That’s the question Jacksonville Mayor Lenny Curry was asked last week by a House Committee in Tallahassee.
They asked it differently than that in the State Affairs Committee.
Rep. Michael Bileca, R-Miami, said that the bill, in its consideration of a sales tax extension, “is the window to look at benefit levels” and the obligation “shouldn’t only be on the back of the taxpayer.”
His contention was that the estimated $60 million in annual tax proceeds wouldn’t make a big enough dent in the $200 million burden that Curry says the pension obligation imposes on the city.
Bileca was right, of course. The explanation of how the tax will actually work is rarely, if ever, presented completely. This is what might really happen if the bill were to get out of Tallahassee this session: The $2.6 billion unfunded liability would be amortized, and the money to pay it off would come whenever the Better Jacksonville Plan is finally paid off … which optimists say could be just a decade away.
Interest rates are basically flat right now. And there are many reasons why.
One reason: We are hurtling into a global recession, at the very least.
Further, China’s markets are a wreck. The Eurozone is, likewise, in deep, deep doo-doo. Petro-economic superpower Russia is hurting because oil is cheaper than bottled water.
These are not auguries of some economic boom. The strong numbers the One Percent benefitted from during the funny money policies of the Obama years were predicated on inflation of the money supply; this currency manipulation has been global in nature, and it’s been a Band Aid on a heart wound.
Obama is headed out of office in less than a year. No matter who replaces him, though, the next president isn’t going to get to rely on the tricks that Obama was able to use for most of his eight years (a response to the 2008 crash) or the ones that George W. Bush got away with between 9/11 and Hurricane Katrina.
This will trickle down into every local economy that doesn’t have a unique value add … and that includes Jacksonville. Aggressive state and local incentives have helped to bring corporate businesses here, even as folks like City Councilman Aaron Bowman of JaxBiz will tell you that some didn’t come here because we lack an HRO to protect LGBT employees. Bowman is going to face a hard right challenge in the 2019 election for his candor. But he and others are keenly aware that business has to be accommodated, now more than ever, because bad times are ahead and we need all hands on deck to mitigate them.
Will the pension tax work? If interest rates stay low, if the tax base keeps expanding … in other words, if the so-called boom keeps booming. Maybe. At least as long as Sam Mousa and Mike Weinstein are in City Hall.
Another interesting committee moment: Dwayne Taylor, ranking committee Democrat, cited “major, major, major concerns” with closing the defined benefit plan, which he described as “turning off the water faucet.”
Taylor’s issue is that no one will be paying into that plan after a while, except for taxpayers who, even though Their Taxes Aren’t Getting Raised, will be spending a certain percentage of their walking-around money on the pension largesse of politicians from bygone eras.
Taylor likened this bill to the “shell game they played with the Florida Lottery,” regarding claims that gambling proceeds would go to education funding.
Taylor and Bileca were the only two to vote against the bill in that committee. It got through; perhaps because Travis Cummings, the bill’s primary sponsor, did a really good job selling it. And Mayor Curry and his main lobbyist on this one, Marty Fiorentino, know the players and knew how to make the sale.
For Curry, this bill is everything. He has said on multiple occasions that he’s betting all of his political capital on it if he has to, using language reminiscent to that which W used in 2005, saying, “What good is political capital if you don’t use it?”
If the bill passes, the roads will be fixed, cops will be hired. If the bill fails, Curry has said, a nightmare scenario awaits Jacksonville, which would be choking on its unfunded liability for decades to come, perhaps even needing state intervention (as Detroit experienced in Michigan) to get through.
Curry, in selling a bill that he described as “the best in a series of bad options,” related to “bad decisions … ” made “way before my time,” seems to be blaming former Mayor Alvin Brown. But also in the blame-distribution mix are every previous mayor, every City Council, and the Police & Fire Pension Fund.
The pension tax is going to be sold to you by the mayor and council leadership as a silver bullet. The question that needs to be asked, by policymakers and the public, is: To what degree is it a half-measure? And when will we start seeing tangible benefits?
And what if it doesn’t work?