On October 24, 2017, City Council voted down bill 2017-483 by a 12-5 vote, regarding Council Member Becton’s Extra Contribution Pension Payments. Cynics and sore losers may contend that City Council is where good ideas go to die, not so stated, District 11 City Council Member Danny Becton. Although he saw his bill go down in defeat, he laments that his extra contribution pension bill was definitely the right thing to do, however the will of the Council was not there and certainly lacked fiscal conservatives on hand to help move it forward.
CM Becton has long applauded Mayor Lenny Curry’s plan to pay for future pension debt by extending the Better Jacksonville Plan (BJP) half-cent sales tax after its 2031 expiration date to be used to help fund the pension debt. However, in his view, as passed, the city doesn’t make major additional contributions to the fund for the next 13 years but pays a “minimum payment” based on new actuarial analysis. These minimum payments along with the delayed payments from the ½ penny will add considerable interest expense to the unfunded liability. Future generations are looking at having a debt in excess of over $10 billion dollars to deal with and the sales tax will only fund approximately $4 billion of that debt. The rest, $6 billion will have to be funded by the general fund by our kids and grandkids.
“The number one concern that I received as a Council Member is that we, current taxpayers are not paying our fair-share and are kicking the can down the road to our children for them to pay this enormous debt in the future”, explained CM Becton. “No one likes the idea of raising taxes but as revenue in the future grows, the responsible thing to do is to take part of those increased revenues and help pay down our debt.”
CM Becton’s bill called for using a small portion, up to 15 percent of revenue growth for which growth occurs each year to be used for those extra payment calculations. By doing this today, it was estimated that we could help pay on this debt in the amount of over $350 million dollars by 2031.
Council Member Becton’s final remarks prior to the vote are as follows:
“I have shared what I feel is an overabundance of evidence that there is a looming financial issue down the road for our city.
Moody’s, Bloomberg and also PEW has expressed the same sentiments.
Beginning in 2031, this city is forecasted to see a $10 Billion, Unfunded Liability. $4 Billion paid by a Sales Tax; $6 Billion paid by the future Taxpayers thru the General Fund.
It could be said that this is “Smart Fiscal Policy” to help pay that debt. To help a future generation that will be our kids.
As for concerns of future needs and revenue, life responsibilities are about paying your debts and prioritizing your wants, these are decisions of everyday life.
I would welcome your support of this bill.”
2017-348 Moodys Report - Jacksonville FL Pension Reforms Finalized 05-17
2017-348 PEW Report - Analysis of PFPF Contribution Policy
2017-348 PEW Full Analysis of PFPF Pension Debt and Forecast 10-16
2017-348 White Paper from CM Becton 10-17
Point of View - Lets Pay Pension Debt Early
2017-348 GC-#1156115-v2-2017-348_Becton_Sub - Redline
2017-348 The Vote 10-24
Council Members Supporting the Bill: Becton, Brown K, Dennis, Newby, and Brosche
Council Members Voting Against: Anderson, Carter, Gaffney R, Love, Bowman, Crescimbeni, Gulliford, Morgan, Boyer, Ferraro, Hazouri, and Wilson
Posted on Tue, October 24, 2017
by Carol D'Onofrio