Detail, east Portland photo, courtesy Miles Hochstein / Portland Ground.



For old times' sake
The bojack bumper sticker -- only $1.50!

To order, click here.







Excellent tunes -- free! And on your browser right now. Just click on Radio Bojack!






E-mail us here.

About

This page contains a single entry from the blog posted on January 17, 2013 9:21 AM. The previous post in this blog was Like clockwork. The next post in this blog is Ted Wheeler caught playing hide-the-ball. Many more can be found on the main index page or by looking through the archives.

Archives

Links

Law and Taxation
How Appealing
TaxProf Blog
Mauled Again
Tax Appellate Blog
A Taxing Matter
TaxVox
Tax.com
Josh Marquis
Native America, Discovered and Conquered
The Yin Blog
Ernie the Attorney
Conglomerate
Above the Law
The Volokh Conspiracy
Going Concern
Bag and Baggage
Wealth Strategies Journal
Jim Hamilton's World of Securities Regulation
myCorporateResource.com
World of Work
The Faculty Lounge
Lowering the Bar
OrCon Law

Hap'nin' Guys
Tony Pierce
Parkway Rest Stop
Utterly Boring.com
Along the Gradyent
Dwight Jaynes
Bob Borden
Dingleberry Gazette
The Red Electric
Iced Borscht
Jeremy Blachman
Dean's Rhetorical Flourish
Straight White Guy
HinesSight
Onfocus
Jalpuna
Beerdrinker.org
As Time Goes By
Dave Wagner
Jeff Selis
Alas, a Blog
Scott Hendison
Sansego
The View Through the Windshield
Appliance Blog
The Bleat

Hap'nin' Gals
My Whim is Law
Lelo in Nopo
Attorney at Large
Linda Kruschke
The Non-Consumer Advocate
10 Steps to Finding Your Happy Place
A Pig of Success
Attorney at Large
Margaret and Helen
Kimberlee Jaynes
Cornelia Seigneur
Mireio
And Sew It Goes
Mile 73
Rainy Day Thoughts
That Black Girl
Posie Gets Cozy
{AE}
Cat Eyes
Rhi in Pink
Althouse
GirlHacker
Ragwaters, Bitters, and Blue Ruin
Frytopia
Rose City Journal
Type Like the Wind

Portland and Oregon
Isaac Laquedem
StumptownBlogger
Rantings of a [Censored] Bus Driver
Jeff Mapes
Vintage Portland
The Portlander
South Waterfront
Amanda Fritz
O City Hall Reporters
Guilty Carnivore
Old Town by Larry Norton
The Alaunt
Bend Blogs
Lost Oregon
Cafe Unknown
Tin Zeroes
David's Oregon Picayune
Mark Nelsen's Weather Blog
Travel Oregon Blog
Portland Daily Photo
Portland Building Ads
Portland Food and Drink.com
Dave Knows Portland
Idaho's Portugal
Alameda Old House History
MLK in Motion
LoveSalem

Retired from Blogging
Various Observations...
The Daily E-Mail
Saving James
Portland Freelancer
Furious Nads (b!X)
Izzle Pfaff
The Grich
Kevin Allman
AboutItAll - Oregon
Lost in the Details
Worldwide Pablo
Tales from the Stump
Whitman Boys
Misterblue
Two Pennies
This Stony Planet
1221 SW 4th
Twisty
I am a Fish
Here Today
What If...?
Superinky Fixations
Pinktalk
Mellow-Drama
The Rural Bus Route
Another Blogger
Mikeyman's Computer Treehouse
Rosenblog
Portland Housing Blog

Wonderfully Wacky
Dave Barry
Borowitz Report
Blort
Stuff White People Like
Worst of the Web

Valuable Time-Wasters
My Gallery of Jacks
Litterbox, On the Prowl
Litterbox, Bag of Bones
Litterbox, Scratch
Maukie
Ride That Donkey
Singin' Horses
Rally Monkey
Simon Swears
Strong Bad's E-mail

Oregon News
KGW-TV
The Oregonian
Portland Tribune
KOIN
Willamette Week
KATU
The Sentinel
Southeast Examiner
Northwest Examiner
Sellwood Bee
Mid-County Memo
Vancouver Voice
Eugene Register-Guard
OPB
Topix.net - Portland
Salem Statesman-Journal
Oregon Capitol News
Portland Business Journal
Daily Journal of Commerce
Oregon Business
KPTV
Portland Info Net
McMinnville News Register
Lake Oswego Review
The Daily Astorian
Bend Bulletin
Corvallis Gazette-Times
Roseburg News-Review
Medford Mail-Tribune
Ashland Daily Tidings
Newport News-Times
Albany Democrat-Herald
The Eugene Weekly
Portland IndyMedia
The Columbian

Music-Related
The Beatles
Bruce Springsteen
Seal
Sting
Joni Mitchell
Ella Fitzgerald
Steve Earle
Joe Ely
Stevie Wonder
Lou Rawls

E-mail, Feeds, 'n' Stuff

Thursday, January 17, 2013

Portland fourth worst in country for unfunded pensions

It's no news to regular readers of this blog, but the rest of the country is catching on to the time bomb known as public pensions in the City of Portland. A new study by the Pew Charitable Trusts shows that Portland's unfunded pension liability is the fourth worst in the country -- even worse than the State of Illinois's, which is saying a lot.

The real culprit in Portlandia is the insane police and firefighter retirement and disability "system," which has essentially no assets to back it up. This was Fireman Randy's handiwork in the legislature and City Council: a 100% unfunded pension plan, with benefits paid directly out of current property taxes every year. If a private company tried this, its managers would probably go to jail.

Just how bad is the unfunded liability of the city's police and fire pension "system"? It's hard to get a straight answer. The last figures the city is showing in public are from mid-2010 -- two and a half years ago. At that point, the official number was $2.53 billion. But it's hard to have too much confidence in even that outrageously high figure. The actuaries who come up with that number on the city's behalf tend to get switched around -- indeed, the city's just going out for bid for a new actuary now -- and when new ones come in, they are known to change the assumptions on which the estimates are based, so that it's hard to see a real trend. Sometimes we suspect that the actuaries tend to tell the city bureaucrats what they want to hear, up to a point.

Meanwhile, the pensions owing to the city's other employees -- and for public safety officers hired in the last half-dozen years or so -- have some funding behind them. But a lot of it was borrowed money that still has to be paid back to banks and other investors; the latest figures we have show that about $261 million is owed to bondholders. So much for helping the municipal balance sheet. And even counting the borrowed money to the good, the latest figures, now two years old, show the partially secured plan with an unfunded liability of about $127.7 million.

Then there are health care and other benefits promised to retirees beyond their pensions; at last report, these added another $130 million or so to the totals. Depending on the category, those figures are between two and three and a half years old.

Our debt clock (in our left sidebar) has the city's unfunded liability to retirees as pushing $3.3 billion. There's a margin of error in that estimate, but we'd be shocked if the true number, as of today, was less than $3 billion. It could be $3.5 billion or more. The city's population is less than 600,000. It doesn't, as the real estate sharpies would say, "pencil out."

UPDATE, 1:45 p.m.: New estimates of the police and fire pension liability have just been released, and they show a $330 million increase in unfunded liability. Details here.

Comments (24)

Because I'm in a Thomas Nast mood, let the master describe what will probably happen. After all, history may not repeat, but it does rhyme.

http://www.vlrc.org/images/quotes.jpg

This is why I can't bring myself to buy a home in Portland (we are currently renting). There will come a time of reckoning, and I imagine the property owners will take the brunt of it--whether it be sky-high taxes or missing services.

Is there any place on the 'net I can go to easily determine the fiscal responsibility of neighboring communities? I'd hate to move to a smaller town only to find the situation is the same but on a smaller scale.

No city or town around here beats Portland for fiscal irresponsibility. But you might want to get out beyond the Tri-Met district boundary. There's going to be real hell to pay on account of that agency, very soon.

Jack, I'd like your perspective: Whenever I bring up the unfunded pension issue for police and fire, I am often corrected by some that say, "sure, they're currently unfunded (meaning that there is no cash in the bank to pay for them), but payments for police and fire pensions come from a dedicated property tax line item" - meaning that we should take comfort in the fact that at least future property tax funds are "ear-marked" specifically for this purpose, and that the City can levy more - up to $2.80 / $1,000 of assessed value to fill the gap as needed.

In the City "Financial Plan" you've provided a link to, it's unclear to me whether or not the $2.53 billion is the unfunded portion before or after accounting for future property taxes (up to $2.80 / $1,000) specifically for this purpose.

Either way, this is a lot like someone claiming that their outstanding car loan isn't really a liability because they've ear-marked part of their future paychecks to make the payments.

It's worse for Portland that Pew reports.

Pew has a tendency to overlook the issuance of pension obligation bonds, which have the effect of shifting liabilities from one set of books (pension obligations) to another (something like "general indebtedness).

Portland issued about $300 million in pension obligation bonds in 1999, which won't be paid off until 2029.

So, whatever Pew reports, you should add another couple hundred million to it.

But, what's another couple hundred million to the City of Portland? We'll just put in more parking meters to pay it all off.

Well, we're taking an extra $1B every biennium out of the state budget for PERS now. So I guess they'll have to throw in some more for PFDR?

No way is a a politician going to touch any public employee pension plan beyond surface manicuring and massaging numbers.

Career Politicians!
6B.
6C.

The commercial tenants will pay for this too.
Another nail in the coffin for Portland businesses.

So, whatever Pew reports, you should add another couple hundred million to it.

As this blog post notes, the current balance on the bonds was, at last report a few months ago, $261 million.

Lots of nails in the coffin for Portland businesses. Water rate increases added a few huge nails. We cannot afford a corporate designed system. If this council doesn't stop that PWB path and instead choose to maintain our current sustainable Bull Run water system and reservoirs, it may very well be the final nail needed hoisting a big red flag to anyone considering moving into our city.

I've always had a feeling of civic superiority when I read stories about cities and counties around the country and how they went bankrupt. I guess I had a built-in snob factor that we could never be as irresponsible as Jefferson County in Alabama or Harrisburg, Pennsylvania. Now I see that was wrong.

We're #4 in the country for unfunded pensions? In the entire country!??!! That's a level of incompetence I never thought we'd have here. I just assumed - even through all the spending scams, etc... - that there was an underlying love for Portland that would keep these politicians from sending the Rose City into a financial free fall.

If anyone has been wondering why Jack is grumpy about what's happened to Portland - now you know. Of course, Portland Polite diminishes it and tries to turn it into his problem, when it's our problem.

No wonder Sam and Randy chose this moment to get out.

Once again, Bojack scooped the "journalists" and (this time) the public policy institutes.

When's the Oregonian going to report this? You'd think it would be a page one headline. Will any of our local politicians who read this blog care to comment? Or it heads in the sand time.

My best guess is, the hand in the pot is a close relative of the hand that owns the 'news' media.

I have always thought our political class has been trying to make Portland as corrupt and tyrannical as Chicago.

It looks like they are well on their way.

Jack is seems to me that your analysis is accurate enought ( give or take a few hundred million $) But let's move on to what course of action should we follow now? I mean, what's done is done...how do we pay this down without totally breaking the local economy? Anybody?

The government has been rogue for some time now.
the people that run the government at all levels haven't cared about the effects their actions would have in the future for years.

Not much different from the banksters when they made shady deals profited immediately and just left the mess to be sorted out by others.

Government the exact same thing.

Tim, my sister lives in Chicago. Her garbage is picked up weekly and they even have days where they take old furniture and other large items. It's paid by property taxes. The trees on city property abutting their property are maintaind by the city. My two dying 100 year old trees on Portland city property abutting my property will cost me $5000 to remove. She was able to appeal her property taxes last year based on taxes levied on similar properties in her area and her taxes have been lowered. Try that here. And their neighborhood library is at least twice the size of our Hollywood branch. Not saying Chicago's not corrupt- but at least the people living their get something for their tax dollars. And I doubt Chicago politicians are anywhere near as sanctimonious as our's are.

Portland is actually a Sim City game being played by amateurs.

Unfortunately, this game has real consequences that last long after the they stop playing.

In Sim City you can cheat by holding SHIFT and typing FUND. It gives you a big influx of cash. You can do it at as many times as you want.

Sound familiar?

Hey Brian. I really liked Estacada and Newberg. I even know a home builder in Newberg, a real pro, if you are interested. [Shameless plug!]

It used to be that people chose to take public jobs for the security, not for benefits and salaries that were better than what they could expect in the public sector.

I have relatives who are living quite comfortably on PERS and feel entitled. My problem with that, is that I - and plenty of others - worked as hard or harder than they did and when we retire most of us have to rely upon what we were able to put away on our own steam. The gravy train stops when the job does.

I really resent having not only struggling to save any money for my own retirement with rising costs for everything, but to pay to support those who just happened to retire from public jobs, some having worked a fraction of the years I have. No matter how much was withheld from their paychecks over the years, it has to be nowhere near enough to cover the benefits they are now receiving.

Every word that NW Portlander said.

clinamen wrote: Lots of nails in the coffin for Portland businesses.

Related -- Standard Insurance is laying off again, this time 100: http://www.oregonlive.com/business/index.ssf/2013/01/standard_insurance_eliminating.html

They are (were?) the largest private-sector employer downtown.


Sponsors


As a lawyer/blogger, I get
to be a member of:

In Vino Veritas

Louis Jadot, Pouilly-Fuissé 2011
Trader Joe's, Grower's Reserve Pinot Noir 2012
Zenato, Lugana San Benedetto 2012
Vintjs, Cabernet 2010
14 Hands, Hot to Trot White 2012
Rainstorm, Oregon Pinot Gris 2012
Silver Palm, North Coast Cabernet 2011
Andrew Rich, Gewurtztraminer 2008
Rodney Strong, Charlotte's Home Sauvignon Blanc 2012
Canoe Ridge, Pinot Gris, Expedition 2012
Edmunds St. John, Bone-Jolly Gamay Noir Rose 2012
Dark Horse, Big Red Blend No. 01A
Elk Cove, Pinot Noir Rose 2012
Fletcher, Shiraz 2010
Picollo, Gavi 2011
Domaine Eugene Carrel, Jongieux 2012
Eyrie, Pinot Blanc 2010
Atticus, Pinot Noir 2010
Walter Scott, Pinot Noir, Holstein 2011
Shingleback, Cabernet, Davey Estate 2010
Coppola, Sofia Rose 2012
Joel Gott, 851 Cabernet 2010
Pol Roget Reserve Sparkling Wine
Mount Eden Chardonnay, Santa Cruz Mountains 2009
Rombauer Chardonnay, Napa Valley 2011
Beringer, Chardonnay, Napa Reserve 2011
Kim Crawford, Sauvignon Blanc 2011
Schloss Vollrads, Spaetlese Rheingau 2010
Belle Glos, Pinot Noir, Clark & Telephone 2010
WillaKenzie, Pinot Noir, Estate Cuvee 2010
Blackbird Vineyards, Arise, Red 2010
Chauteau de Beaucastel, Chateauneuf-du-Pape 2005
Northstar, Merlot 2008
Feather, Cabernet 2007
Silver Oak, Cabernet, Alexander Valley 2002
Silver Oak, Cabernet, Napa Valley 2002
Trader Joe's, Chardonnay, Grower's Reserve 2012
Silver Palm, Cabernet, North Coast 2010
Shingleback, Cabernet, Davey Estate 2010
E. Guigal, Cotes du Rhone 2009
Santa Margherita, Pinot Grigio 2011
Alamos, Cabernet 2011
Cousino Macul, Cabernet, Anitguas Reservas 2009
Dreaming Tree Cabernet 2010
1967, Toscana 2009
Charamba, Douro 2008
Horse Heaven Hills, Cabernet 2010
Lorelle, Horse Heaven Hills Pinot Grigio 2011
Avignonesi, Montepulciano 2004
Lorelle, Willamette Valley Pinot Noir 2011
Villa Antinori, Toscana 2007
Mercedes Eguren, Cabernet Sauvignon 2009
Lorelle, Columbia Valley Cabernet 2011
Purple Moon, Merlot 2011
Purple Moon, Chardonnnay 2011
Horse Heaven Hills, Cabernet 2010
Lorelle, Horse Heaven Hills Pinot Grigio 2011
Avignonesi, Montepulciano 2004
Lorelle, Willamette Valley Pinot Noir 2011
Villa Antinori, Toscana 2007
Mercedes Eguren, Cabernet Sauvignon 2009
Lorelle, Columbia Valley Cabernet 2011
Purple Moon, Merlot 2011
Purple Moon, Chardonnnay 2011
Abacela, Vintner's Blend No. 12
Opula Red Blend 2010
Liberte, Pinot Noir 2010
Chateau Ste. Michelle, Indian Wells Red Blend 2010
Woodbridge, Chardonnay 2011
King Estate, Pinot Noir 2011
Famille Perrin, Cotes du Rhone Villages 2010
Columbia Crest, Les Chevaux Red 2010
14 Hands, Hot to Trot White Blend
Familia Bianchi, Malbec 2009
Terrapin Cellars, Pinot Gris 2011
Columbia Crest, Walter Clore Private Reserve 2009
Campo Viejo, Rioja, Termpranillo 2010
Ravenswood, Cabernet Sauvignon 2009
Quinta das Amoras, Vinho Tinto 2010
Waterbrook, Reserve Merlot 2009
Lorelle, Horse Heaven Hills, Pinot Grigio 2011
Tarantas, Rose
Chateau Lajarre, Bordeaux 2009
La Vielle Ferme, Rose 2011
Benvolio, Pinot Grigio 2011
Nobilo Icon, Pinot Noir 2009
Lello, Douro Tinto 2009
Quinson Fils, Cotes de Provence Rose 2011
Anindor, Pinot Gris 2010
Buenas Ondas, Syrah Rose 2010
Les Fiefs d'Anglars, Malbec 2009
14 Hands, Pinot Gris 2011
Conundrum 2012
Condes de Albarei, Albariño 2011
Columbia Crest, Walter Clore Private Reserve 2007
Penelope Sanchez, Garnacha Syrah 2010
Canoe Ridge, Merlot 2007
Atalaya do Mar, Godello 2010
Vega Montan, Mencia
Benvolio, Pinot Grigio
Nobilo Icon, Pinot Noir, Marlborough 2009

The Occasional Book

Maria Dermoȗt - The Ten Thousand Things
William Faulkner - As I Lay Dying
Markus Zusak - The Book Thief
Christopher Buckley - Thank You for Smoking
William Shakespeare - Othello
Joseph Conrad - Heart of Darkness
Bill Bryson - A Short History of Nearly Everything
Cheryl Strayed - Tiny Beautiful Things
Sara Varon - Bake Sale
Stephen King - 11/22/63
Paul Goldstein - Errors and Omissions
Mark Twain - A Connecticut Yankee in King Arthur's Court
Steve Martin - Born Standing Up: A Comic's Life
Beverly Cleary - A Girl from Yamhill, a Memoir
Kent Haruf - Plainsong
Hope Larson - A Wrinkle in Time, the Graphic Novel
Rudyard Kipling - Kim
Peter Ames Carlin - Bruce
Fran Cannon Slayton - When the Whistle Blows
Neil Young - Waging Heavy Peace
Mark Bego - Aretha Franklin, the Queen of Soul (2012 ed.)
Jenny Lawson - Let's Pretend This Never Happened
J.D. Salinger - Franny and Zooey
Charles Dickens - A Christmas Carol
Timothy Egan - The Big Burn
Deborah Eisenberg - Transactions in a Foreign Currency
Kurt Vonnegut Jr. - Slaughterhouse Five
Kathryn Lance - Pandora's Genes
Cheryl Strayed - Wild
Fyodor Dostoyevsky - The Brothers Karamazov
Jack London - The House of Pride, and Other Tales of Hawaii
Jack Walker - The Extraordinary Rendition of Vincent Dellamaria
Colum McCann - Let the Great World Spin
Niccolò Machiavelli - The Prince
Harper Lee - To Kill a Mockingbird
Emma McLaughlin & Nicola Kraus - The Nanny Diaries
Brian Selznick - The Invention of Hugo Cabret
Sharon Creech - Walk Two Moons
Keith Richards - Life
F. Sionil Jose - Dusk
Natalie Babbitt - Tuck Everlasting
Justin Halpern - S#*t My Dad Says
Mark Herrmann - The Curmudgeon's Guide to Practicing Law
Barry Glassner - The Gospel of Food
Phil Stanford - The Peyton-Allan Files
Jesse Katz - The Opposite Field
Evelyn Waugh - Brideshead Revisited
J.K. Rowling - Harry Potter and the Sorcerer's Stone
David Sedaris - Holidays on Ice
Donald Miller - A Million Miles in a Thousand Years
Mitch Albom - Have a Little Faith
C.S. Lewis - The Magician's Nephew
F. Scott Fitzgerald - The Great Gatsby
William Shakespeare - A Midsummer Night's Dream
Ivan Doig - Bucking the Sun
Penda Diakité - I Lost My Tooth in Africa
Grace Lin - The Year of the Rat
Oscar Hijuelos - Mr. Ives' Christmas
Madeline L'Engle - A Wrinkle in Time
Steven Hart - The Last Three Miles
David Sedaris - Me Talk Pretty One Day
Karen Armstrong - The Spiral Staircase
Charles Larson - The Portland Murders
Adrian Wojnarowski - The Miracle of St. Anthony
William H. Colby - Long Goodbye
Steven D. Stark - Meet the Beatles
Phil Stanford - Portland Confidential
Rick Moody - Garden State
Jonathan Schwartz - All in Good Time
David Sedaris - Dress Your Family in Corduroy and Denim
Anthony Holden - Big Deal
Robert J. Spitzer - The Spirit of Leadership
James McManus - Positively Fifth Street
Jeff Noon - Vurt

Road Work

Miles run year to date: 115
At this date last year: 21
Total run in 2013: 257
In 2012: 129
In 2011: 113
In 2010: 125
In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269


Clicky Web Analytics