Property tax or sales tax to fund city pensions?

Published On: Feb 25 2014 04:39:19 PM EST   Updated On: Feb 25 2014 08:40:34 PM EST

One way or the other, Jacksonville taxpayers could be asked to dig deep to bail the city out of its multi-million dollar pension crisis.


After months of discussion, the city's Retirement Task Force recommended Monday raising taxes to fill a $1.7 billion shortfall in funding Jacksonville employees' pensions.

If City Council and Mayor Alvin Brown sign off of the plan which would increase property taxes 1.5 mills -- $150 per year for every $100,000 of a property's taxable value -- the voters may be asked if they'd prefer a half-cent sales tax increase. 

Either tax option would bring in about $68 million in revenue per year.

"There (are) just a very limited number of options available," Council President Jim Gulliford said Tuesday.

The process of instituting a sales tax is convoluted.  Council would have to approve the property tax hike, then a referendum would be placed on the November ballot to create a half-cent local sales tax as dedicated funding for the city's public safety costs. If it passed, existing city revenue used to fund public safety would be dedicated to catching up on the pension debt.

If the sales tax passed, state law requires the property tax increase to be rolled back

If the sales tax referendum failed, the property tax would remain.

"I don't have  any reservation about calling a special council meeting, maybe discussing it... as a committee of the whole," Gulliford said. "But we need to discuss and need to go forward to see what the sense of the Council is, then act on it.  We can't let this thing languish."

While the Council president may be ready to act, the mayor is already on the record as opposing any tax increase. While Brown was out of town Tuesday, his chief of staff said the mayor is still pushing the idea of getting city-owned utility to contribute an additional $40 million per year to help pick up the pension tab.

"They recommended (increased taxes) as a preferred option," said Chris Hand. "They have made it clear that other options, such as the mayor's JEA proposal, very much remained on the table, so we are going to continue to work with JEA."

The pension discussions uncovered some other problems between the mayor's office and a member of the JEA board.

Last week, the mayor's office asked that the reappointment of JEA board member Peter Bower be delayed. Bower said it was because he would not bow to pressure from the mayor's office to support using additional JEA money help fund the city's pensions.   Gulliford said he won't wait for the mayor's recommendation and plans to bring up Bower's reappointment for Council approval.

"I think it's obvious," Gulliford said. "It appeared to be leverage, and I don't think that is appropriate."

The mayor's chief of staff says the office stands behind Bower and hopes the approval happens soon.


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