Applause rolled through the council chambers at Jacksonville City Hall when Mayor Alvin Brown vowed the time had come to tackle comprehensive pension reform “in a fair and sustainable way.”
“Jacksonville cannot follow the path of Stockton, Calif. and Harrisburg, Pa.,” Brown said in his July 2012 budget address, citing two cities that declared bankruptcy. “Jacksonville will not be part of America’s failures.”
Eighteen months later, Brown heads into a crucial phase of his term as he faces twin challenges that will be heavy political lifts — achieving pension reform and reviving development in the Northbank core of downtown.
Both will come with financial costs, though how much remains unclear.
On pension reform, Brown faces skeptics who question whether he can take the lead in getting it across the finish line.
And there’s mounting pressure on Brown to consider a tax hike to fix the pension dilemma, something Brown has steadfastly said he won’t back.
Former mayors Tommy Hazouri and John Delaney said that based on how Brown has handled decisions on the city’s budget, they expect the hard choices on pension reform will be made by the council.
Hazouri, a Democrat who served one term as mayor, said the City Council “bit the bullet” when it agreed to raise the property tax rate to prevent $61 million in cuts affecting services such as police, fire departments, libraries and parks.
The council took control of the budget-writing process after it rejected Brown’s first pension proposal. Brown said his plan would have saved $45 million in this year’s budget, but council members said he didn’t do enough to get on top of pension costs in future years.
Hazouri said Brown hasn’t been in charge of the budget process and that could spill over to the pension issue.
“I think he has the personality, but I don’t think he has the leadership skills to bring all the people together, especially the council,” Hazouri said. “He can’t just keep dumping things in the council’s lap. Otherwise, they’re going to make those decisions, and I think that’s where it’s going to end up. They’ll come up with their own plan.”
Delaney, a Republican who served two terms as mayor, said pension reform is shaping up as a repeat of the budget showdown last year, with City Council in the driver’s seat.
“They took over the budget and now they’re on the verge of taking over pension reform,” Delaney said. “Right now, pension reform is sort of out of the executive branch’s hands.”
He said the “question of the hour” is how Brown will handle the recommendations delivered by the 16-member pension reform task force that Brown established last summer as a way to find a solution.
The task force will make its recommendations next month, and its members have been considering a tax increase as an option.
Brown said he is optimistic about the task force’s work and he’s convinced the city will get a successful outcome.
“No other mayor in the history of our city has taken on a challenge like this in his first term,” he said. “I’ve been taking on the tough issues for the city and retirement reform is one of them. I am providing the leadership to get this done.”
‘A TALL ORDER’
Matt Carlucci, a Republican who served 12 years on City Council and was on Brown’s mayoral transition team, said the mayor should follow the advice of the task force, even if it means breaking his “no new taxes” pledge.
“There does come a point in time where you have to do what’s right for the city, what’s right for future generations and let the chips fall where they may,” Carlucci said.
He said the political fallout from failing to solve the pension problem would far exceed breaking the anti-tax pledge.
“He’s either going to break a promise by not solving the pension plan or he’s going to break a promise by raising taxes, unless he can find another way,” Carlucci said. “If he had to give a little on taxes, I think the majority of people in Jacksonville would swallow that.”
Brown said his stance on taxes isn’t going to change.
“I’ve always said that I’m going to look at every option and recommendation the task force comes up with,” he said. “Having said that, everybody knows I’m against raising taxes. That’s no secret. We’re still a fragile economy in Jacksonville.”
He pointed to the rise of foreclosure actions by Habitat for Humanity of Jacksonville as an example of how residents are struggling to stay afloat.
“We don’t have to raise taxes every time to solve the problem,” he said. “We say we’re a pro-business city. You’ve got a pro-business mayor. We want to attract businesses to grow and expand in Jacksonville.”
Eric Smith, a Democrat who served 20 years on the City Council, said Brown can keep his pledge on taxes and also drive the agenda for pension reform and downtown development.
“It’s a tall order to get both of those done,” Smith said. “He’s certainly not afraid of tough challenges. It’s problematic because both those things have to go through City Council, and that makes it an even taller order. But I certainly think it’s doable.”
City Council dealt Brown a double-barreled defeat last July when it rejected his first proposed pension plan and agreed on the same night to build the 2013-14 budget around a higher tax rate.
Smith said Brown needs to improve his working relationship with council members. But he added the mayor has built up a “strong credibility base” among residents.
“The average person out there like people who keep their word,” he said. “He said no new taxes, and he’s kept his word, amid a lot of criticism.”
As Brown heads into what he’s called the “final burst of momentum” for pension reform, he also committed this month to support an ambitious plan to rebuild The Jacksonville Landing on the downtown riverfront.
Toney Sleiman, a co-owner of The Landing, said he’d like to have an economic development agreement approved by City Council over the summer so he can start work by the end of the year.
“I’ve never seen the stars line up so well as they are today,” Sleiman said. “The mayor is 100 percent behind it and yes, I think he’s going to get it done. His heart’s in it, and he wants to change downtown.”
JAX Chamber President Daniel Davis is equally bullish, saying the Landing’s owners, Brown and City Council all want to see a successful downtown.
“All the entities want to bring something that’s winnable, and I think the mayor is going to have success in that realm,” he said.
But no costs have been attached yet to the redevelopment, which is in the concept stage. Gulliford said it surprised him that Brown guaranteed the project would get done when the city’s share of the project is unknown.
“How much is that and where’s it going to come from?” Gulliford said.
He lodged the same criticism of the pension proposal Brown gave to the pension task force last week.
Brown’s office said his proposal would reduce the city’s general fund payments to the Police and Fire Pension Fund by $130 million over five years and save $2.75 billion over 35 years.
His plan would require police and firefighters to pay more toward their retirement and make changes in their pension benefits. Brown also called on JEA, the city-owned utility, to contribute $40 million a year for 14 years to stabilize the finances of the Police and Fire Pension Fund.
Council President Bill Gulliford said Brown was trying to “create magic” with the JEA part of his plan.
“Let’s all be truthful,” Gulliford said. “It’s just not plausible. It wasn’t even negotiated in-depth [with JEA] and then you throw it out as an alternative? Come on. What kind of leadership is that?”
Brown said the talks with JEA are continuing.
“There are a lot of ideas going to the task force,” he said. “I think it’s unfair to the task force to come up with a judgment on something when it hasn’t been vetted out. Let them go through the process.”
Brown hasn’t decided when he will go back to City Council with his pension reform plan, but he said the city needs to act quickly so bond-rating agencies know the pension system is on the right track.
University of North Florida political science professor Matt Corrigan said Brown “deserves credit” for tackling a politically difficult issue in his first term, and Brown has a real opportunity because there is strong consensus for pension reform.
“Doing nothing is really not an option,” he said.
Bill Scheu, chairman of the pension reform task force, said Brown has shown leadership and been engaged with the task force’s work.
He said he doesn’t know if Brown will endorse all of the task force’s recommendations, but it’s not all on Brown’s shoulders to get long-term reform.
“I think all of us have to pull it off, and my feeling is that working together, we’ll come up with a comprehensive plan,” Scheu said. “I think we have to call it as we see it, and hopefully we’ll use judgment in that so we pull all the parties together.”
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