Faulconer Speaks Out Against Proposal to Increase Pension Debt

Matt AwbreyMatt Awbrey 1 Comment


San Diegans voted for Comprehensive Pension Reform to fix the pension problem now. In fact, much of the City of San Diego’s financial turnaround over the past few years is attributable to local leaders taking the bull by the horns and not putting off difficult choices to future generations.

Today, Kevin Faulconer continued to speak out against a plan that would postpone the City’s full pension payments and run up its pension debt by $335 million. Faulconer appeared on the Rodger Hedgecock Show to reiterate that issuing so-called pension obligation bonds — an idea most recently floated by mayoral candidate Bob Filner — is unnecessary and a step in the wrong direction. A recent analysis released by the San Diego County Taxpayers Association revealed this risky maneuver would cost millions of dollars that could otherwise be invested in San Diego neighborhoods.

As a senior leader on the City Council, Faulconer will continue to push for the implementation of voter-approved pension reform and oppose ill-conceived proposals to kick the can down the road.


Comments 1

  1. http://www.sandiegopolitico.com/

    October 9, 2012

    This week, Carl DeMaio attacked Bob Filner for supporting pension obligation bonds to reduce the City’s unfunded pension liability, despite the fact that Filner has repeatedly stated that such bonds are no longer necessary because of nearly $1 billion in reduced pension obligations as a result of a 5-year freeze on pensionable pay which he has committed to implement.

    Today, it was revealed that DeMaio himself endorsed the use of pension obligation bonds to reduce the City’s unfunded liability.

    In a news conference on Monday, DeMaio denounced pension obligation bonds:

    “Taking out another credit card to stretch out payments on the City’s pension debt and racking up hundreds of millions in additional interest is exactly the kind of risky move that got City Hall into the pension mess to begin with.” – Carl DeMaio

    Source: DeMaio news conference, KPBS, October 8, 2012

    But in a 2004 Union-Tribune commentary authored by DeMaio, he expressed support for pension obligation bonds as one measure to address the City’s unfunded pension liability:

    “After creating an independent Pension Reform Committee to provide advice on reforms, city leaders have severely watered down the panel’s recommendations…
    Combined with the anticipated sale of pension obligation bonds, these reforms would put the pension fund back on firm footing.”

    Source: San Diego Union-Tribune, August 13, 2004

    In a 2004 report from DeMaio’s Performance Instititute (funded by U-T San Diego publisher Doug Manchester), DeMaio offered a blanket endorsement of the reforms proposed by the City’s Pension Reform Committee, which included issuance of $600 million in pension obligation bonds to address the City’s unfunded pension liabilities:

    “The City’s Pension Reform Committee has been meeting and deliberating over a series of reforms to the Pension System. Based on the minutes and votes from the meetings of the Committee, the San Diego Citizens’ Budget Plan offers a blanket endorsement of their reforms – likely to be presented before the City Council on June 29, 2004…

    “…The Pension Reform Committee will likely propose that the City use Pension Obligation Bonds (POBs) to address the current liability in the Pension Fund. The current proposal is to issue a $200 million POB this year, and instruct the City Manager to find an additional $200 million in FY 2006 and $200 million in FY 2007.” (pg. 21)

    Source: San Diego Citizens’ Budget Plan, The Performance Institute, 2004

    “This is just one example of the overwhelming hypocrisy and dishonesty with which DeMaio approaches this election,” said Filner. “DeMaio himself supported these bonds when he was fronting for Doug Manchester, but now he’s attacking me for previously supporting them. Apparently, DeMaio has no shame and no memory.”

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