Lost revenue and skyrocketing pension expenses have taken $180 million from the coffers of the city in the upcoming budget year. This includes $100 million in forced cuts from Tallahassee, $40 million from the global economic crisis and $40 million in increased pension costs.
“Cities across the state and country are struggling with significant budgetary challenges and Jacksonville is no different,” said Mayor Peyton. “Given this city’s $180 million challenge it is clear that the math of Jacksonville’s budget does not work. We must make cuts. We must reform the pension system. And we must generate new revenue. However, all three elements must work together to ensure modest impacts to property owners, while ensuring that basic city services are still available to the community.”
The mayor’s plan includes significant cuts to the city’s operating budget, sustainable pension reform and a modest revenue increase.
Cuts to the city’s operating budget
At the mayor’s direction, the city’s budget and management teams have identified $40 million in additional cuts for the upcoming budget. These cuts include a 5 percent, across-the-board budget cut in all non-public safety departments and the elimination of more than 100 positions. In addition, Peyton will take to the collective bargaining table a proposal to freeze pay for all city employees and an unpaid furlough for all non-public safety employees.
“My administration has consistently taken steps to keep our operations lean,” said the mayor. “Our employees have done a phenomenal job of keeping pace with service demand with a smaller workforce and a tight rein on expenses. And we will continue to work toward new efficiency gains every day for the balance of my term.”
Since 2006, Peyton has eliminated approximately 400 positions in government. In addition, government has been reorganized to seek greater efficiencies by more closely aligning like-functions. Further, the Jacksonville Economic Development Commission has been cut in half and a number of other departments and divisions have been trimmed.
Sustainable pension reform
The second step in the mayor’s plan is to propose a series of reforms that will be fair, competitive and sustainable to address the city’s current pension model. In total, the current unfunded pension liability is $1.2 billion.
The magnitude of the city’s pension obligation is real and exponentially increasing. For example, six years ago, the city’s annual pension obligation was approximately $40 million. Next year, it will be nearly $110 million. Ten years from now, the pension obligation will be $260 million.
Key elements of pension reform could include modifying the 8.4 percent DROP guarantee, the retirement age and years of service criteria, employee contribution rate, cost of living implementation and other issues. These reforms will be negotiated at the collective bargaining table.
Revenue increase
Despite aggressive cuts, filling the budget gap requires an additional $60 million. In order to close this gap, the mayor will propose to the Jacksonville City Council on July 13, a millage rate increase. Based on the current estimates provided by the Duval County Property Appraiser, the proposal may include an increase of approximately 1.2 mils. An increase from 8.48 to 9.69 mils will cost the average homeowner in Jacksonville approximately $115 more next year than in the current year. The final millage proposal will be based on the July 1 tax roll as identified by the property appraiser.
“This decision to raise new revenue is difficult, and was not made hastily. However, the alterative to this revenue increase would be $100 million in cuts next year and detrimental financial, social, cultural and safety impacts on this community,” said Mayor Peyton.
Examples of such cuts, in the absence of a millage increase, would include:
- Closing two fire stations,
- Closing five libraries,
- Close 10 community and senior centers,
- Closing the Cecil Equestrian Center,
- Eliminating the city’s residential recycling program,
- Closing The Ritz Theater and LaVilla Museum,
- Significantly reducing the city’s special events, and
- Cutting children’s programs.
“The proposed millage increase would take our property tax rate to approximately what it was prior to Tallahassee’s micromanagement of our local budget,” said Mayor Peyton. “If we don’t fix it now, it will take more than a decade to get back to where we need to be, even if the economic boom were to start again tomorrow.”
Community engagement
Mayor Peyton called for a broad community conversation about his budget proposal and the importance of investing in Jacksonville. He will be announcing a series of budget workshops next week.
“Through two-way dialogue and focused efforts to build consensus, we build a stronger community and confidence in our budget and this government. Our goal will be candid, transparent engagement about this year’s budget as we work though this process together,” Peyton said.
Peyton noted that two years ago, when Tallahassee forced property-tax reforms across the state, the people of Jacksonville began a community-wide conversation about the city’s financial condition. In the end, Duval County was the only urban county in Florida to vote against Amendment One. Our financial condition has been a near constant topic of conversation almost every day over the last two years.
The mayor encouraged residents to educate themselves about the budget by visiting www.FixItNow.cc, a Web site created by the Mayor’s Office.
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stephendare
June 25, 2009, 02:21:01 PMwow. this is going to be controversial.
Steve
June 25, 2009, 02:32:52 PMyou know, I can't help but feeling that this is just like GM. They rain their company like idiots for so long, now we have to bail them out. How is this any different?
jaxlore
June 25, 2009, 04:31:09 PMhmmmm not sure how i feel about this one. it doesn't surprise me though. you will probably here something from the real estate lobby in the next 15 minutes about how this will destroy home sales.
urbanlibertarian
June 25, 2009, 04:52:14 PMShould we consider selling the football stadium to the Jags or the NFL? Is there other city property we could sell to raise money?
mtraininjax
June 25, 2009, 06:17:01 PMBond traders are doing a great job of that already, rates were at 4.5% for a few weeks in March, then the groups who wanted a higher rate on their 10 year note pushed it where we are today above 5.6%. Rising rates will kill re-finances, for sure. But if you listen to the people on CNBC and the bankers, they all know that real estate is the key to getting out of this recession. 400,000 new homes in construction are basically flat lined, back in April 2007, it was reported that we had 2.1 million new homes for the prior month. So we have a long way to go to catch up.
Jacksonville needs real estate to pickup to put people back to work, and create the trickle-down effect that real estate has on all the other businesses.
coredumped
June 25, 2009, 10:36:25 PMWJXT, CH4 is going to have the mayor on the morning show tomorrow morning. Their twitter didn't say what time though:
http://twitter.com/4TheMorningShow
mtraininjax
June 25, 2009, 11:31:01 PMForget the mayor, I want to see the Council on TV, they are the ones with the real power and they are the ones who will accept it or veto it.
The mayor could ask to paint the town in pink and lime green, but until the council signs off, I don't worry too much about what he says.
grimss
July 14, 2009, 09:36:27 PMNot listed in this summary is the eradication of the entire Historic Preservation division of the Planning Dept, as well as the Historic Preservation Commission. The sole code/ordinance enforcement officer for Riverside Avondale has already been cut. So . . . potentially, the gutting of any real protection for the city's historic districts.
tufsu1
July 14, 2009, 10:00:59 PMumm...to my knowledge, there are several historic preservation planners in the Panningt Department...are yousaying that those positions are set to be cut?
samiam
July 14, 2009, 10:39:20 PMIf this is true we need to organize a all volunteer Historic Preservation group and we need to know now so it can be in place prior to the paid division is cut
thekillingwax
July 15, 2009, 12:59:19 AMAll I know is that our property taxes magically shot up overnight (almost $1000 in one year, which also caused our insurance to make a similar leap) with our home value and now that the values have tanked across the board, they should go back down just as quick. But no, that won't happen.
So let's see:
- Closing two fire stations,
I'm not wild about this one.
- Closing five libraries,
I won't mind, I stopped going since downtown is pretty much a beautifully designed homeless daycare center.
- Close 10 community and senior centers,
Never used any of these, won't miss them
- Closing the Cecil Equestrian Center,
The what? Never heard of it.
- Eliminating the city’s residential recycling program,
Meh. We've started collecting and bagging our own cans for cash.
- Closing The Ritz Theater and LaVilla Museum,
If they can't sustain themsevles...
- Significantly reducing the city’s special events, and
We should do this already. Instead of dumping money into fireworks for the next 4th (this one was really sad looking), they should host something like a festival with food vendors and live concerts.
- Cutting children’s programs.
Don't/won't have kids, so I really don't care.
I guess it seems mean but we're already paying out the ass for services that we cannot use.
Keith-N-Jax
July 15, 2009, 02:46:15 AMIs there other city property we could sell to raise money?
[/quote]
City should have done this already. How much money are they sitting on, Landing, school board, court house, etc. This city leadership sucks, besides the fire stations, shut it down. Peyton and his lies and smoke screens. Closing libraries then go to the ones that are left open, same with community centers, Equestrian center, wtf, should have built an aquarium instead probably would have made money and added an attraction for the homeless camp they call downtown, cutting childrens programs, then enhance the ones left open and parents spend more time with your children. City events, they mostly suck anyway and I go out of town when I want to experience vibrancy. You guys are kidding yourselves if you think that these dummies can pull Jax in the right direction.
vicupstate
July 15, 2009, 08:51:28 AMOkay, now let's look DEEPER, you know BEYOND the end of your nose, to see what the TOTAL effects will be of these cuts.
- Closing two fire stations,
Response times will rise in the affected areas. ISO rating could be negatively impacted, perhaps even citywide. If that happens, you can expect an increase in homeowner insurance rates.
- Closing five libraries,
The DT branch is not included. Patrons will either drive further or do without. Doing without means less exposure to learning for them, including children. Also it would mean the loss of a positive leisure activity. If they drive further, then they pay more in gas and car maintenance, and we have more pollution and congestion. Perhaps most significant of all is the waste of an expensive resource that taxpayers are already paying for (ie the buildings and the books).
- Close 10 community and senior centers,
Center users see a reduction of their quality of life. Less activity leads to health problems which increase medicare/medicaid expenses that we all pay. Teens that previously spent idle time at community centers, now hang out on street corners. Juvenile crime results. Increased crime leads to Sheriff calling for more resources. Being that Public Safety is the ultimate sacred cow, and no one likes having their car broke-in, the city obliges.
- Closing the Cecil Equestrian Center,
The city saves the expense, but also losses the revenue from sales and bed taxes that events at the center generated. The businesses themselves also lose their revenue at a time when the economy is already suffering. And again, a resource that taxpayers are already paying for goes unused, and likely neglected as well.
- Eliminating the city’s residential recycling program,
Landfill will fill up sooner than it otherwise would have, because reyclable items will now go there. Landfill's useful life is therefore shortened.
- Closing The Ritz Theater and LaVilla Museum,
Museums don't sustain themselves and never will. Not everything worthwhile is, or can be, a money making venture. Let's close the Smithsonian as well. Another chapter of local history fades from memory. And again, another expensive resource that taxpayer's are paying for goes unutilized and neglected.
- Significantly reducing the city’s special events, and
Loss of a leisure activity that brings vibracy to DT. Adds to the image of Jax being a city with 'nothing to do'.
- Cutting children’s programs.
Children would receive less education, have fewer positive leisure activities, receive reduced medical attention. Those conditions lead to more crime, more expense (read: taxes) for juvenile justice, medicaid expenses, and the like.
A BETTER idea would be to find less impactful cuts that should be made, like the annual Chamber of Commerce junket to some great city that JAx will NOT learn anything from anyway.
thebrokenforum
July 15, 2009, 09:29:54 AMYou do not help lower a city's crime rate by taking away its community resources.
Things like libraries should be untouchable. I have always found it odd that in certain parts of the city there are virtually no bookstores - take away the libraries as well (and throw in the frustration of public transportation) and there will be nowhere to get a book. What kind of message does that send? Reading is not important? Especially in a city where literacy is a problem?
It is ridiculous to hype something like the "Journey," a program which stresses community centers and reading programs as being detrimental to the future success of the city not losing another generation...and then turn around and sever those same programs without even blinking.
Cuts have to be made but these are not the kind the city needs. Surely Mr. Reading Rainbow himself realizes this? Maybe not.
If you cut programs like these alternatives will surely present themselves over time. Everyone knows what those alternatives lead to.