4 Reasons to VOTE NO on Mayor Curry's Tax Proposal
Arash Kamiar, MPP provides four reasons why you should consider voting against Mayor Curry's tax proposal.
Published June 20, 2016 in Opinion - MetroJacksonville.com
Mayor Curry explains how a tax is not a tax, even if it looks like a tax
On August 30, 2016, Jacksonville voters will vote for or against a 1/2 cent sales tax designed to fund Jacksonville's pension obligations. The vote is this year but the collection of the new sales tax will begin in 2030, which is the same year another 1/2 cent sales tax sunsets (see reason 4 for more information).
These are the first four reasons you should VOTE NO on Mayor Curry's Tax Proposal.
It’s a Tax
It takes someone with political savvy to convince a city that a tax is not a tax. Mayor Curry is political.He wants us to think his .05 cent sales tax proposal will have zero impact on our personal finances.
In actuality, Mayor Curry’s tax plan will cost each person in Jacksonville (including children) approximately $167. A family of four will contribute around $667 in tax payments every year toward Mayor Curry's tax proposal.
Kicks the Can Down the Road
Mayor Curry is spreading a "sky is falling" message all over town. It's typical politics to scare people to vote for a program.Fear mongering is a common tactic of Mayor Curry's team.
Despite the messaging blitz, Mayor Curry does not explain the net cost of his plan. Why? Because Jacksonville will likely spend a lot more money if he gets his way.
This blurry graph comes from the City of Jacksonville. Source
If we follow our current payment schedule, by 2045 the pension will be 98 percent funded (see scenario 1/green line in above graph), and payments will drop to below $50 million.
Under Mayor Curry’s sales tax plan, by 2045 the pension will be funded between 56 and 68 percent (see scenario 2/blue line and scenario 3/red line in above graph). Payments will ultimately increase to beyond $200 million and we’ll (read your children) will be in a much worst position.
Mayor Curry keeps comparing Jacksonville's pension issues to Detroit to scare the city into accepting his tax proposal. The thing about Detroit, they’re notorious for kicking the can down the road. Mayor Curry’s sales tax plan traps Jacksonville residents into making larger and larger payments for a longer period, which is exactly how Detroit became Detroit.
Still Constrains the General Budget
Take a look at the above charts. The numbers come from an actuarial report commissioned by Jacksonville (source). It compares our current pension payment schedule to two other possible plans under Mayor Curry's sales tax initiative.
Whether the tax passes or not, the city will pay the same amount each year through 2020. Then, from 2020 - 2030 Mayor Curry's tax plan does not come anywhere near securing the required amounts. His plan only provides a dubious $56 million (scenario 2) or $68 million (scenario 3) in budgetary relief. It's not free money, of course. The "savings" will come back to haunt Jacksonville with interest accrued vengeance half way through the plan.
Check out what happens in 2043, under our current schedule Jacksonville's payments are practically cut in half, and the pension is funded nearly 100 percent. Under Mayor Curry's tax plan, COJ's payments continue to increase, and the pension remains severely underfunded by as much as 44 percent. Put another way, balloon payments. Mayor Curry’s sales tax proposal is not unlike a balloon payment mortgage. Smaller payments in the short term will ultimately lead to massive and unmanageable increases in the pension obligation.
Convenient for the Mayor, the report cuts off after 2045 so we do not know how large the annual payment obligation will grow from 2045 to 2060. If the annual contribution grows by 4 percent each year starting from 2045, as it does between 2036 and 2045, in scenario 2, Jacksonville will have to pay as much as $320 million by 2060.
Mayor Curry's tax does not provide any relief. Over the next 15 years, tax or no tax, the budget will still be severely constrained. If the tax passes, the smaller payments will only lead to much larger and unmanageable payments.
Robbing Peter to Pay Paul
Mayor Curry’s proposed sales tax deprives residents of the option to renew the Better Jacksonville Plan (BJP) in 2030.
BJP is a $2.5 billion dollar voter-approved initiative that directly funded many large-scale developments, infrastructure improvements, environmental preserves, public parks and a slew of other projects.
By creating a new sales tax, Mayor Curry will rob funds that could have gone towards improving Jacksonville’s quality of life to pay for the pension obligation.
If Mayor Curry's sales tax passes, for 30 years Jacksonville will lack a dedicated stream of dollars to invest in the city’s infrastructure.
Written by Arash Kamiar, MPP
This article can be found at: https://www.metrojacksonville.com/article/2016-jun-4-reasons-to-vote-no-on-mayor-currys-tax-proposal