing its city contribution to help pay for pensions, but 56 percent were opposed to even a small increase in property taxes to increase pension funding.

The only proposals to reduce the pension debt that did get support of the majority of those polls were to: 1) require current employees to pay more into the pension system (62 percent), 2) require future employees to pay more (70 percent), and 3) require future public safety employees to work longer before they become eligible to receive pension benefits (51 percent).

The retirement task force will have one more meeting next Thursday. Their next step will be sending their proposal to city council who will have to approve the tax hike. Then, if they go with the task force's recommendation, it will be put on the ballot for the voters to determine whether it winds up a sales tax or a property tax hike.