JACKSONVILLE, Fla. — Action News Jax Investigates is looking into whether the City of Jacksonville can afford a new stadium following a new report by a non-profit government financial watchdog that says the city is spending tomorrow’s money today in an unsustainable fashion.
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“How grim is the Jacksonville financial picture right now?” Action News Jax Ben Becker asked Shelia Weinberg, the CEO of Truth in Accounting.
“It’s not a beautiful picture at this point in time,” said Weinberg.
A new report by Truth in Accounting on the financial condition of America’s 75 largest cities concluded that 53 cities did not have enough money to pay their bills, including Jacksonville, ranked 65th, receiving a D grade.
“They have given the citizens a false sense of security,” said Weinberg as the mayor’s office is expected to present a tentative stadium agreement to City Council on May 14 that could cost $1.4 billion with the city paying a sizeable portion – which does not include a possible entertainment district.
RELATED: Sources: City Council could oppose Mayor’s office spending $150m for Eastside as part of new stadium
Weinberg cites what she calls budget gimmicks, that make Jacksonville’s (and other city’s) annual budgets appear to be balanced because they do not include long-term pension and retiree health care compensation.
The analysis found Jacksonville needs $3.5 billion to pay its bills, primarily because of pension debt for the city, including Jacksonville police and firefighters - the city is currently in labor talks with both.
The report says Jacksonville had set aside only 47 cents for every dollar of promised pension benefits and only 11 cents for every dollar of promised retiree health care benefits, meaning that each Jacksonville taxpayer would have to pay $11,200 to get the city out of debt - raising the question if it can afford a new stadium.
RELATED: Jacksonville City Council approves $10 million for stadium designs and cost analysis
“If citizens knew the true financial condition of the city they might make different decisions on spending, taxing policy or building a stadium,” said Weinberg. “Truly balance your budget with a good plan to pay off these pension credit cards you have charged the taxpayers.”
City of Jacksonville statement on Truth in Accounting report:
“This biased report fails to account for the half-cent sales tax approved by citizens and the City Council in 2016. This surtax was always intended to begin in 2031 and over 30 years eliminate our unfunded pension liability, which was inherited by this administration after decades of pension fund mismanagement. Additionally, our long-held, high-grade bond ratings from major credit agencies show the City’s sound financial condition. The stadium deal presented to City Council will include a menu of viable funding options with the impact for each.”
Truth in Accounting statement to City of Jacksonville:
“The $3.5 billion “Money needed to pay bills” was calculated based upon the city’s reported “Unrestricted (deficit)”, which on the city’s 2022 was negative $2.5 billion. The major difference between the two numbers is that the city used outdated pension data, reporting the pension debt based upon 2021 data. At that time, the pension investments were performing well. The Truth in Accounting number is based upon September 30, 2022 pension debt, because that was the date of the financial report. Unfortunately, the pension investments were not performing well at that point in time. The city reported a cumulative deficit on $2.5 billion, but this deficit does not mean the government does not have the resources available to pay its liabilities due in the next year. Rather, it is a result of having liabilities that it has already been incurred, but government officials have chosen to pay overtime. Specifically, the government officials may not have included in past annual budgets, the full amount needed to finance incurred costs such as pension benefits and post-employment health care benefits. The government will need to include these amounts in future year’s budgets before the debt becomes due. In other words, future taxpayers will be burdened with paying these liabilities in the future.”
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