Identifying dedicated and sustained funding

Jacksonville’s public utility company, JEA, may be able to fund some improvements directly or through the franchise fee paid to the City of Jacksonville.

All the budget planning in the world means nothing without adequate infrastructure funding. The task of fulfilling the 1967 promises to pave roads, build sidewalks, and replace septic tanks with city water and sewer throughout Jacksonville were complicated by insufficient revenue. As Alton Yates observed in 2018, “the keeping of promises became such an expensive undertaking that nobody wanted to step up and ask for the kind of money that was necessary. We never really got the job done and still haven’t to this day.”

The likelihood of fulfilling the promises of consolidation is much greater if the mission is supported by one or more dedicated funding sources. Exclusivity is important. If the City of Jacksonville deploys funding sources which can be used generally, future elected officials may be tempted to divert revenue from its intended purpose of investment in neighborhood equality. Below are five possible financing options for consideration.

JEA

JEA would likely be responsible for any effort to extend water and sewer infrastructure to underserved neighborhoods, and the utility might also be a source of dedicated funding. While some legal and financial limitations may govern how JEA utilizes ratepayer dollars, the authority at times has embraced a role in funding community infrastructure needs. In April 2019, JEA leadership told City Council members that the utility would invest $1.2 billion in “expansion, renewal & replacement and environmental stewardship” between 2019 and 2024. The post-2024 projection was $3 billion for “unfunded community issues: $2B in Septic Tank Phase Out and $1B in alternative water supplies.” While much has happened in the time since that presentation, JEA remains the Jacksonville public institution with the most financial capacity to address water and sewer challenges.

A series of related options may be found in the tough financial decisions that Mayor John Peyton made in his second term. The three percent (3%) JEA franchise fee which Peyton championed generates approximately $40 million in annual revenue. Under Article 21 of the City Charter, the City Council may increase the franchise fee to six percent (6%) through a supermajority vote. While it is not clear how much additional revenue an increase would raise, the City of Jacksonville could utilize the nearly $40 million it is now collecting annually, any incremental funds generated from an enhanced franchise fee, or both. Assuming the City had operational capacity to perform the work, it could leverage these funds to meet more unfulfilled needs sooner rather than later.

Local Option Gas Tax

In June 2020, former Council President Aaron Bowman proposed to increase the City of Jacksonville’s local option gas tax as a way to address economic and infrastructure inequalities. Under state law, Florida counties can impose a “fuel tax” of up to 12 cents “upon every gallon of motor fuel sold.” The consolidated City of Jacksonville (which operates as a city and a county) currently levies a gas tax of six cents per gallon, with up to six additional cents of capacity available through a supermajority vote of the City Council.

If Council members were to agree with Bowman’s recommendation, COJ could use increased fuel tax revenues on transportation improvements like road construction, drainage, and paving – all part of the promises from the 1967 consolidation campaign. Alternatively, as Bowman has suggested, the additional gas tax revenues could replace current COJ expenditures and make funding available in the general budget to keep unfulfilled promises.

Tax Increment Financing

Yet another potential solution emerged from the decennial Jacksonville Charter Revision Commission (CRC) process. The CRC recommended creation of an Urban Core Development Authority. The purpose would be to “provide a singular focus on the infrastructure, governmental service needs and economic development of the Urban Core; establish and implement a master plan and coordinate public and private resources to address and resolve the poverty, socioeconomic and other disparities of the Urban Core” and ensure “the promises of consolidation to the Urban Core are finally met.” Under the CRC plan, the Urban Core Development Authority would encompass a geographic area stretching from Springfield west to I-295 and north to the Trout River.

One option would be for the authority to operate as a Community Redevelopment Agency (CRA). CRAs are tools that cities and counties use to revitalize neighborhoods. Once a CRA is created for a particular area, the local government caps the property values in that area to stabilize the tax revenue it collects. If property values rise and increase tax collections, those additional revenues are directed not to the local government but to the CRA, which can leverage the funds to improve infrastructure like roads and water systems, renovate older buildings, develop affordable housing, provide parking, and otherwise boost economic development.

Federal and State Infrastructure Funding

COVID-19 may finally motivate the federal government to partner with state and local governments in addressing nearly $5 trillion in unmet national infrastructure needs. The U.S. House of Representatives majority leadership has already introduced the $1.5 trillion Moving Forward Act, and the Trump Administration is soon expected to unveil its own $1 trillion infrastructure proposal. The House plan includes numerous provisions that could benefit Jacksonville’s effort to fulfill the promises of consolidation, including funds to rebuild unsafe schools, support local government infrastructure bonding, revitalize economically distressed neighborhoods, create or preserve affordable housing, and invest in safe drinking water and wastewater systems. Federal grant funding may also be available. City of Jacksonville officials can work closely with the Florida congressional delegation to make the federal government an ally in extending the benefits of consolidation to all citizens and neighborhoods.

The State of Florida should also participate in this effort. Every Duval County Legislative Delegation member has unmet needs in her or his district. In each annual session, the Florida Legislature typically appropriates substantial sums for transportation, water, wastewater, stormwater, and other types of infrastructure. The Florida Department of Transportation (FDOT) maintains a five-year work program, which includes Duval County projects. FDOT also administers the State Infrastructure Bank, which can assist regional and local governments with transportation improvements. Since COVID-19 has devastated sales tax revenues, the State of Florida may provide only limited assistance in its 2020-2021 budget year. But Council members and other advocates can use this time to inventory legislative district infrastructure challenges, review previous state budgets to determine where funding has or has not been deployed in the past, and examine relevant state work programs to see where those agencies plan to invest future infrastructure dollars. With that information, the City of Jacksonville can develop a clear list of future budgetary requests for each legislator who represents our community in Tallahassee.

Public-Private Partnerships

Finally, public-private partnerships (P3s) could help ensure long-term funding while assisting with cost and project management. With immediate reductions in sales tax collections and possible future declines in property tax revenue, state and local governments face fiscal challenges in the COVID-19 economy. Private investors can help public agencies overcome these obstacles by supplying capital to accelerate needed infrastructure projects.

When Tommy Hazouri became Mayor in July 1987, Jacksonville had the dubious distinction of being known in Florida and even nationally as “the city that stinks.” Paper mills, chemical plants and sewage facilities had long produced unpleasant smells. Chronic traffic jams at toll booths on Jacksonville bridges and expressways only worsened the city’s malodorous reputation. By the time Hazouri left office in July 1991, he had persuaded the City Council to adopt stringent anti-odor policies and convinced voters to remove tolls after nearly four decades.

Fast forward 29 years. Jacksonville is no longer the city that stinks. But it still has a dubious distinction: A half-century of unfulfilled promises that have prevented many citizens and neighborhoods from enjoying the full benefits of consolidation. Tommy Hazouri has decided once again to confront a decades-old challenge. For the sake of justice and equality, let us hope Hazouri’s second tilt with history is even more impactful than his first. As he said in his first speech as president, “this may be the most important work of our Council in our lifetime.”

Guest editorial by Chris Hand. Hand is a Jacksonville attorney who previously served as Chief of Staff at the consolidated City of Jacksonville and as Press Secretary for former U.S. Senator Bob Graham. With Senator Graham, he co-authored America, the Owner’s Manual: You Can Fight City Hall – and Win. Hand later authored the 50th anniversary update to A Quiet Revolution: The Consolidation of Jacksonville-Duval County & the Dynamics of Urban Political Reform. Some of this column is drawn from that book update.