Who will pay the unfunded liability? Taxpayers living on a median income of $43,000/year, or well-paid, well-heeled, entitled public employees making over $100,000/year?

5 Nov

It’s been said, the campaign begins the day after an election.  I like to hit the ground running. Here’s a letter I just sent to the ER. 

Butte County, like the city of Chico, is considering a Pension Obligation Bond.

POBs are a financing scheme that allows state and local governments to get the taxpayers to pay unfunded pension liabilities by issuing a bond guaranteed by tax revenues. Like CalPERS, POB proponents claim investments will pay for both the bond and the retirement fund. According to Oregon PERS manager Mike Cleary, “Some people call this arbitrage, but it’s not, it’s really an investment gamble.”

In fact, in 2013, Stockton and San Bernardino went bankrupt. According to the court, “Generous pensions awkwardly propped up with ill-timed POBs contributed to both debacles.”

In recent years, returns on POBs have often fallen below the interest rate paid by agencies to borrow the money, digging the liability hole even deeper. Nonetheless, they remain popular because they are instant money without voter approval.

Chico’s Unfunded Pension Liability has grown enormously over the past year – from $123,000,000 to $140,000,000, with another $146,000,000 interest – because of unrealistic employee contributions. Chico employees pay, at most, 15% for pensions that run from 70 – 90% percent of hundred-thousand-plus salaries. Meanwhile, taxpayers not only contribute a payroll share, but the annual “catch-up” payments come at the expense of city services – this year $11,000,000.

Who will pay the unfunded liability? Taxpayers living on a median income of $43,000/year, or well-paid, well-heeled, entitled public employees making over $100,000/year?

Let your elected representative know what you think of this scheme to leave the taxpayers holding the Pension Deficit Bag.

Juanita Sumner, Chico

2 Responses to “Who will pay the unfunded liability? Taxpayers living on a median income of $43,000/year, or well-paid, well-heeled, entitled public employees making over $100,000/year?”

  1. Dave November 5, 2020 at 10:03 pm #

    We have a new “conservative” majority on the City Council. Well, here’s their chance to prove they are really conservative and not bury the already over-burdened taxpayers and even future generations in more debt and taxes.

    These POBs are nothing but gimmick financing that will come back to hurt us all. Shooting these POBs out of the water should be their first order of business. However, one of the so-called conservatives (Morgan) has already voted to advance the idea. And two of the so-called conservatives (Morgan and Reynolds) have already proposed a sales tax increase earlier this year.

    Mark my words the other three will be no different, and they will do all they can to get us deeper in debt and increase the sales tax because all five are corrupt tools of special interests.

    And I dare the five “conservatives” to prove me wrong. You so-called conservatives, I dare you to be fiscally responsible and kill this POB nonsense.

    Mark my words, when it comes to fiscal responsibility they will be every bit as bad as the liberals. If you are a hard working taxpayer you will learn the hard way that these politicians are frauds. (But I repeat myself.)

    None of them represent you and they never will. They represent special interests and in their eyes you are nothing more than tax livestock.

    • Juanita Sumner November 6, 2020 at 6:01 am #

      Wow, that belongs on a t-shirt – “Tax Livestock – Moooo-oooo!” Cause I think the “conservatives” will slam dunk the POB and then put a sales tax on the ballot for a Spring special election.

      Ever dealt with a pissed off cow? We need to sink our new council majority knee deep in manure – start writing letters! Let’s turn the shit storm on them.

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