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Spending, prioritities, tax rate top Monday's council debates

Posted: August 3, 2014 - 10:32pm  |  Updated: August 4, 2014 - 7:22am

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The Jacksonville City Council will set a tentative property tax Monday and is expecting to hear several last-minute proposals, including one that could open the door for an increase next year.

In a two-pronged attempt to resolve the city’s looming pension-reform issue and his own concerns with Mayor Alvin Brown’s proposed budget, Councilman Richard Clark plans to make a last-minute pitch for council to raise taxes.

While a vote to increase the proposed tax wouldn’t bind council to the higher rate, it would give them the flexibility to raise taxes next year.

Clark’s proposal will force the council to consider raising property taxes for the second year in a row, which could be a tough sell.

Multiple council members said Saturday they were hesitant, and in some cases opposed, to raising taxes after last year’s 14 percent increase.

Council President Clay Yarborough said Saturday he expects other council members to reveal their own last-minute proposals at Monday’s meeting. While details of those plans haven’t been revealed, they could influence how he and other council members vote on Clark’s plan.

”I need to know what’s all on the table, “ Yarborough said.

Clark wants to bump the tax rate to 12.26 mills from the current 11.44 rate. That would generate an additional $40 million and be exclusively dedicated toward the city’s pension debt.

Clark’s proposed tax hike would result in an $82 increase for the owner of a $150,000 home with a $50,000 homestead exemption.

Clark also wants to use $61 million that the Police and Fire Pension Fund has tentatively agreed to transfer to the city to resolve the $55 million in expenses that the Council Auditor has questioned in Brown’s proposed budget.

Clark said the increased property tax would be a dedicated funding source to more quickly pay off the city’s $1.65 billion debt to the Police and Fire Pension Fund, a major component of a pension-reform deal Brown and the pension fund tentatively agreed to earlier this year.

As part of the agreement, the city would make an annual $40 million payment, in addition to its minimum contribution required by state law, toward its pension debt for the next 10 years. It also calls for the pension fund to transfer $61 million it has in reserves to City Hall to cover the first 1 1/2 years of the $40 million annual commitment.

Brown, who opposes tax increases, has proposed JEA cover the $40 million payment each year. However, some have criticized that plan, and a pension-reform task force created by Brown has advocated a tax increase.

Brown has submitted the proposed agreement for council approval. If the council doesn’t pass it, Clark said the property tax would not increase.

Since his plan would secure funding for the city’s additional pension contribution, Clark wants to use the $61 million in pension fund reserve money to patch the $55 million in expenses that he and other council members have criticized.

The majority of that money is $37.7 million of the city’s current and anticipated reserve savings that Brown plans to spend. Council Auditor Kirk Sherman has warned that plan would bring the city’s reserves below a healthy level.

Sherman also has found a possible $11 million gap in contributions to the Police and Fire Pension fund and a potential $4 million shortfall in tax collection estimates.

Chris Hand, Brown’s chief of staff, has challenged Sherman’s findings and rejected council members’ assertions that Brown’s budget is unbalanced.

Hand also said Brown’s plan for the $61 million transfer would give “the mayor, City Council and community the time needed to determine a long-term funding plan to pay down our unfunded pension liability.”

“We stand behind the retirement reform agreement that Mayor Brown reached with the Police and Fire Pension Fund and introduced to the City Council in early June,” Hand said in a written statement.

The full council meets at 8 a.m. Monday at City Hall. They must make a decision: Monday is the state-imposed deadline to set the tentative tax.

Christopher Hong: (904) 359-4272

Comments (2)

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johnctaughtme
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johnctaughtme 08/04/14 - 12:47 pm
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Premium Member

In my opinion, "Mockingjay"

In my opinion, "Mockingjay" makes a good point, which the police officers and fire fighters should also carefully consider. "...the dedicated funding source for the pension fund must be a separate issue from the Budget issue."

While it may not be "Mockingjay's" primary concern, police officers and fire fighters could find themselves blamed for what amounts to a long-term general tax increase, and the cost of every project, function, and operation which somebody is trying to justify.

Mockingjay
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Mockingjay 08/04/14 - 06:34 am
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Premium Member

In the best interest of this

In the best interest of this community the dedicated funding source for the pension fund must be a separate issue from the Budget issue. After all the mayor never included any payment toward the fund in his proposed budget

The $61 million transfer too is a separate issue tied to the Pension fund Bill which is why the pension Bill is separate

Most council members already understand this

Mr Clark is the council liaison on the pension fund board, though I like the man I question, on this matter, where his loyalty lies.

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