PROVIDENCE – Providence voters overwhelmingly backed the city’s plan to borrow money to pay down its unfunded pension liability, according to unofficial election results as of Tuesday night.
Seventy percent of those who voted – about 3,500 people – said ‘yes’ to the proposed $515 pension obligation bond, which was the only question on the ballot in the special election. The 5,070 ballots cast – including those sent in by mail and during early voting – represented just more than 4% of the city’s 124,000 registered voters.
The backing of city residents in a non-binding referendum is one of several steps needed for the city to move ahead with the half-billion-dollar borrowing plan. The proposal also requires state-enabling legislation, which has already passed in the R.I. House but has yet to go before the R.I. Senate. The Senate Finance Committee is slated to take up the bill on Thursday.
Market conditions must also stay favorable, with a 4.9% cap in the interest rate at which the city can borrow, per the terms of the bill approved by the House.
Proponents say the proposal is the best – and only – way to make a meaningful dent in the city’s unfunded pension liability, which has swelled to $1.3 billion. Annual payments are also increasing faster than city revenue, threatening to siphon away funds from critical services if nothing else is done, according to the Providence Pension Fund Working Group report.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
