Elorza launches voter education campaign ahead of pension bond ballot referendum

PROVIDENCE MAYOR JORGE O. ELORZA on Tuesday announced a education campaign aimed at helping voters understand the city's proposed pension obligation bond proposal ahead of an upcoming ballot referendum. /PBN FILE PHOTO/STEPHANIE ALVAREZ EWENS

PROVIDENCE – City finances are not the most interesting – or understandable – topic.

But lawmakers are trying to get voters excited about the not-so-sexy subject in order to win their approval on plans to borrow more than $500 million to shore up the city pension fund.

Mayor Jorge O. Elorza joined with city and state elected officials on Tuesday to kick off an educational campaign aimed at getting voter support on the $515 million pension obligation bond proposal.

Letting voters have their say on the borrowing plan through a non-binding referendum was one of the key components of the bond proposal, based on a report published by the Providence Pension Fund Working Group earlier this year. 

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The working group’s report served as the catalyst for the plan, which amends a similar idea floated by Elorza last year. Unlike Elorza’s prior pitch to borrow money to balance the city’s beleaguered pension fund, the new proposal includes several safeguards aimed at assuaging concerns over what some see as an overly risky venture. In addition to a voter referendum, the working group also called for capping the interest rates and setting a minimum annual contribution the city must continue to make toward its pension obligation.

These conditions appear to have swayed some prior critics, including Rhode Island Public Expenditure Council CEO and President Michael DiBiase, who is also co-chairman of the pension working group R.I. Public Expenditure Council. But whether they are enough to win over voters – or state lawmakers – is unclear.

Elorza on Tuesday framed the “Save Providence: Vote Yes on 1” educational campaign as a proactive one rather than a defense to existing voter concerns.

“This is an incredibly complex and complicated topic,” he said. “We want to assure all of the Providence community that we have been doing our homework.”

And in doing that homework, the city has found that its options to address its mounting pension crisis are limited. 

The city is eyeing a $1.3 billion unfunded pension liability and ballooning annual payments, which are rising faster than its yearly revenue. If issued, the pension bond would boost the city pension above “critical status” of 60% funded by fiscal year 2029, according to the working group report

“The risk of disaster from doing nothing is not just a risk but it’s a certainty,” Elorza said.  “We know if we do nothing the city will approach that next fiscal cliff, which is something we can’t allow to happen.”

The Providence City Council has backed the proposal through two separate resolutions calling for the special election and urging state lawmakers to pass the legislation needed for the city to exceed the regular state limits on municipal debt. 

Bills were introduced in the General Assembly by Senate Majority Whip Maryellen Goodwin and Rep. Scott Slater, both Providence Democrats, but are still in their respective chamber committees.

Several state lawmakers joined with Elorza Tuesday to express their support, including Rep. Carlos Tobon, D-Pawtucket, who highlighted the importance of the bond not just for Providence but for the entire state.

I am going to join this fight, working with legislators to understand why this is important to someone in Burrillville, Westerly and the urban core,” Tobon said.

As part of its education campaign, the city has organized a series of community meetings for residents to learn and ask questions about the pension bond. The first is slated for April 21, with three more in April and May.

The special election will be held June 7. City voters can apply online to vote by mail or vote early by emergency voting from May 18 to June 6. There will also be in-person voting from 7 a.m. to 8 p.m. on the day of the election.

Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.

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