Providence lawmakers propose May special election for pension bond proposal

THE PROVIDENCE CITY COUNCIL is seeking state authorization to hold a special election on May 17 to let voters weigh in on a proposed $515 million pension obligation bond. / PBN FILE PHOTO/MIKE SKORSKI PROVIDENCE

PROVIDENCE – Letting voters weigh in on whether the city should borrow money to shore up its pension system was one of the key selling points for a proposed $515 million pension obligation bond.

Now, plans for a special election are taking shape, with the Providence City Council on Tuesday proposing a May 17 ballot question on the pension bond. The council will introduce a resolution at its meeting on March 3 asking the R.I. Secretary of State to authorize the nonbinding referendum ballot question, according to a press release. 

The council and Mayor Jorge O. Elorza have already thrown their weight behind the proposed $515 million pension obligation bond, which aims to solve the mounting crisis posed by an underfunded city pension. 

The proposal was first put forth by a working group of city leaders and community representatives who have concluded it was the best – and only – option to shore up the city’s $1.3 billion unfunded pension liability. If issued, the bond would boost the city pension above “critical status” of 60% funded by fiscal 2029 while contributing to its annual payments, which are rising faster than the city revenue, according to the Providence Pension Fund Working Group report.

- Advertisement -

Elorza pitched a similar idea last year that died amid criticism over what some saw as an overly risky venture. Elorza’s original proposal also did not include voter input, which is now being billed as a key selling point of the new iteration.

“If city government is going to borrow $515 million, we need to ask the public if they approve,” council President John J. Igliozzi said in a statement. “It is important for Providence residents to have this kind of input.”

State lawmakers must also sign off on the bond, which exceeds the amount of debt relative to assessed property value that state laws say a municipality can take on. Bills were introduced in the General Assembly earlier this month by Senate Majority Whip Maryellen Goodwin and Rep. Scott Slater, both Providence Democrats, but have not been scheduled for hearings as of Tuesday.

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

No posts to display

1 COMMENT

  1. This proposed $515M POB is a testament to the incompetence of Elorza, Igliozzi and the PVD City Council, all of whom should be removed from office immediately before they inflict any further damage on the PVD taxpayers. To even suggest a POB without a thorough vetting by real municipal finance professionals (all of whom would have told Elorza & Co a POB is a disastrous idea) is total insanity. The willingness of these elected officials to inflict a a $515M POB on PVD proves that they are nothing more than union puppets.
    To ensure that intelligent taxpayers have little chance of rejecting this financial fiasco at the polls, our devious Council is holding the voting referendum on May 17 before the Brown robots (who will vote “Yes” on anything proposed by a D, even though none of them will ever pay a nickel towards retiring this $515M debt) and the other PVD schooled students return to their real homes for the summer.
    When PVD eventually defaults on this 38Studios repeat, the State will have to bail out the bondholders (or let PVD file for bankruptcy which it should just do now and avoid this continually growing future mess), so EVERY RI taxpayer should be demanding that their State Rep and Senator vote against PVD issuing this POB. That’s RIght folks, in the final analysis, ultimately EVERY RI taxpayer will eventually be on the hook for $515M without even having the chance to vote on it.
    It will be interesting to see if Nellie Gorbea has the moxie to do the RIght thing for the taxpayers and not allow this to go to referendum. She’ll probably let it go to ballot, however, since, she is nothing more than a Token SoS anyway.