Opinion: Referendum 1 Totally Fails to Reform PensionAugust 15, 2016 11 comments Print Article
Voting No on Referendum 1
One of the most contested initiatives on the August 30, 2016 ballot is Mayor Curry's pension sales tax proposal, Referendum 1. Curry's plan attempts to raise the sales tax by half a penny...in fifteen years. Meaning, we will vote this month on whether to create a sales tax in the year 2030, the same year the Better Jacksonville Plan's half-cent sales tax expires. The plan is more than just a sales tax. It is also an attempt to refinance pension debt, which comes at significant cost.
In the below piece, local pension policy wonk Tom Majdanics, thoroughly and adamantly encourages voters to Vote No on Referendum 1 because the plan fails to address the foundational issues of Jacksonville's pension. Majdanics argues Curry's plan not only adds more debt to the already unsustainable pension obligation; it also forces the next generation to pay off our current and future pension debts as a result. Amongst some opponents, Referendum 1 is being called the single largest transfer of debt from one generation to the next in Jacksonville's history.
Over the past 15 years, Jacksonville’s city government has mutated from a provider of civic goods and services to a supplier of unsustainable pension benefits.
Citizens are paying the price for years of back-room deals, conflicts of interest, secret executive retirement packages, absentee oversight, and as reported by the Times-Union, employees with $5 million pensions.
Over $1 billion of taxpayer monies has been diverted to pensions in the past five years, causing city services to be slashed. Pensions alone now consume one-quarter of our city budget.
Even with this $1 billion infusion, our pension debt grew by over $700 million. We are now faced with a pension debt of $2.85 billion.
Jacksonville’s pension system has been a civic catastrophe. It demands total reform.
I voted for Mayor Curry, financially supported his campaign, and respect his effort to find a solution to this inherited problem.
But the Mayor has proposed a plan whose cornerstone is a new, $4 billion pension bailout tax, the largest tax in Jacksonville history.
His plan protects the status quo of unsustainable pension benefits.
His plan refinances pension debts, against the guidance of his own financial advisors, at a cost of $1.5 billion to taxpayers.