Mayor Alvin Brown’s retirement reform task force possibly gave him the last recommendation he wanted to help pay down the city’s pension obligations: A tax increase.
Brown has opposed all tax increases since before he was elected in 2011.
The task force also declined to use Brown’s proposal of asking JEA to pay an additional $40 million a year to the city. A draft report by the group said it was “not a present solution” and would take decades to fix the $1.7 billion unfunded liability issue within the public safety pension plans.
Something will have to change in the next couple of weeks if Brown adopts a major part of a report the group will finalize as it winds down months of work.
To more quickly pay down the city’s unfunded liability, the task force is recommending a choice, of sorts, for voters. First, City Council could implement a property tax increase in the coming months to generate about $68 million in revenue — about a 1.5 mill bump.
Then, council could decide to put a half-cent sales tax increase on the ballot in November. The particular surtax is used for fire rescue services and facilities, but if approved would mean the property tax rate would have to be lowered to cover the amount, also about $68 million.
In effect, it gives voters the option whether to pay for the increase via a property tax or a sales tax.
The task force favors the latter, saying a property tax increase “is not as good as solution” because the sales tax is “broader” and would rely on everyone in Duval County who purchases goods and services.
The group met Thursday to tweak language of the 43-page draft report and was thanked by Brown and others for their efforts over the past several months. Afterward, Brown said he was optimistic about finding a solution, but maintained his tax stance.
“I don’t support raising taxes, period,” Brown said. “It may be in there, but I don’t support raising taxes.”
He said he had not read the full draft and wanted to see all of the recommendations the group will present.
Task force Chair Bill Scheu said the tax increase is part of the proposal.
“We need leadership in the city,” Scheu said. “He said he would consider it and we’ll take him at his word.”
As for the idea of Brown coming around to the tax increase, Scheu said “hope springs eternal.”
As for the JEA solution Brown has pitched, the draft report points out the leadership at JEA says it would lead to a rate increase for customers, though Brown insists that would not happen.
The mayor has said the “partnership” between the two could lead to the utility saving millions by moving its employees to their own pension plan.
The report says if JEA agrees to the proposal, council can consider it later as a funding source. JEA senior staff is reviewing the idea, but for now, it’s “too early” to count on it, the report says.
Chris Hand, Brown’s chief of staff, told the committee any solution — even a millage increase or voter referendum — is months out and that the timing concern of the JEA possibility “may not be applicable.”
Other than funding, the group also reviewed portions of the report focused on the history of the pension problem, governance reform, the creation of an investment authority to help the Police and Fire Pension Fund board and pension design, among other aspects.
The task force will meet March 19 to finalize the report before again meeting the next day to present the study to Brown and council.
Council President Bill Gulliford said he intends to call a special meeting soon after to allow others to review and discuss the proposal.
The administration could then head back to the table for collective bargaining. If no deal is reached and headed toward impasse, council would be the final arbiter.
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