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Community => Politics => Topic started by: Metro Jacksonville on June 20, 2016, 03:00:05 AM

Title: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Metro Jacksonville on June 20, 2016, 03:00:05 AM
4 Reasons to VOTE NO on Mayor Curry's Tax Proposal

(https://photos.smugmug.com/Mayor-Currys-Tax-Plan/i-6wcrzMv/0/L/LennyCurry_Pension_Jacksonville_tax1-L.jpg)



Read More: http://www.metrojacksonville.com/article/2016-jun-4-reasons-to-vote-no-on-mayor-currys-tax-proposal
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Charles Hunter on June 20, 2016, 08:17:41 AM
Interesting. Anxious to see the rebuttal.

Oh, and what does the MPP with Aresh's name mean?
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: TheCat on June 20, 2016, 09:54:00 AM
I'm interested in seeing the rebuttal too but the mayor's office seems reticent to provide concrete information.

They know the actuarial report that everyone is reviewing is not helping their case.

The mayor's office has calculated that the payment will increase to $430 million. The actuarial firm that created the report I referenced in the article does not come anywhere near that number. So, Financial Services Director Mike Weinstein has told the Times-Union not to worry that they are working with the actuarial firm to create a more threatening report.  ::)

http://jacksonville.com/news/metro/2016-05-15/story/reports-jacksonvilles-future-pension-costs-have-dramatically-different
 (http://jacksonville.com/news/metro/2016-05-15/story/reports-jacksonvilles-future-pension-costs-have-dramatically-different)

Quote
While making the case for voter approval of a half-cent sales tax in August, Mayor Lenny Curry has said the city’s annual pension costs for its three plans — police and fire, general employees, and corrections officers — will balloon from $260 million this year to $433 million in 2039. That figure comes from in-house calculations done in early January by the city’s finance department.

But a different report issued in February by Milliman, an actuarial firm hired by the city, paints a much less dire picture for the portion of pension costs attributable to the Police and Fire Pension Fund. Based on Milliman’s long-range projections, the city would be paying about $113 million less in 2039 for police and fire pension costs than the city’s in-house number-crunching estimates.

The long-range cost projections are important because voters will be deciding Aug. 30 on whether they will support a half-cent sales tax as a long-term funding source for paying down the city’s $2.85 billion pension debt.

Financial Services Director Mike Weinstein acknowledged the variance in the financial projections.

“You can basically say that under different scenarios that have been done over the past six months, you get different numbers,” Weinstein said.

He said the city recently told Milliman to do an updated 30-year projection for the Police and Fire Pension Fund that would use the most current data and assumptions available to pin down future costs. The city will likewise do actuarial studies for long-term costs of funding the General Employees Pension Plan and the Corrections Officers Plan.

“They’ll be the most accurate numbers that we have,” Weinstein said.

Weinstein said those reports should be done in mid-June, so the information will be available before voters head to the polls for the Aug. 30 referendum unanimously supported last week by City Council.

If approved by voters, the half-cent sales tax would begin after the Better Jacksonville Plan’s sales tax expires around 2030. The pension-funding sales tax would run through 2060 or when the city achieves full funding of its existing pension plans, whichever comes first. The city’s target for full funding is around 2045.

A year ago, the city completed pension reform for police and firefighters by cutting back what new hires will get when they retire. The agreement also modified the benefits that police and firefighters already on the job would earn.

The February report by Milliman showed that based on that agreement, the city’s annual costs for the police and firefighter plans would rise from around $160 million this year to $202 million in 2027. Then the payments would glide down and stabilize. For instance, the estimated payment would be $157 million in 2039.

In contrast, the spreadsheet done in-house by the city shows the cost for police and firefighter pensions will keep rising until it peaks at almost $270 million in 2039. The cost for the general employee pension plan would be $140 million and the corrections officers plan would be roughly $23 million, adding up to nearly $433 million cited by Curry and other administration officials.

But that report calculated future pension debt paydown costs based only on expected payroll growth, and it wasn’t intended to take into all the other complicated factors that go into an actuarial study.

The Milliman report in February is an actuarial study. But Weinstein noted that Milliman put disclaimers into the report stating the results were based in part on data going back to 2012. The reports expected next month will use more current information, and that will result in different cost projections.

“It doesn’t change the picture,” Weinstein said. “The picture is a bad picture, but we don’t know exactly what the costs are going to be because they change literally every year.”

 
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: TheCat on June 20, 2016, 09:55:36 AM
Oh, Masters in Public Policy. I'm part of the first cohort to go through JU's Public Policy Institute, which is under the directorship of Rick Mullaney.

Spelled,  Arash  :)

Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: UNFurbanist on June 20, 2016, 11:07:57 AM
So here's my thing... Personally I don't support the plan but Curry essentially has a strangle hold on the city. If it doesn't pass then we will start to see budgets cut to desperately tiny levels and not a single new project downtown or anywhere else will get funding. We will go anaemic and won't be able to pay for any quality of life improvements which will tank our standing as a city even worse. We desperately need improvements right now to even hope to compete with other large cities in the US. So how will voting no on this help in any way on that front?
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: TheCat on June 20, 2016, 11:24:18 AM
How will voting yes help on  that front? For the next 15 years this plan does essentially nothing to help with the obligation. post-2030, we're still managing to take out big chucks of $$$ from the budget to subsidize the pension tax.

If you look at page 3, "still constrains the budget" ( hopefully I explained it well enough) the tax frees up at either $56 million or $68 million. Even that amount is dubious because the mayor's office has not outlined how he plans to reduce the obligation if the tax passes.

The general budget is still on the hook for well over a hundred million dollars each year, well before the tax ever kicks in. We're still struggling even if Curry figures out a way to lower our obligation payment.

A lowered obligation is only temporary. What ever we don't pay comes back to haunt us at a much larger and more unmanageable levels.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: thelakelander on June 20, 2016, 11:46:41 AM
So here's my thing... Personally I don't support the plan but Curry essentially has a strangle hold on the city. If it doesn't pass then we will start to see budgets cut to desperately tiny levels and not a single new project downtown or anywhere else will get funding. We will go anaemic and won't be able to pay for any quality of life improvements which will tank our standing as a city even worse. We desperately need improvements right now to even hope to compete with other large cities in the US. So how will voting no on this help in any way on that front?
What improvements specifically? With the different type of funding mechanisms out there, several projects won't be impacted by the results of the vote either way. For example, the JAXIS project already has its funding, which comes from JTA and the feds and the Fuller Warren bike path is being paid for by FDOT. Projects like Vestcor's LaVilla Lofts and Beneficial's Houston Street Manor are both being largely funded with federal tax credits. Some others like Baptist MD Anderson, Broadstone Riverhouse and the CVS at Brooklyn Station are being funded with private dollars. Also, I believe Riverplace Blvd's revamp is being paid with TIF money. To a degree, downtown development in general should probably be a separate discussion altogether. Even communities like Detroit and Birmingham, that have actually filed for bankruptcy, are still seeing heavy reinvestment in their downtown cores. Jax can get there too, but Jax's issues have just as much to do with revamping public policy as money for subsidizing development projects.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: hiddentrack on June 20, 2016, 12:01:01 PM
The follow-up posts have reminded me of something I always try to keep in mind: if one side is trying to scare you into supporting their position, if they're holding a process hostage until they have your support, they're most likely supported by a very weak argument. It's hard not to see this is the case with Curry right now.

I hope a counter-argument (if there's someone here willing to make one) will be shared so both sides can make their case, but this article makes a very strong argument. I don't know what the best solution to this problem would be, but I can't believe it's going to come easy, and this fix just seems like trying to take the easy way out. Curry's ambitions beyond Jacksonville are obvious, and this is the low-risk gamble he's willing to take in the hope it will offend no one. Unfortunately it doesn't seem like it's going to help anyone either...
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: TheCat on June 20, 2016, 12:09:30 PM
^+1
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: vicupstate on June 20, 2016, 12:26:24 PM
So here's my thing... Personally I don't support the plan but Curry essentially has a strangle hold on the city. If it doesn't pass then we will start to see budgets cut to desperately tiny levels and not a single new project downtown or anywhere else will get funding. We will go anaemic and won't be able to pay for any quality of life improvements which will tank our standing as a city even worse. We desperately need improvements right now to even hope to compete with other large cities in the US. So how will voting no on this help in any way on that front?

If it doesn't pass, the city will have to go to plan B. And yes there is one, they just won't say what it is. If Curry wants to be re-elected, he simply can't hold everything else in the city hostage to the pension. 
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: UNFurbanist on June 20, 2016, 12:32:27 PM
So here's my thing... Personally I don't support the plan but Curry essentially has a strangle hold on the city. If it doesn't pass then we will start to see budgets cut to desperately tiny levels and not a single new project downtown or anywhere else will get funding. We will go anaemic and won't be able to pay for any quality of life improvements which will tank our standing as a city even worse. We desperately need improvements right now to even hope to compete with other large cities in the US. So how will voting no on this help in any way on that front?
What improvements specifically? With the different type of funding mechanisms out there, several projects won't be impacted by the results of the vote either way. For example, the JAXIS project already has its funding, which comes from JTA and the feds and the Fuller Warren bike path is being paid for by FDOT. Projects like Vestcor's LaVilla Lofts and Beneficial's Houston Street Manor are both being largely funded with federal tax credits. Some others like Baptist MD Anderson, Broadstone Riverhouse and the CVS at Brooklyn Station are being funded with private dollars. Also, I believe Riverplace Blvd's revamp is being paid with TIF money. To a degree, downtown development in general should probably be a separate discussion altogether. Even communities like Detroit and Birmingham, that have actually filed for bankruptcy, are still seeing heavy reinvestment in their downtown cores. Jax can get there too, but Jax's issues have just as much to do with revamping public policy as money for subsidizing development projects.
Overall, I agree with you. I guess the specific downtown project I was thinking of was the Trio and Barnett. That will require a significant public investment and if this doesn't pass then there isn't a snowball's chance in hell it'll get that funding. Which is sad because I see that as the most important project DT. Maybe this is naive because it probably doesn't have much of a shot at getting funding anyways but I just know I won't be able to stand 3 more years of Curry basically refusing to fund or even talk about any project because this pension plan didn't pass. I am no expert at pension issues by any means and I know there are much better was to tackle this problem but I guess I just wanted to hear how shooting this down will cost DT/Urban Core development.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: coredumped on June 20, 2016, 01:03:10 PM
If it doesn't pass, the city will have to go to plan B. And yes there is one, they just won't say what it is. If Curry wants to be re-elected, he simply can't hold everything else in the city hostage to the pension. 

I thought he said plan B was to raise our property taxes 30 percent:
http://jacksonville.com/news/metro/2016-05-31/story/curry-warns-30-percent-property-tax-increase-if-voters-dont-support
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Non-RedNeck Westsider on June 20, 2016, 01:36:27 PM
Arash, can you, or anyone for that matter, explain why there's such a massive change from '42-'43?

I think I understand the larger moving parts behind the plan, but I don't understand why there's such a jump - both ways - 27 years from now.

Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: bast553 on June 20, 2016, 01:36:36 PM
I have a few questions:

1. We have never considered pension obligation bonds. Interest rates are extremely low now, and it's better over a long term period to incur low-interest debt now and invest the capital to pay dividends in the future. Pension bond money can be invested in areas closed off to general muni bonds (which I believe is how we're finding contributions now, unless we're just funding it through tax receipts). The capital for pension bonds can be spread further to allocate risk and hedge against inflation and recession, thereby mitigating the damage of systematic, long-term, grossly-negligent mismanagement (see generally the management of Keane et al).

2. Curry does not explain what happens when we need BJP money for BJP things.... This is an issue, as the BJP investments have costs associated with them.

3. Are there seriously no other ways to fund PFPF? I remember Curry saying a billion dollars was enough money to run a city. I bet if you look hard enough you can find savings. See generally EverBank Field improvements, a series of incidents during which the City Council rubber stamped proposals to add to a stadium the city cannot afford for the purpose of pleasing the personal desires of a billionaire, whose income increases as a result of the capital improvements funded by spontaneously-available tax revenue.

4. Nobody since 2001 has ever invalidated (or attempted to invalidate) the 30-year CB agreements with the unions, contrary to what is permissible under the Florida constitution...

I'm sure I can think of other questions I have about this ridiculous idea.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: thelakelander on June 20, 2016, 01:45:47 PM
So here's my thing... Personally I don't support the plan but Curry essentially has a strangle hold on the city. If it doesn't pass then we will start to see budgets cut to desperately tiny levels and not a single new project downtown or anywhere else will get funding. We will go anaemic and won't be able to pay for any quality of life improvements which will tank our standing as a city even worse. We desperately need improvements right now to even hope to compete with other large cities in the US. So how will voting no on this help in any way on that front?
What improvements specifically? With the different type of funding mechanisms out there, several projects won't be impacted by the results of the vote either way. For example, the JAXIS project already has its funding, which comes from JTA and the feds and the Fuller Warren bike path is being paid for by FDOT. Projects like Vestcor's LaVilla Lofts and Beneficial's Houston Street Manor are both being largely funded with federal tax credits. Some others like Baptist MD Anderson, Broadstone Riverhouse and the CVS at Brooklyn Station are being funded with private dollars. Also, I believe Riverplace Blvd's revamp is being paid with TIF money. To a degree, downtown development in general should probably be a separate discussion altogether. Even communities like Detroit and Birmingham, that have actually filed for bankruptcy, are still seeing heavy reinvestment in their downtown cores. Jax can get there too, but Jax's issues have just as much to do with revamping public policy as money for subsidizing development projects.
Overall, I agree with you. I guess the specific downtown project I was thinking of was the Trio and Barnett. That will require a significant public investment and if this doesn't pass then there isn't a snowball's chance in hell it'll get that funding. Which is sad because I see that as the most important project DT. Maybe this is naive because it probably doesn't have much of a shot at getting funding anyways but I just know I won't be able to stand 3 more years of Curry basically refusing to fund or even talk about any project because this pension plan didn't pass. I am no expert at pension issues by any means and I know there are much better was to tackle this problem but I guess I just wanted to hear how shooting this down will cost DT/Urban Core development.

Unfortunately, I'm not sure that project will get the amount of public money it needs regardless of the pension issue.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Lamont Cranston on June 20, 2016, 01:47:25 PM
Two suggestions -- look at a return to "pay-go" on pensions, which Jax did until 1976, and look at 2011-CA-4348, a lawsuit where the 30 year agreement got tossed but where City Council promptly entered a 7 year agreement akin to the 30 year ... and see www.just-vote-no.com for further discussion on alternatives.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: FlaBoy on June 21, 2016, 10:15:26 AM
I have a few questions:

1. We have never considered pension obligation bonds. Interest rates are extremely low now, and it's better over a long term period to incur low-interest debt now and invest the capital to pay dividends in the future. Pension bond money can be invested in areas closed off to general muni bonds (which I believe is how we're finding contributions now, unless we're just funding it through tax receipts). The capital for pension bonds can be spread further to allocate risk and hedge against inflation and recession, thereby mitigating the damage of systematic, long-term, grossly-negligent mismanagement (see generally the management of Keane et al).


Above is why the extension of the tax makes sense. Basically, you are able to bond the debt at lower rates now than inflation and investment in 30 years, but you actually have money that MUST be spent on the pension backing it up. Getting the pension off the backs of Jaxsons will be great long term for the city and lets us move forward.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: thelakelander on June 21, 2016, 11:10:07 AM
Updated actuarial study will show city may save $40M per year with Curry's pension reform starting in 2017
Full article: http://www.jaxdailyrecord.com/showstory.php?Story_id=547790
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: FlaBoy on June 21, 2016, 11:14:06 AM
I have a few questions:

1. We have never considered pension obligation bonds. Interest rates are extremely low now, and it's better over a long term period to incur low-interest debt now and invest the capital to pay dividends in the future. Pension bond money can be invested in areas closed off to general muni bonds (which I believe is how we're finding contributions now, unless we're just funding it through tax receipts). The capital for pension bonds can be spread further to allocate risk and hedge against inflation and recession, thereby mitigating the damage of systematic, long-term, grossly-negligent mismanagement (see generally the management of Keane et al).


Above is why the extension of the tax makes sense. Basically, you are able to bond the debt at lower rates now than inflation and investment in 30 years, but you actually have money that MUST be spent on the pension backing it up. Getting the pension off the backs of Jaxsons will be great long term for the city and lets us move forward.

to what?  A city with no future prospects for infrastructure financing? Sounds great, FlaBoy..  Just peachy.

Don't you still have the capability of raising sales taxes to 8% under state law?
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: TheCat on June 21, 2016, 02:31:59 PM
the report isn't released yet, right? The word "savings" is probably not the right word to use.

Someone pointed out to me some of the fine print in the other actuarial study, the one I referenced. It says...

“Please note that although re-amoritzing liabilities reduces contributions in the short-term, it should not be viewed as savings, but rather contribution deferral.”

It is likely when Curry is saying "savings", what he really means is "contribution deferral".
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on June 21, 2016, 05:12:25 PM
I've disagreed with Arash on this topic in other threads, but I think the piece was pretty well done. It does highlight some of the downsides of the sales tax plan. I do have a few caveats:

On Page 1, Curry's not arguing this sales tax is not a tax. He's saying it's not a new tax, as it's an extension of the Better Jacksonville Plan sales tax. While it's "new" in the sense that the BJP tax sunsets in 2030, it's not an increase from what anyone's paying: we'd continue paying the same amount we're paying now.

On Page 3, that seems to be an accurate assessment of the Milliman report from February. However, as noted in this Times-Union story (http://jacksonville.com/news/metro/2016-05-15/story/reports-jacksonvilles-future-pension-costs-have-dramatically-different), it's not the only report, and has different results from the one done by the city's finance department due to different considerations that were factored in. As pointed out above, Milliman is revising the report, which apparently will be done soon. The city's updated report should be done soon as well. The other reports appear to have a much more dire picture of the current payment schedule.

On Page 4, you say "Mayor Curry will rob funds that could have gone towards improving Jacksonville’s quality of life". That's not really accurate. The BJP tax sunsets in 2030, and after that the revenue stream ends regardless of this pension proposal. We could have another referendum to raise the sales tax for infrastructure, but again, we can do that regardless of the pension proposal. We have the option to raise it to 8%, and it's at 7% now and under this proposal.

The one thing I really fault the article on is not suggesting a solution. None of the experts and auditors who have looked at the pension believe that the current situation is sustainable. Even the folks against taxes under any circumstances recognize that drastic cuts will have to occur. The general consensus on Metro Jacksonville is that the city's revenues are too low for the quality of life and level of services we want, and the pension crisis is a major factor in that. Quite simply, the city needs more revenue to solve the problem. That means taxes, and that really sucks, but that's the situation Curry has inherited.

Only two options are really forthcoming: this sales tax proposal, and regular property tax. Both have their strengths and weaknesses. This article highlights some of the weaknesses of the sales tax solution, but it doesn't get into the alternatives.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: brainstormer on June 21, 2016, 08:14:18 PM
Great article! Instead of using fear-mongering and trickery, how about we finally step up as a city and pay for everything we have and want to have. We have an obligation to fund the pension and we should continue doing so. If we want money for development or money for huge increases in public safety, then we should pay for those things and pay for them now. Curry is all about transparency until it isn't in his interest. Perhaps it is time to be honest. We can't have everything without paying for it. A small increase in property taxes could fund additional public safety investments. The Better Jacksonville Plan bought this city a lot of infrastructure that I think most would agree was worth it. We as a city should decide in 2029 whether we want to continue Better Jacksonville. Curry's cunning ways will eventually catch up to him.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on June 22, 2016, 10:53:27 AM
^Unfortunately, we're not going to get a handle on this problem through a "small increase" of any kind. It's going to take a substantial property tax or a substantial sales tax - or a substantial cut of services in the near future.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on June 22, 2016, 11:30:51 AM
^Unfortunately, we're not going to get a handle on this problem through a "small increase" of any kind. It's going to take a substantial property tax or a substantial sales tax - or a substantial cut of services in the near future.

Or just restore the property tax cuts from two administrations ago.  They were based on a faulty assumption about the economy, just as everything prior to the Great Crash was, and yet its the only thing that we haven't readjusted

The current millage rate for the city (11.4419) is already higher than it was at any point during John Peyton's term. Peyton ended up having to raise taxes during the Great Recession to a point higher than the cuts he made. They went up again under Alvin Brown. In fact, the current rate is higher than it's been since at least 1994.

http://www.coj.net/departments/property-appraiser/millage-rates

It's going to take more than that to get a handle on the pension crisis.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Charles Hunter on June 22, 2016, 03:47:08 PM
He can make the outrageous claims because the local media (outside of MJ) won't call him on it. And he is amassing a war chest to sell tell public on the Doom and Gloom if it shall not pass.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on June 22, 2016, 03:57:41 PM
Also, this whole 'raise taxes by 30%' sounds like an out and out lie.

Under the last agreement that the city has with the Pension, the yearly total that the city would have to pay outright would be about 32 million annually.

At present, 1 mill equals about $48 million. Raising it enough to cover the $32 million I described would be a .67 millage increase -- not even a full mill.

The current millage rate is 11.4419 mills. 30% of that would be roughly 4.0 mils. or 4 X 48million dollars

So Curry is claiming that he would have to raise taxes by 196 million dollars a year to pay off 32 million dollars a year?  Sounds like a hell of a business plan.

Below are a couple of recent columns Ron Littlepage has written on the subject:

http://jacksonville.com/opinion/ron-littlepage/2016-06-10/story/ron-littlepage-our-citys-obsession-cheap-property-taxes

http://jacksonville.com/opinion/ron-littlepage/2016-05-27/story/ron-littlepage-raising-property-taxes-should-be-option

Sorry, but this doesn't make a lot of sense. The city has to pay everything it owes. The amount that actually goes toward the pension is about $75 million a year (not $32 million). And either way, the city also has to pay the debt it has accumulated due to the mistakes of the past. We paid $260 million this year, mostly just debt.

Look, property taxes could help this problem just as sales tax could. The question is how much would be required to hit the nut each year and alleviate the strain on the finances. Given that we're paying $260 million into the pension currently and we're stretched very thin, I tend to doubt it could be done with $47.5 million (1 mill) or even $95 million (2 mills). Curry suggested that it would take a 30% increase - 3.43 mills - which would generate $163 million, which seems reasonable.

The minuses of a property tax hike are that it would hit the citizens in the wallet harder than the sales tax will, and there's nothing stopping future mayors and councils from re-appropriating the money to other things (which is how we got to this point in the first place). On the other hand, paying up front would save in the long run as debt is paid down sooner (if it's actually paid).

These are the things the article could have looked at, but didn't. Unfortunately, it's criticism without a solution.

The rants aren't terribly productive, either.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on June 22, 2016, 04:21:08 PM
Also, this whole 'raise taxes by 30%' sounds like an out and out lie.

Under the last agreement that the city has with the Pension, the yearly total that the city would have to pay outright would be about 32 million annually.

At present, 1 mill equals about $48 million. Raising it enough to cover the $32 million I described would be a .67 millage increase -- not even a full mill.

The current millage rate is 11.4419 mills. 30% of that would be roughly 4.0 mils. or 4 X 48million dollars

So Curry is claiming that he would have to raise taxes by 196 million dollars a year to pay off 32 million dollars a year?  Sounds like a hell of a business plan.

Below are a couple of recent columns Ron Littlepage has written on the subject:

http://jacksonville.com/opinion/ron-littlepage/2016-06-10/story/ron-littlepage-our-citys-obsession-cheap-property-taxes

http://jacksonville.com/opinion/ron-littlepage/2016-05-27/story/ron-littlepage-raising-property-taxes-should-be-option

Sorry, but this doesn't make a lot of sense. The city has to pay everything it owes. The amount that actually goes toward the pension is about $75 million a year (not $32 million). And either way, the city also has to pay the debt it has accumulated due to the mistakes of the past. We paid $260 million this year, mostly just debt.

Look, property taxes could help this problem just as sales tax could. The question is how much would be required to hit the nut each year and alleviate the strain on the finances. Given that we're paying $260 million into the pension currently and we're stretched very thin, I tend to doubt it could be done with $47.5 million (1 mill) or even $95 million (2 mills). Curry suggested that it would take a 30% increase - 3.43 mills - which would generate $163 million, which seems reasonable.

The minuses of a property tax hike are that it would hit the citizens in the wallet harder than the sales tax will, and there's nothing stopping future mayors and councils from re-appropriating the money to other things (which is how we got to this point in the first place). On the other hand, paying up front would save in the long run as debt is paid down sooner (if it's actually paid).

These are the things the article could have looked at, but didn't. Unfortunately, it's criticism without a solution.

The rants aren't terribly productive, either.

Tacachale, The millage increase needed to pay the COJ's extra pension payment obligations under the 2015 agreement with Police and Fire would be .68 mill. And thats assuming that not another dime of real estate value happens in Jville for the next thirty years.  Which: Not likely.  If property values go up at all...then the percentage of millage needed to generate 32million annually would decrease as property values continue to rise and 1 mill produces more revenue.

That agreement calls for the COJ to put in an extra $5M in the current year, $10M in the upcoming budget year, $15M jn FY 2018, and $32M annually from FY19 to FY28.  The extra $32M years are the .68 mill.

Thats just how much it is.

So that's an increase to cover the amount extra we have to pay on top of the $260 million+ we're already paying to stay afloat. Yeah, it's definitely going to take a lot more than that to get a handle on this problem. Meaning 2 or 3 mills + .68.

Further, you mentioned the onerous amount of debt service that the city is paying as a downside.

Curry's plan is literally based on creating a new debt service.

I don't think so, unless new debt is taken on. It sounds like Curry has already ruled that out.

The debt service we already have isn't a downside to either form of tax. It's already there and unavoidable with either solution, or neither.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Non-RedNeck Westsider on June 22, 2016, 10:00:02 PM
The more I reflect on this issue the more I see us (the city) repeating the same mistakes over and over and over.  Pardon the overused baseball analogy, but we keep looking for a home-run and just keep taking pitches until the perfect one comes... that's great, but if you swing and miss at that perfect pitch, you're back at square one.

Since this mayors are so averse to 'tax increases' why not come up with a proposal that includes a modest tax increase to homeowners in the .8-1.3 mil range (~$50M).  Try to pass at referendum a brand new sales tax altogether of .5% (~$60M) that is tied to the PFPPF and kick in next FY, and then add a flat fee (not a tax) to [using this as a for instance.  I don't know if it's even possible] JEA services at $2.50 per month for each water and electric (~$22M).  And then reinstate the mobility plan back in full force and allow it to fund the things it's designed to do.  For god's sake, the national economy drives business, not whether or not local impact fees are collected.

This is a whole lot to put to people in one shot, so create a fucking plan and install it in stages and quit trying to be the mighty Casey.  (Sorry, baseball again) Because as many home runs he hit, he's best known for striking out.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Rob68 on June 23, 2016, 08:06:27 AM
 giveing the nfl boat loads of cash..i think its a  30 year loan..will never have my support for any more money..he's an idiot to think we dont see what hes doing.. handing out cash all over the place..he's a ridiculous leader who is completely lost..stop the bleeding of cash..i support the city employees dealing with their own retirement like most of us do..the benifits handed to city employees are far beyond what anyone else gets..they're just people..they dont deserve more than anyone else. Debt from the nfl..bebt from the foolish courthouse..debt all over the place..stop the bleeding.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on June 23, 2016, 10:29:43 AM
The more I reflect on this issue the more I see us (the city) repeating the same mistakes over and over and over.  Pardon the overused baseball analogy, but we keep looking for a home-run and just keep taking pitches until the perfect one comes... that's great, but if you swing and miss at that perfect pitch, you're back at square one.

Since this mayors are so averse to 'tax increases' why not come up with a proposal that includes a modest tax increase to homeowners in the .8-1.3 mil range (~$50M).  Try to pass at referendum a brand new sales tax altogether of .5% (~$60M) that is tied to the PFPPF and kick in next FY, and then add a flat fee (not a tax) to [using this as a for instance.  I don't know if it's even possible] JEA services at $2.50 per month for each water and electric (~$22M).  And then reinstate the mobility plan back in full force and allow it to fund the things it's designed to do.  For god's sake, the national economy drives business, not whether or not local impact fees are collected.

This is a whole lot to put to people in one shot, so create a fucking plan and install it in stages and quit trying to be the mighty Casey.  (Sorry, baseball again) Because as many home runs he hit, he's best known for striking out.

That's an interesting idea. The idea of sales tax implemented now (as opposed to when BJP expires) was explored, but wasn't considered viable. It would have had to go to the Legislature and Governor just like the current proposal, and Curry has said it wouldn't have made it through. But a more modest property tax hike could be made along with the 2030 sales tax plan, which would probably go a long way to putting revenue back in the budget. However, I wouldn't expect to see that any time soon; Jax voters have a pretty notorious anti-tax streak.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: tufsu1 on June 23, 2016, 10:45:38 AM
The current millage rate for the city (11.4419) is already higher than it was at any point during John Peyton's term. Peyton ended up having to raise taxes during the Great Recession to a point higher than the cuts he made. They went up again under Alvin Brown. In fact, the current rate is higher than it's been since at least 1994.

curious...how does our current rate compare with that of other large cities/counties in Florida?
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: spuwho on June 23, 2016, 11:01:50 AM
The current millage rate for the city (11.4419) is already higher than it was at any point during John Peyton's term. Peyton ended up having to raise taxes during the Great Recession to a point higher than the cuts he made. They went up again under Alvin Brown. In fact, the current rate is higher than it's been since at least 1994.

curious...how does our current rate compare with that of other large cities/counties in Florida?

https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585/ (https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585/)

http://www.floridaforboomers.com/10-highest-and-lowest-florida-county-property-tax-rates/ (http://www.floridaforboomers.com/10-highest-and-lowest-florida-county-property-tax-rates/)

10 Florida Counties With the LOWEST Property Tax Rates (2013)

Walton – 9.7536
Monroe – 10.1257
Collier – 11.7923
Bay – 12.1271
Franklin – 12.9457
Okaloosa – 13.4039
Sumter – 13.5546
Santa Rosa – 14.4789
Jackson – 14.5345
Sarasota – 14.5627

10 Florida Counties With the HIGHEST Property Tax Rates

Alachua – 23.442
Volusia – 23.2216
St. Lucie – 22.7249
Dixie – 21.9206
Broward – 21.0593
Pinellas – 21.0416
Hendry – 20.8776
Hillsborough – 20.7007
Palm Beach – 20.5622
Miami-Dade – 20.1139
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on June 23, 2016, 11:16:20 AM
The current millage rate for the city (11.4419) is already higher than it was at any point during John Peyton's term. Peyton ended up having to raise taxes during the Great Recession to a point higher than the cuts he made. They went up again under Alvin Brown. In fact, the current rate is higher than it's been since at least 1994.

curious...how does our current rate compare with that of other large cities/counties in Florida?

https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585/ (https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585/)

http://www.floridaforboomers.com/10-highest-and-lowest-florida-county-property-tax-rates/ (http://www.floridaforboomers.com/10-highest-and-lowest-florida-county-property-tax-rates/)

10 Florida Counties With the LOWEST Property Tax Rates (2013)

Walton – 9.7536
Monroe – 10.1257
Collier – 11.7923
Bay – 12.1271
Franklin – 12.9457
Okaloosa – 13.4039
Sumter – 13.5546
Santa Rosa – 14.4789
Jackson – 14.5345
Sarasota – 14.5627

10 Florida Counties With the HIGHEST Property Tax Rates

Alachua – 23.442
Volusia – 23.2216
St. Lucie – 22.7249
Dixie – 21.9206
Broward – 21.0593
Pinellas – 21.0416
Hendry – 20.8776
Hillsborough – 20.7007
Palm Beach – 20.5622
Miami-Dade – 20.1139

It depends how you parse it, as different counties break up the total in different ways. But, for example, the millage rate in the City of Tampa is 20.7932 and unincorporated Hillsborough is 19.461, compared to Duval County's total of 18.8932 outside the Beaches and Baldwin. However, Tampa has less of that rate going directly to the City of Tampa budget (only 5.7326 compared to our 11.4419), as the County government also gets a cut and a bunch of authorities (library, port, etc) have their own separate budgets. In the final analysis, Tampanians pay nearly 2 mills higher, and suburbanites pay half a mill higher, than we do in Jax.

http://www.hcpafl.org/Portals/HCPAFL/pdfs/2015FinalMillage.pdf
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Noone on June 23, 2016, 11:18:07 AM
The current millage rate for the city (11.4419) is already higher than it was at any point during John Peyton's term. Peyton ended up having to raise taxes during the Great Recession to a point higher than the cuts he made. They went up again under Alvin Brown. In fact, the current rate is higher than it's been since at least 1994.

curious...how does our current rate compare with that of other large cities/counties in Florida?

https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585/ (https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585/)

http://www.floridaforboomers.com/10-highest-and-lowest-florida-county-property-tax-rates/ (http://www.floridaforboomers.com/10-highest-and-lowest-florida-county-property-tax-rates/)

10 Florida Counties With the LOWEST Property Tax Rates (2013)

Walton – 9.7536
Monroe – 10.1257
Collier – 11.7923
Bay – 12.1271
Franklin – 12.9457
Okaloosa – 13.4039
Sumter – 13.5546
Santa Rosa – 14.4789
Jackson – 14.5345
Sarasota – 14.5627

10 Florida Counties With the HIGHEST Property Tax Rates

Alachua – 23.442
Volusia – 23.2216
St. Lucie – 22.7249
Dixie – 21.9206
Broward – 21.0593
Pinellas – 21.0416
Hendry – 20.8776
Hillsborough – 20.7007
Palm Beach – 20.5622
Miami-Dade – 20.1139

What other counties in the state of Florida have passed 2005-1007?
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Non-RedNeck Westsider on June 23, 2016, 11:50:31 AM
The more I reflect on this issue the more I see us (the city) repeating the same mistakes over and over and over.  Pardon the overused baseball analogy, but we keep looking for a home-run and just keep taking pitches until the perfect one comes... that's great, but if you swing and miss at that perfect pitch, you're back at square one.

Since this mayors are so averse to 'tax increases' why not come up with a proposal that includes a modest tax increase to homeowners in the .8-1.3 mil range (~$50M).  Try to pass at referendum a brand new sales tax altogether of .5% (~$60M) that is tied to the PFPPF and kick in next FY, and then add a flat fee (not a tax) to [using this as a for instance.  I don't know if it's even possible] JEA services at $2.50 per month for each water and electric (~$22M).  And then reinstate the mobility plan back in full force and allow it to fund the things it's designed to do.  For god's sake, the national economy drives business, not whether or not local impact fees are collected.

This is a whole lot to put to people in one shot, so create a fucking plan and install it in stages and quit trying to be the mighty Casey.  (Sorry, baseball again) Because as many home runs he hit, he's best known for striking out.

That's an interesting idea. The idea of sales tax implemented now (as opposed to when BJP expires) was explored, but wasn't considered viable. It would have had to go to the Legislature and Governor just like the current proposal, and Curry has said it wouldn't have made it through. But a more modest property tax hike couldn't be made along with the 2030 sales tax plan, which would probably go a long way to putting revenue back in the budget. However, I wouldn't expect to see that any time soon; Jax voters have a pretty notorious anti-tax streak.

The voters are 'tax averse' IMO because campaigns are run leading people to believe that everything is hunky-dorie, they just need a leader to tighten the belt and fix it.  The reality is that there has been too much belt-tightening at the wrong times and too much free-spending at the wrong times, that what the city needs is a reality check.  Bill Bishop was the only candidate that had that message this past EC and Audrey Moran the time before.  Both were soundly beaten because of their opponents' Builder Bob message, "Can we fix it?  Yes we can!  And we'll do it because your last mayor sucked and ran the office without the astute business sense / ability to bring the public sector together with the private sector experience that I bring to the table" from the winning candidates.

We're down the road now.  It's time to quit kicking the can.  The economy is improving and we (the public) can afford a small incremental increase over a few years to solve the problem now rather than sit on our hands and plan on having this conversation again in 15 years.  If they can approve a tax extension, then they surely can generate the support for a slight tax increase if they sold it as hard, but that's the problem with politics:  Even though it's the right thing to do, it doesn't personally help your situation.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on June 23, 2016, 12:51:35 PM
Tacachale, with all due respect, many of these assertions are simply not “reasonable”.

Some seem disingenuous.  I assume they are from the marketeers of this plan as I know you to be a pretty straight shooter, but the $260 million number you cite – the City’s total pension payment for Fiscal Year 2016, for all three pension plans -- is already covered through the general fund under the current millage rate. Your proposed 30% increase has nothing to do with meeting pension obligations and would simply add another $163 million in budget capacity.  While the extra money would be useful for things like parks and downtown, is it reasonable to claim this amount for the Pension?


On the figures I'm referring to are the ones that have been reported in the media. If the media is reporting false figures, that's a much bigger problem than this proposal.

As for the budget capacity, I think you're misunderstanding me a bit. Yes, the City is able to pay the current pension costs from the general fund. But it's a HUGE drain on the general budget, and most of it is just debt that has accumulated since the pension was last funded in 2003. I don't think anyone could seriously argue that it's not. It's also getting bigger and so will be even more of a strain.

I don't know what the city was paying into the pension back in 2003, but I'm pretty sure it was well under $100 million. However you slice the numbers, we're paying considerably more than that now just on debt. Some amount will always have to come from the general budget; it's the rest of what we owe now that's causing the strain. To get out from under it, we need more revenue to bridge the gap, and ultimately start shrinking the deby. I'm not sure what the number is that will help, but the gap is pretty considerable, especially if it contractually has to rise by tens of millions of dollars over the next few years. The fix can be done with either a sales tax or a millage tax. Both have upsides and downsides, which is really what we should be debating.


Or these fatuous claims repeatedly citing a 30% ($163 million) millage increase as the necessary equivalent if the pension sales tax is defeated.

In current year dollars, a half-cent sales tax generates around $60-$65 million annually. These pension sales tax revenues won’t be available until 2030. Is it reasonable to believe that $163 million in additional yearly revenue now is the same as $70 million in additional yearly revenue 14 years from now?


30% is what Curry has said. Again, I don't know what the number would be, but that one definitely doesn't sound beyond the pale, considering that the gap in the budget is well above that amount. The goal of any option is getting to the nut of the debt while reducing the strain on the budget enough that we can actually pay for the things we need and want, many of which have already suffered drastic cuts since the Recession.

Even $70 million in sales tax, if that's what it is, is well above 1 mill's worth of property tax revenue. And all of that $70 million would be tied to the pension, plus what ever else we pay year to year. That can't be done with property tax, as it's a year-to-year decision.


Or the claim that:  “a property tax hike….would hit citizens in the wallet harder than the sales tax will.” Maybe if you live in Atlantic Beach or some of the southside hoity toity neighborhoods,  but the majority of people in the city dont live in homes that owe more in property taxes than the sales taxes on their yearly budget.  You know...that whole regressive sales tax thing and all... ;)

Do you think lower-income citizens would find that statement about a regressive sales tax reasonable?


What I mean here is that the sales tax rate will remain the same (7%) from 2029 to 2030; people won't be paying any more one year to the next. A property tax of any size would increase the rate above the current rate. That's how'd they'd feel it.

One of the downsides of any sales tax is that's it's seen as regressive (or rather proportional) and affects the poor more than the rich. However, it also has the ability to pass some of the burden onto the surrounding counties, visitors and tourists who buy things here. Property tax affects only people who live and/or own property in Duval. There are pluses and minuses to either option.

Finally, you question the .68 millage increase idea by saying “there's nothing stopping future mayors and councils from re-appropriating the money to other things.”

Really? Correct me if Im wrong, but The City has an enacted agreement with the Police and Fire Pension Fund, which the Fund would no doubt seek to enforce in court if the City fails to make its additional pension payments.  Because: obviously?

Beyond that, Council could absolutely lock itself in by borrowing money to make the additional pension payments on an up-front, net present value basis. The City would be required to make debt service payments each year – and the additional .68 millage revenue would be the funding source.

Regrettably the most “reasonable” solution is the one outlined in the 2015 agreement – with the City and the Fund paying additional money over the next decade to bring the fund to a rationally funded condition ASAP. 


The problem with any property tax increase - not specifically the one you're talking about - is that future mayors and councils can decide not to earmark the revenue for the pension, take holidays on the payments, etc. They can also screw around with it in some other ways. That's a major factor in how the mess got so bad in the first place. We took holidays when we shouldn't have, added additional benefits without adding revenue to pay for it, and then were too slow to deal with the problem after the Recession. I see no reason to think the same thing won't happen again.


You said it yourself in a rather reasonable statement,

“paying up front would save in the long run as debt is paid down sooner.”

Not sure what is opaque about that?

Nothing is opaque about it, and that's the major strength of the property tax. It's the only thing we could pull off today. I, personally, don't think the strengths outweighs the other weaknesses I've mentioned. I'm in the camp that the sales tax proposal is the "least bad" of the options.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Sunbeam on June 27, 2016, 12:58:34 PM
So many questions with no answers with the attitude of just "vote yes" THEN the city will create legislation, THEN the city will start negotiating with the unions, then we'll see what money can be saved, if any, THEN we'll see what promises the mayor will give unions, THEN, THEN, THEN, etc, etc, etc.

NO!!!

Ask---WHY hasnt the mayor started union negotiations already?  WHY isnt the mayor conducting union negotiation NOW?

There are alarms going off everywhere surrounding this issue and Public Trust from past behavior by city politicians is zero and this issue is screaming the same behavior all over again.

http://www.just-vote-no.com/
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: TheCat on June 27, 2016, 10:47:51 PM
Let's spell out our questions.

I'd like to round up the questions that can't be answered amongst ourselves for the mayor and the city council to answer. 

My three off the cuff questions:

1. What is the net cost of Curry's approach?
2. How much additional debt are we creating?
3. What do our annual payments look from 2045 - 2060
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: TheCat on June 27, 2016, 10:56:31 PM
Jacksonville Civic Council endorsed Curry's plan today.


http://jacksonville.com/news/metro/2016-06-27/story/jacksonville-civic-council-endorses-sales-tax-pension-costs (http://jacksonville.com/news/metro/2016-06-27/story/jacksonville-civic-council-endorses-sales-tax-pension-costs)
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: strider on June 28, 2016, 07:47:38 AM
Quote
other “key benefits” are the city would close the existing pension plans to new hires and put them in retirement plans that “reflect current market practices.” The city would negotiate with the unions on plans for new hires, which could range from pension plans to 401(k) style plans.

Another piece of the reform involves all employees to pay 10 percent of their paychecks for their pension benefits, up from 8 percent now.

Are the above "key benefits" cast in stone or up in the air dependent upon the whims of the unions and the City in some future negotiation?
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: whyisjohngalt on June 29, 2016, 01:11:44 AM
Even communities like Detroit and Birmingham, that have actually filed for bankruptcy, are still seeing heavy reinvestment in their downtown cores.

Why is bankruptcy off the table for the city?  We're being held hostage by the debt and promises of the past without any budging on their side to negotiate reasonably.  Everyone I know had their 401(k)'s and retirement plans destroyed around and after 2008.  Why should "public servants" be immune to economic conditions that affect everyone else?  If not, then bankruptcy and starting over is a better solution otherwise we'll be having the same discussions in 15 years anyways.

Or better yet, don't file bankruptcy and quit paying them akin to foreclosure.  Deals go south all the time and just because the deal was by "the city" didn't make it bulletproof.  At this point, it's pretty obvious that mistakes were made on micro and macro levels that made the city's pension promises deliverable.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: mtraininjax on June 29, 2016, 02:49:12 AM
I say we raid JEA for 400 million, destroy their bond rating AND raise property taxes 30%.....sounds like a great Plan B.

Traffic will be much lighter on I-95 and I-10......as the tumbleweeds roll in.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: TheCat on June 30, 2016, 10:56:24 AM
The new report does not make Curry's plan look any better. It's worst than I thought.

Report Summary Here:

http://pdfsr.com/pdf/summary-milliman-report-6-28-16.pdf

Full Report:

http://pdfsr.com/pdf/coj-actuarial-curryplan-june2016.pdf
Modify message

(https://photos.smugmug.com/Politics/Mayor-Currys-Tax-Plan/i-LXBSSHq/0/XL/ScreenShot_ActuarialReport_Jacksonville_June_2016-XL.png)

This chart shows our annual payments for all three pensions. The purple line is Curry's sales tax plan. The question is, in what year will we have to "refinance" the pension again. I'm putting my money on 2035.

Just to reiterate, the city still has to find a way to pay $300 million for the next 15 years. Even when the sales tax kicks in, the general budget is still on the hook for hundreds of millions of dollars annually.

Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: mtraininjax on June 30, 2016, 12:12:52 PM
Time to bend over and take the shaft of a property tax hike. Its coming, Mousa and Stewart know how to get the "fee" passed to make it look like something we need, but which is a tax. This way Curry cannot say he created a new tax.

City cannot operate without new revenue and property values are not enough. Time to grab the ankles!
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on June 30, 2016, 12:54:51 PM
The new report does not make Curry's plan look any better. It's worst than I thought.

Report Summary Here:

http://pdfsr.com/pdf/summary-milliman-report-6-28-16.pdf

Full Report:

http://pdfsr.com/pdf/coj-actuarial-curryplan-june2016.pdf
Modify message

(https://photos.smugmug.com/Politics/Mayor-Currys-Tax-Plan/i-LXBSSHq/0/XL/ScreenShot_ActuarialReport_Jacksonville_June_2016-XL.png)

This chart shows our annual payments for all three pensions. The purple line is Curry's sales tax plan. The question is, in what year will we have to "refinance" the pension again. I'm putting my money on 2035.

Just to reiterate, the city still has to find a way to pay $300 million for the next 15 years. Even when the sales tax kicks in, the general budget is still on the hook for hundreds of millions of dollars annually.

The Jacksonville Business Journal talked a bit about this (which I found after discussing this issue with Arash last night).

http://www.bizjournals.com/jacksonville/blog/morning-edition/2016/06/report-currys-pension-plan-could-save-jacksonville.html

The chart is for the pension obligation only; it doesn't include the sales tax money. By the time the obligation starts rising again in 2030, the sales tax money will kick in. That would even out the amount that's coming from the city's general budget (which would still be at $300 million a year.)

I'm still in favor of this proposal as without it, the full obligation will have to come from the general budget, and that amount will shoot up well over $300 million a year and will stay there until about 2039. And that's if they don't take any more holidays, which can't be done with the sales tax.

For those who don't like the plan, it's time to think about what the alternatives are. That's a property tax, serious cuts, or some combination of the three solutions. I don't accept that cuts are feasible considering our level of service now, and would like to hear some real estimates on how much property tax will be required to get out from under this mess. I expect it ain't gonna be pretty for us property owners.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: strider on June 30, 2016, 01:40:41 PM
The new report doesn't make me all fuzzy and warm about the sale tax plan. If I understand what is being said by all, once the year 2030 is hit, the sales tax kicks in and so the higher payment is partially paid by the sales tax collected.  So, once again, what is the guesstimate amount the sales tax is hoped to bring in? It appears that while in the early years, we "save" some amount to use elsewhere, from say 2035 or so, we still will pay more than if we just continued as is? And what if the city somehow borrows against the future sales tax?  How will that effect the numbers from 2030 on? While the millions not having to be paid in the short term is called a savings, what is the real cost down the road? Is there a better way to get 50 to 70 million that will be "saved"?  Is not this still all dependent upon the cooperation of the unions and is that likely to happen?
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on June 30, 2016, 01:58:16 PM
The new report doesn't make me all fuzzy and warm about the sale tax plan. If I understand what is being said by all, once the year 2030 is hit, the sales tax kicks in and so the higher payment is partially paid by the sales tax collected.  So, once again, what is the guesstimate amount the sales tax is hoped to bring in? It appears that while in the early years, we "save" some amount to use elsewhere, from say 2035 or so, we still will pay more than if we just continued as is? And what if the city somehow borrows against the future sales tax?  How will that effect the numbers from 2030 on? While the millions not having to be paid in the short term is called a savings, what is the real cost down the road? Is there a better way to get 50 to 70 million that will be "saved"?  Is not this still all dependent upon the cooperation of the unions and is that likely to happen?

It appears that the plan is to stabilize the money coming out of the general fund at about $300 million a year until it's fully funded. So we "save" until 2030 with lower annual payments, and after that the sales tax covers the gap caused by the increased obligation. Not an elegant solution, but I don't see how we could go above $300 million a year and still fund basic operations (hell, I don't see how we make it work at $300 million).

It appears that even to stabilize at $300 million with an alternate plan, we'd need it to generate similar revenue as this plan, or make equivalent cuts. I'm all ears as to what that would shake out to in property taxes or cuts.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Non-RedNeck Westsider on June 30, 2016, 03:01:22 PM
I posted a bit ago on what I would consider a solid, sustainable solution that involves a tiered, comprehensive plan.  Yes taxes would be raised.  Yes, we would still need to pass a sales tax at referendum.  And Yes, there would be a tax/no-tax fee.

The beauty of it is that we be using the as-is line and be able to move it down about $150M by the end of Curry's term and then we would really see a surplus at the 30 year mark when the current plan would kick in assuming all pieces are still in place.

We need to face the reality that there really isn't any more we can cut from the city services.  (Don't get me wrong, there's plenty to cut, but no one will ever cut where it needs it.)

Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: strider on July 01, 2016, 11:15:24 AM
The new report doesn't make me all fuzzy and warm about the sale tax plan. If I understand what is being said by all, once the year 2030 is hit, the sales tax kicks in and so the higher payment is partially paid by the sales tax collected.  So, once again, what is the guesstimate amount the sales tax is hoped to bring in? It appears that while in the early years, we "save" some amount to use elsewhere, from say 2035 or so, we still will pay more than if we just continued as is? And what if the city somehow borrows against the future sales tax?  How will that effect the numbers from 2030 on? While the millions not having to be paid in the short term is called a savings, what is the real cost down the road? Is there a better way to get 50 to 70 million that will be "saved"?  Is not this still all dependent upon the cooperation of the unions and is that likely to happen?

It appears that the plan is to stabilize the money coming out of the general fund at about $300 million a year until it's fully funded. So we "save" until 2030 with lower annual payments, and after that the sales tax covers the gap caused by the increased obligation. Not an elegant solution, but I don't see how we could go above $300 million a year and still fund basic operations (hell, I don't see how we make it work at $300 million).

It appears that even to stabilize at $300 million with an alternate plan, we'd need it to generate similar revenue as this plan, or make equivalent cuts. I'm all ears as to what that would shake out to in property taxes or cuts.

Just like the mayor's office,  make comments that really do not answer any of the questions.  And that, in a nut shell, is what is truly wrong with the sales tax plan.  It isn't really a plan at all for if it was, there would be answers to the questions. 
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on July 01, 2016, 12:24:51 PM
The new report doesn't make me all fuzzy and warm about the sale tax plan. If I understand what is being said by all, once the year 2030 is hit, the sales tax kicks in and so the higher payment is partially paid by the sales tax collected.  So, once again, what is the guesstimate amount the sales tax is hoped to bring in? It appears that while in the early years, we "save" some amount to use elsewhere, from say 2035 or so, we still will pay more than if we just continued as is? And what if the city somehow borrows against the future sales tax?  How will that effect the numbers from 2030 on? While the millions not having to be paid in the short term is called a savings, what is the real cost down the road? Is there a better way to get 50 to 70 million that will be "saved"?  Is not this still all dependent upon the cooperation of the unions and is that likely to happen?

It appears that the plan is to stabilize the money coming out of the general fund at about $300 million a year until it's fully funded. So we "save" until 2030 with lower annual payments, and after that the sales tax covers the gap caused by the increased obligation. Not an elegant solution, but I don't see how we could go above $300 million a year and still fund basic operations (hell, I don't see how we make it work at $300 million).

It appears that even to stabilize at $300 million with an alternate plan, we'd need it to generate similar revenue as this plan, or make equivalent cuts. I'm all ears as to what that would shake out to in property taxes or cuts.

Just like the mayor's office,  make comments that really do not answer any of the questions.  And that, in a nut shell, is what is truly wrong with the sales tax plan.  It isn't really a plan at all for if it was, there would be answers to the questions.

Sorry, I must have misunderstood your question (you seem to be asking a few different things). If you're asking how much sales tax revenue we can expect, as I said, it's not included in the report. But according to the Times-Union:

Quote

The Milliman report does not calculate how much money the city would generate from the proposed half-cent sales tax starting in 2031, but a separate analysis by the city shows if sales tax revenue grows at a 2 percent annual rate, the city would generate about $2.5 billion from 2031 to 2049.

That would be enough to cover the additional cost for pension payments over that period.

...

Historically, sales tax growth in Jacksonville has exceeded 2 percent annually. For instance, revenue from the Better Jacksonville Plan’s half-cent sales tax grew at an annual average rate of about 2.6 percent between 2002 and 2015, a period that included the Great Recession.


http://jacksonville.com/news/metro/2016-06-30/story/report-proposed-pension-fix-gives-ammunition-supporters-and-opponents

If you're asking whether the plan will be more expensive than what we're doing now, the answer is yes, over the long run, it will be more expensive. The issue is that the city can't afford what we're doing now based on our current revenues, especially as the payments will continue growing until 2027. To work even as well as this one, we'd need to find a way to generate a comparable amount of revenue through property taxes.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: vicupstate on July 01, 2016, 12:49:34 PM
So this is akin to a couple that has trouble making their mortgage payments, refinancing from a 15 year mortgage to a 30 year mortgage. It lowers the payments now, but they pay much more over the long haul.

It that is the case, they ought to at least make extra principal payments to bring it closer to the 15 yea duration they started with. 

 
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on July 01, 2016, 12:54:09 PM
The new report doesn't make me all fuzzy and warm about the sale tax plan. If I understand what is being said by all, once the year 2030 is hit, the sales tax kicks in and so the higher payment is partially paid by the sales tax collected.  So, once again, what is the guesstimate amount the sales tax is hoped to bring in? It appears that while in the early years, we "save" some amount to use elsewhere, from say 2035 or so, we still will pay more than if we just continued as is? And what if the city somehow borrows against the future sales tax?  How will that effect the numbers from 2030 on? While the millions not having to be paid in the short term is called a savings, what is the real cost down the road? Is there a better way to get 50 to 70 million that will be "saved"?  Is not this still all dependent upon the cooperation of the unions and is that likely to happen?

It appears that the plan is to stabilize the money coming out of the general fund at about $300 million a year until it's fully funded. So we "save" until 2030 with lower annual payments, and after that the sales tax covers the gap caused by the increased obligation. Not an elegant solution, but I don't see how we could go above $300 million a year and still fund basic operations (hell, I don't see how we make it work at $300 million).

It appears that even to stabilize at $300 million with an alternate plan, we'd need it to generate similar revenue as this plan, or make equivalent cuts. I'm all ears as to what that would shake out to in property taxes or cuts.

Just like the mayor's office,  make comments that really do not answer any of the questions.  And that, in a nut shell, is what is truly wrong with the sales tax plan.  It isn't really a plan at all for if it was, there would be answers to the questions.

Sorry, I must have misunderstood your question (you seem to be asking a few different things). If you're asking how much sales tax revenue we can expect, as I said, it's not included in the report. But according to the Times-Union:

Quote

The Milliman report does not calculate how much money the city would generate from the proposed half-cent sales tax starting in 2031, but a separate analysis by the city shows if sales tax revenue grows at a 2 percent annual rate, the city would generate about $2.5 billion from 2031 to 2049.

That would be enough to cover the additional cost for pension payments over that period.

...

Historically, sales tax growth in Jacksonville has exceeded 2 percent annually. For instance, revenue from the Better Jacksonville Plan’s half-cent sales tax grew at an annual average rate of about 2.6 percent between 2002 and 2015, a period that included the Great Recession.


http://jacksonville.com/news/metro/2016-06-30/story/report-proposed-pension-fix-gives-ammunition-supporters-and-opponents

If you're asking whether the plan will be more expensive than what we're doing now, the answer is yes, over the long run, it will be more expensive. The issue is that the city can't afford what we're doing now based on our current revenues, especially as the payments will continue growing until 2027. To work even as well as this one, we'd need to find a way to generate a comparable amount of revenue through property taxes.

surely you see the paradox here?:
"the city can't afford what we're doing now based on our current revenues"
"If you're asking whether the plan will be more expensive than what we're doing now, the answer is yes"

That's not a paradox. The sales tax plan is more expensive over the long run, but will have more manageable payments year to year. On the current schedule, the year to year payments will be unmanageable in just a few years. The only way to fix it is more revenue (either property or sales tax), or serious cuts. Those are really the only outcomes here.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on July 01, 2016, 12:59:11 PM
Here is some quick math. If the sales tax generates $2.5 billion from 2031 to 2049, it works out to about $138,888,888 a year. This apparently will stabilize our annual payments to a still-staggering $300 million a year.

To generate $2.5 billion in property taxes between 2017 (the next budget year) and 2043 (when the current plan finally pays off), it would take $92,592,592 a year. 1 mill in property taxes generates $47.5 million, we're looking at a two mill increase at minimum. That's a 15% increase from our current rate.

This goes back to the advantages and disadvantages of the two solutions. With property tax we can keep paying more up front, which will decrease total cost over the long term. It's also seen as a more progressive type of tax. However, it's part of the general budget that's decided year to year, so there's no way to guarantee that future mayors and City Councils won't mess with it (which is pretty much how we got to this point in the first place). It'll also take a pretty substantial property tax hike, and all of that is on the back of Duval County residents and property owners.

With the sales tax plan, the money is committed only to the pension and can't be used for anything else, so no future governments can mess with it. The sales tax rate is also the same as we're paying now, so it will be more painless than a property tax increase, and a lot of the burden will be spread to people from the surrounding counties, visitors and tourists. However, it doesn't start until 2030 so it will cost more money in the long run.
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: strider on July 01, 2016, 01:58:36 PM
Quote
With the sales tax plan, the money is committed only to the pension and can't be used for anything else, so no future governments can mess with it. The sales tax rate is also the same as we're paying now, so it will be more painless than a property tax increase, and a lot of the burden will be spread to people from the surrounding counties, visitors and tourists. However, it doesn't start until 2030 so it will cost more money in the long run.

Unless of course the city leadership borrows against it.  What happens then?  Are the borrowed funds still "committed only to the pension"? What if they use it for something else? What is there to stop them from doing exactly that?  How does that effect the payments towards the pension plan?


Is there a better way to get the 50 to 70 million that will be "saved"?
  In other words, if this all this tom foolery with the sales tax is to gain 60 to 70 million for our city leaders to play with, is there a better way to get it separate from anything to do with the pension and would that be more or less expensive now and in 30 years than the Sales Tax plan will be?


Is not this still all dependent upon the cooperation of the unions and is that likely to happen? Everything I've seen showing "good" numbers from the Sales Tax plan also states changes in the pension plan.  I also have read that to date there is no commitment from the unions.  Is that true?  If so, and the unions do not agree, what happens with the sales tax idea?  Will we get a savings or just pay more now and later.

While this sales tax has been compared to going from a 15 year to a 30 year mortgage, I think it is closer to the idea of taking a credit card debt, transferring it at a very small interest rate for a period of time to save those funds.  Except you spend those funds, put more on the original card and then cry when the rate goes up like you knew it would all along.  Rather than helping in any way, you end up worse off than if you had just bit the bullet and made the higher payments to start with.   
Title: Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Post by: Tacachale on July 01, 2016, 02:33:22 PM
^If they were to borrow against the money, it would be as a trade-off for a larger sum now (to pay down more of the pension obligation) with bond debt (which can have more manageable rates than the pension). Some time ago there was a suggestion to borrow large amounts of money to pay down the pension faster, which made sense to me at the time, but apparently cities haven't been successful with it as the bonds haven't had consistent returns. At any rate, Curry has rejected that idea. I think they might still consider borrowing smaller year-to-year amounts to make bigger payments, but I haven't read anything about this in a while.

On the saving "50 to 70 million", I doubt there's a better way. The 50 to 70 million is "savings" spread through 2049 to stabilize payments around $300 million. Without this plan, the payments keep climbing to $382 million in 2027, and won't drop below $300 million until 2040. It would take much more than an average $50 million a year to get us through till then.

The sales tax plan is indeed like refinancing, from 24 years to 30 years. That has upsides and downsides. Keeping the current schedule would save money in the long term, but that doesn't help much if we can't afford the short term.