Author Topic: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal  (Read 17865 times)

strider

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #45 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?
"My father says that almost the whole world is asleep. Everybody you know. Everybody you see. Everybody you talk to. He says that only a few people are awake and they live in a state of constant total amazement." Patrica, Joe VS the Volcano.

Tacachale

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #46 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.
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Non-RedNeck Westsider

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #47 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.)

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strider

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #48 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. 
"My father says that almost the whole world is asleep. Everybody you know. Everybody you see. Everybody you talk to. He says that only a few people are awake and they live in a state of constant total amazement." Patrica, Joe VS the Volcano.

Tacachale

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #49 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.
Do you believe that when the blue jay or another bird sings and the body is trembling, that is a signal that people are coming or something important is about to happen?

vicupstate

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #50 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. 

 
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Tacachale

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #51 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.
Do you believe that when the blue jay or another bird sings and the body is trembling, that is a signal that people are coming or something important is about to happen?

Tacachale

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #52 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.
Do you believe that when the blue jay or another bird sings and the body is trembling, that is a signal that people are coming or something important is about to happen?

strider

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #53 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.   
"My father says that almost the whole world is asleep. Everybody you know. Everybody you see. Everybody you talk to. He says that only a few people are awake and they live in a state of constant total amazement." Patrica, Joe VS the Volcano.

Tacachale

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Re: 4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
« Reply #54 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.
Do you believe that when the blue jay or another bird sings and the body is trembling, that is a signal that people are coming or something important is about to happen?