Jacksonville elected to delay pension funding while paying $775M toward stadium

(The Center Square) – Jacksonville won't be directly using funds set aside for public pensions, but the city is shifting capital projects to a sales tax once designated for pensions to borrow money to pay toward at least $775 million in public funding for a $1.4 billion renovation of EverBank Stadium.

The public section of funding for the stadium is complex, as often happens with public subsidies for stadiums.

The plan includes $150 million from the city to prepare the stadium for construction and a $25 million credit for the Jaguars future purchase of a nearly 5-acre parcel of land along with the marina basin to build a development.

Jacksonville will then borrow $600 million through its City Improvement Plan for capital projects and pay that off with general fund dollars.

"The way the CIP works is the City pays the expenses of the CIP projects from various City accounts as the costs occur and at the end of each year the city borrows the amount spent on the projects and reimburses the accounts the funding originally came from," Jacksonville's explainer said. "The borrowing at the end of each year is then added to the City's overall debt and paid for in the City's debt service accounts."

The pension fund comes into play because the city has a 0.5% sales tax from the Better Jacksonville Plan Referendum that was set to shift from paying for capital projects to paying into city pension obligations.

The pension funding plan went into place due to deficits in the city Police and Fire Pension Fund and the City's General Employees' Pension Fund.

When the referendum was approved, that transition was supposed to occur after 2030. But it since had been bumped up to after 2026.

In order to have the capacity to borrow for the renovation, however, Jacksonville shifted its capital projects in the CIP and is paying for those with the sales tax, pushing the start of pension funding back to after 2030.

When asked how the CIP is repaid, the Jacksonville public affairs department sent copy from an online explainer saying the city borrows to replenish the account annually without specifying which accounts pay down capital debt.

"By moving the BJP projects from the CIP back to being funded by BJP sales tax revenue (cash), we are reducing the authorized and anticipated CIP debt from $1.3 billion to $700 million," the explainer said. "That leaves us with $600 million in borrowing capacity that will fund the stadium construction from 2025-2028."

The plan, however, calls for a $775 million increase in city spending without a corresponding cut.

The renovation is planned to start after the 2025 season and be completed before 2028. That means the team would host games in a limited crowd capacity in Jacksonville in 2026 and then play in central Florida in either Gainesville or Orlando in 2027.

Jacksonville's public affairs department, meanwhile, says that pensions will be fully funded in the plan.

"It is expected that the pension fund will be full funded in less than 30 years – an estimated 25 years give or take," the explainer said.

Economists who have studied publicly funded stadium deals have repeatedly shown the deals do not bring the promised returns and do not spur other economic activity in a community.

As economist J.C. Bradbury of Georgia's Kennesaw State University has pointed out, that is especially true of renovations to existing NFL stadiums at the same spot.

"There is no legitimate policy justification for devoting hundreds of millions of taxpayer dollars to upgrade an NFL football stadium," Bradbury told The Center Square. "The research on this is clear and unambiguous: Sports stadiums are not salutary public investments.

"City leaders were obviously aware that the evidence is not on their side, which is why they chose to ignore it rather than make a case based on sound research. Frankly, every council member who voted for his plan should be extremely embarrassed. It's negligent conduct."