(Bloomberg) — A civic task force recommends that Jacksonville raise taxes to meet soaring retirement costs that have left a pension fund in Florida’s most populous city with 39 percent of what it needs to cover promised benefits.
The city of 836,500 in northeast Florida should also reduce benefits offered to new employees and change current employee benefits, the panel named by Mayor Alvin Brown said yesterday in a report.
Jacksonville, the 12th biggest U.S. city by population, ranks behind only Chicago and Philadelphia among the 25 largest cities in pension underfunding, Morningstar Inc. said in November. Municipal pensions across the U.S. face at least $1 trillion in deficits, according to the Nelson A. Rockefeller Institute of Government in Albany, N.Y.
The tax increase would add 0.5 percent to the current 7 percent combined city and state sales tax, producing $68 million a year in revenue, the task force report said. The panel proposed putting $50 million annually into the least-funded pension, for firefighters and police, bringing it to 80 percent by 2028, and allocating the rest for other employees.