This past Wednesday night (April 19th), a special City Council committee in Jacksonville, Florida unanimously supported Mayor Lenny Curry’s plan that aims to reshape the city’s pension plan and looks to pay off current its current debt.
The proposal, which has been in the news for months, has been touted by some and scrutinized by others. The new plan has two major components that change effect the taxpayers and pensioners in Jacksonville. The first step of the plan would end defined benefit pensions for all future City Hall employees, and instead grant the individuals the option to enroll in a 401(k) style retirement account.
The second feature of the plan deals with how the city will pay off the current debt levied against the city’s public pension system. The city plans to use its optional half-penny sales tax revenues (starting in 2031) to pay off the debt. This plan has come under fire as a recent actuarial analysis suggests this method could take upwards of 30 years to pay off the debt, meaning Jacksonville could be dealing with this issue till 2060.
For years Florida TaxWatch has written on the crisis related to Jacksonville’s pension, in fact our organization was the first to warn the city back in 2008. While TaxWatch applauds the city’s attempt to quell the pension problem, the solution that is proposed is not a perfect one and there are still some issues that could continue to affect the city. For one, the proposed plan could leave the city giving out overly generous 401(k) matches (as much as 25 percent for police officers and firefighters.) Furthermore, the city’s half-penny sales tax is already dedicated to paying for city construction projects through 2030, meaning the city will not be able to truly start paying off its debt until 2031.
While TaxWatch believes Mayor Curry’s plan is a step in the right direction, there is still work left to be done.