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The Battle Lines Are Forming

Tom PattonLast week, during The Jacksonville Observer Radio Show, Randy Wyse, the president of the Jacksonville Association of Firefighters Local 122, told me he’d just come from a meeting at City Hall in which he said the union would not be negotiating on pensions.

“We feel like we’re in a position where we don’t have to,” he told me, and the WBOB audience.

It was a very interesting interview, and a point of view that I don’t think is heard very often.

The Administrator of the Police and Fire Pension Fund, John Keane, said the “bankrupting the city” argument would never hold with nearly 10 mils of headroom in the city’s taxing authority. Mr. Keane did not advocate raising taxes, but he also did not think the city was headed for bankruptcy without significant changes in the pension system.

About the two-tiered pension system, which has worked for the federal government for years, both Wyse and Keane said it was a basic fairness issue. People risking their lives in the same way deserve the same pension, was their contention. Very few people have been killed in the line of duty around the water cooler, Keane said.

Ok, fair enough.

But earlier this year, City Council President Richard Clark said at a Tiger Bay Club meeting that the police and fire unions don’t want the issue to go to impasse, because then it will be decided by the council. And the mood of the council right now is probably not tremendously favorable towards the pension funds not making some concessions for the good of the city budget.

From an historical perspective, the city has faced pension woes before. The opening paragraphs of the JCCI 2009 city budget study point out that in two previous studies of the city’s finances, pensions have been cited as a leading issue. In 1977 “The volunteers found Jacksonville’s financial position “to be basically sound, with the exception of the underfunding of its pension plans.” In 1992, “Pension underfunding was a problem, and the City was engaging in short-sighted financial planning without forecasting models to adequately plan for future needs.”

Now, pensions are an issue again, and it would seem that the battle lines are forming. On the one hand, the city is looking for every ounce that it can squeeze to avoid raising taxes in a recession. Next year’s budget process is already underway, and with the mayor’s race already taking shape as well, the financial health of the city is going to come under a great deal of scrutiny over the next 17 months.

On the other hand, the unions appear to be drawing a line in the sand. They seem to have very little interest in making any concessions, and don’t think the city’s financial health hinges on guaranteed payments to the police and fire pension fund. “The benefits are the same as they were two years ago, five years ago, 10 years ago,” Keane said during the show. “Nobody seemed to think they were too rich then.”

While the police and fire pensions are the most-often mentioned in this discussion, there are two other pension funds in play as well. The general employees fund and the corrections officers fund. All are underfunded at the current time, but the unfunded liabilities for the general employees fund and the corrections officers fund combined slightly less than the unfunded liability for the police and fire pension fund. It is also important to note that the unfunded liability for the general employees fund is about 5 times the liability for the corrections officers fund, according to the JCCI Report.

This pension issue is likely to be at the forefront of the upcoming Mayor’s and City Council races, along with the rest of the city’s finances. If, as Mr. Wyse said, the Firefighters Association “will not negotiate on pension benefits,” and the city insists, then an impasse seems likely, and no one is quite sure what the ultimate outcome of such a scenario might be.

No one is suggesting that those who put their lives on the line every day should be shortchanged. As was pointed out on Wednesday’s show, when everyone else is running out of the burning building, the firefighters run in. And when the shooting starts, and everyone is running away from the shooter, the police run towards him or her. We owe them more than just a huge debt of gratitude. But for better or worse, this is all going to play out in a very public arena against a backdrop of a long political campaign and an economy that has 10 percent of the nation’s population looking for a job and another likely 7-10% under- or self- employed. It’s unlikely very many of them are worrying about a pension.

Something tells me it’s not going to be pretty.

3 Responses »

  1. First let me say I am glad the Radio Station gave the Fire and Police Pension Fund the opertunity to be on the show.

    I have lived in Jacksonville all my life Born in St. Luke's Hospital when it was on 8th and Boulivard.

    I recall years back that the City would borrow money from the Fire and Police Pension without intrest. Did they pay it back? Also city employees on pensions do not get Social Security so the city is not paying SS on these employees and employees with the city contribute around 7.5 percent to the pension. If the city ran the goverment as good as the Pension is managed they would not be in trouble.

    Before they mess with the pension funds they City Council and the Mayor's office needs to make some serious cuts. That's not cuts in service as they always say they need to do or go up on taxes.

    Take a Look at staff in the council offices and mayors take a look at the autorities JTA, JEA

  2. If the City had funded over the years the Pensions like they should have been, not letting the stock market keep the Funds flush, then when the stock market went down the Funds could have weathered the situation better. Why should the Police and Fire Unions make concessions now, when in the past, the City would not raise its Contributions to the Fund while the Stock Market was going good. Another point is why are necessary City functions being targeted first when the City could eliminate Millions of Dollars in, while things are going great it would be nice to have this, non-critical items are left on the budget.(Aides for Mayor and City Council Members-No money-don't need aides to determine what to do with the money.)

  3. The Mayor just lost a battle with the Jacksonville Young Democrats over Trail Ridge. Politically, fire fighters are light years ahead of them.

    As a matter of fact, the only political battles won by Peyton and Clark are the ones they got the fire fighters to fight for them, i.e. their campaigns, cecil field, amendment 1, etc. Neither would be in office right now if it wasn't for them.

    And we will see how many friends clark and peyton have when all of the other leaders in this city are lining up for election help. They are not going to want this hindering their own efforts.

    Hope everyone didn't buy their tickets to the Crist V. Rubio political battle. This one has the making to top it.