1. News

Mayor preaches Jacksonville peril

Jacksonville Mayor Lenny Curry is pushing a sales tax to help pay down the city’s $2.8 billion pension debt.
Jacksonville Mayor Lenny Curry is pushing a sales tax to help pay down the city’s $2.8 billion pension debt.
Published Jun. 13, 2016

Jacksonville Mayor Lenny Curry has used nothing short of End-of-Days prophesying in his push for voters to support a first-of-its kind sales tax to help pay down the city's $2.8 billion pension debt — even invoking the specter of large-scale municipal failure akin to Detroit's 2013 bankruptcy.

"We are dealing with a crisis situation in our city right now," Curry said the day he announced his plan in January. "Look, the sky really is falling."

But economic data, city budget numbers and outside analysis of the city's financial condition muddy the fateful choice Curry created for voters on the Aug. 30 ballot.

He says his plan — a half-cent sales tax that would begin in 2030 and would pay off the city's pension debt over time — will alleviate a burden that has left the city "on the cusp of falling off a financial cliff."

There is little empirical evidence to suggest the city is on the brink of financial disaster or that the local economy suffers from widespread systemic problems that could lead to a Detroit-like meltdown, no matter what voters decide this summer.

It is undeniable that Jacksonville's climbing annual pension costs, projected to reach $280 million next year, are suffocating the city's budget and its ability to provide residents with robust basic services like police protection. Addressing pension costs have for years been a bipartisan top priority, particularly as community problems like crime, juvenile justice, aging infrastructure and underfunded parks and libraries persist. Jacksonville's pension costs far exceed those of its peer cities.

'Too apocalyptic'

Curry originally touted the pension tax as a way to free up substantial revenue — up to $100 million per year even before the tax begins in 2030 — but he's been vague on how the mechanics of that plan would work, and he has since refused to discuss how he would spend any of those savings. Instead, he's repeatedly said a "yes" vote Aug. 30 is imperative to saving the city's future and told voters not to focus on the extra savings his plan might create.

"I'm concerned about the approach that's being used. It's too apocalyptic," said Tad Delegal, a labor and employment attorney, who served on a high-profile task force that studied city pension issues in depth.

Delegal said that approach fails to address more pressing questions about how Curry's plan would help the city pay for better quality-of-life projects and what those priorities are.

"It doesn't explain what we need to do otherwise with (potential savings). Can we put more of that money in downtown revitalization? Can we put more of it in public safety salaries? Can we put more of it in youth programs?" he said. "The unfunded liability is a substantial drag on Jacksonville, and it is very much limiting the good things our city should be doing."

Curry, in an interview, said his analogy with Detroit is better understood this way:

"Detroit ended up in a financial emergency. We're in a financial crisis. If it's not dealt with, it will be a financial emergency," he said. "No reasonable person could look at our balance sheet and our budget and suggest otherwise."

Supporters of the mayor's pension push chalk the distinction up to a distraction.

"I'm not interested in quibbling over specific characterizations," said Susie Wiles, a Jacksonville consultant who co-chairs Yes for Jacksonville, a political action committee supporting the pension tax.

"I am firmly committed to Mayor Curry's view of the seriousness of the problem we face and equally committed to doing everything I can to make sure his plan to solve this crippling problem is approved by the voters," she said.

City Council member Lori Boyer, soon to be the council president and a strong backer of Curry's plan, said she's been careful about using the Detroit comparison in public but has done so repeatedly in private conversations with civic leaders about the pension problem.

"The Detroit comment might have an emotional overtone. It might not be that grave at this very moment," she said. "But the problem is, who wants to get it there before anyone does anything about it?"

A toxic cocktail of factors exacerbated budget problems in the four years under Curry's predecessor, former Mayor Alvin Brown.

Pesky pension costs

Years of falling property values and the prolonged hangover from the national recession, coupled with changes in the way pension investment returns and employee retirements were calculated, created a spike in what the city paid every year for pensions. One year, Brown had to grapple with a 50 percent increase in the cost of pensions with a smaller budget. Yearly costs for public-safety pensions more than doubled during Brown's term.

Now, however, some of those conditions have slowed or reversed completely:

Budgets have gone from shrinking every year to growing once again because of rising home values and more favorable economic conditions. A series of pension reform measures enacted last year, in Brown's final days in office, are projected to stabilize the rising cost of future benefits for public-safety pensions, which make up the majority of Jacksonville's retirement debt.

In short, trend lines are already moving in the right direction.

That doesn't mean the city is in a good position to address quality-of-life issues — growing pension costs eat up even millions of dollars of growth in property-tax collections and other revenue.

Even as city officials pine for more money to expand quality-of-life services for residents, that hasn't stopped them from finding money this year to pay for 40 more police officers and $45 million to help billionaire Jaguars owner Shad Khan build an amphitheater and indoor practice facility next to EverBank Field. Some of that largesse was financed by one-time money that Curry says won't be in the budget next year.

Gov. Rick Scott visited Jacksonville recently to announce a tech company would create 200 jobs in the city.

Curry did not attend the news conference, but he released a statement later that lauded the development as a sign "Jacksonville continues to become a leading destination for business expansion."

State figures show unemployment in the Jacksonville area is at 4.3 percent, a significant drop from its recession high of 11.2 percent in the summer of 2010. When Detroit filed for bankruptcy, its unemployment sat near 18 percent — a 200 percent increase since 2000.

Curry nonetheless said he fears the city could be heading down the same path as Detroit.

The mayor said he stands by his dire assessments if voters don't approve his plan Aug. 30.

"Can critics shoot holes in it? Absolutely, you can always do that," he said. "This is the only (plan) that works . . . I've chosen in my first term to pitch an idea that is a very long-term solution."