Jacksonville FL (June 5, 2017) Councilman Becton presented his Pension “Extra Contribution” Bill 2017–348 to nine fellow council members, media and constituents at a luncheon at City Hall. As Becton explained, his bill would commit the idea of an “annual” payment for an “extra contribution” based on 15% percent of future revenues that the city will receive as compared to the 2016-2017 baseline amount of $1,088,466,862. This annual extra contribution would be paid each year on growing revenues only, prior to those funds being allocated to new projects or expensed to the growth and cost of government. This annual extra contribution payment would end upon the sales tax being implemented in 2031.
Over the next 13 years, revenue projected by the administration using a 3% growth model ends with the city receiving annually, $1,598,450,283. As stated by CFO, Mike Weinstein, when questioned by CM Becton as to the probably of that estimate, Weinstein noted that it was a very conservative estimate. Property taxes in 2017-2018 are estimated to be trending much higher making our $32 million amount, already low. Becton noted in his presentation that City Revenue between 2000 and 2016 increased an average of 3.38%, even with the awful years that we endured.
As monies are raised through increased property values, state sales taxes, JEA franchise fees and all other sources of revenue the city receives to augment pension fund payments during the next 13 years, this bill will only take from future increases without having to raise millage rates and will reduce the funding responsibility future generations will face.
“It is projected that over $5.9 Billion dollars will be spent by taxpayers during 2031 – 2049, the projected payoff date, on the pension liability out of the general revenue. That is a straggling amount considering current taxpayers will only pay in approximately $1.41 Billion between now and 2030.” Becton added.
“Our generation is not considering the possible financial hurdles future generations may face in these requirements, either” CM Becton explained. “Any unforeseen financial crisis will exacerbate our children and grandchildren’s future by placing this burden and creating even greater stress on taxpayer finances up to 2050 and possibly beyond.”
“By making additional pension payments now, the cost and time frame of funding the pension could be cut considerably when compared to doing nothing and saddling future taxpayers with a multi-billion dollar pension bill caused by interest accrued from now until 2030. It would improve our credit rating reducing current and future borrowing costs and just like any payroll deduction that we all take for retirement, if it’s taken out first before we have a chance to spend it, we’ll never miss it.”
“For example, let’s say that for fiscal year 2017-18 the city has $40 million additional dollars compared to fiscal year 2016-2017. That would provide $6 million to be paid to the pension fund and create a recurrence for the remaining years. The next year, let’s say there’s an additional $30 million, now $4.5 million more can be paid and again create a recurrence for the remaining years now totaling $10.5 million for the 2018-19 payment. This extra annual general fund payment will increase or decrease based on year after year growth of new money provided because of the city’s financial success. This would continue until fiscal year 2029-30 when the half-cent sales tax would become the funding source as a replacement.”
CM Becton’s bill takes a fiscally responsible approach to attacking pension costs. It partners with Mayor Curry’s historic reformed retirement plan and provides another funding source to allow the pension burden to be addressed in a more equitable fashion by current and future Jacksonville taxpayers.
To help, it is encourage that all taxpayers contact your district council person and voice your support for Bill 2017-348 as it goes through the legislative process and final council vote.
It is “unthinkable” that we could take in $500 – $600 million dollars in 2030 and not make one nickel contribution to help the future generation with this debt. If we do not do this now, do you think we will do this later? Becton asked.
Please contact all Council Members below to show your support and if you have any further questions, please do not hesitate to contact CM Becton as well with any questions or comments.
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