Pension debt idea: Increase sales tax

Published On: Feb 12 2014 03:19:07 PM EST
Updated On: Feb 12 2014 07:21:08 PM EST

We're learning more about how the city of Jacksonville might solve its $1.7 billion pension mess: a tax increase.

JACKSONVILLE, Fla. -

The city's solution to its $1.7 billion pension mess could involve a tax or fee increase.

It's just one idea the retirement task force is listening to before it makes recommendations to the mayor and City Council.

There are several options on the table. One involves a property tax increase, the other money from JEA that the utility says could lead to a rate increase.

Another option includes increasing a fee residents already pay to JEA, and yet another idea is a possible sales tax hike to pay down the pension obligation.

That plan being proposed is to increase the local sales tax by a penny.

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It's a complicated proposal because it would actually mean having to increase property taxes for a year, then going back and lowering it in order for the new sales tax to kick in -- something the city and the task force are not sure can be done.

"There is a slight potential on a sales tax, but it's looking dim if the city is empowered to do that," said Bill Scheu, chairman of the task force.

As for the plan to increase the JEA franchise fee, which residents pay each month on their bills, it would double to help pay down the pension debt.

The mayor's idea is to use other JEA funds to pay down the debt, though JEA says that could lead to a rate increase. The mayor's staff does not think so and will present a more detailed plan next week that involves restructuring the JEA pension plan.

Regarding the idea to raise property taxes to pay off the pension debt, both the mayor and City Council President Bill Gulliford say that's a bad idea. That's about the only thing they agree on.

"I would absolutely abhor a property tax increase. That would be just, no," Gulliford said. "Sales tax, well, if you got to tax a better option than an ad valorem tax."

There will be some sort of change in the pension system, and the retirement board will make its recommendation later this month. Members are trying to get feedback from firefighters and the Jacksonville Sheriff's Office, but lack of information on a new pension plan is making that hard to get.

"Once it's done, at least people will know what they got," JSO Undersheriff Dwain Senterfitt said. "Right now, one of our problems is the uncertainty, because they are hearing everything is going to stay the same, to everything is going away, to everything in the middle, and uncertainty is sometimes worse than knowing something is bad."

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