Author Topic: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal  (Read 17868 times)

Lamont Cranston

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #15 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.

FlaBoy

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #16 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.

thelakelander

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #17 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
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FlaBoy

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #18 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?

TheCat

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #19 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".

Tacachale

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #20 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, 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.
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brainstormer

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #21 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.

Tacachale

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #22 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.
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Tacachale

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #23 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.
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Charles Hunter

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #24 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.

Tacachale

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #25 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.
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Tacachale

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #26 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.
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Non-RedNeck Westsider

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #27 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.
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Rob68

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #28 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.

Tacachale

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #29 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.
« Last Edit: June 30, 2016, 03:29:56 PM by Tacachale »
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