While much has been written about the city’s employee pension fund and its financial problems, there’s a good reason why many who understand the geeky intricacies of public pension funding know the county has a much bigger problem than the city.
C. April Boling, a certified public accountant, former chair of the City’s Pension Reform Committee and former President of the San Diego County Taxpayer’s Association recently said: “Frankly, the County’s pension system is in much greater danger than the City’s pension system. The City has acknowledged its problems and is trying to fix them. The County is in denial and digging a much deeper hole without explaining where the billions needed to dig out are coming from.”
Her concerns are justified and falling on deaf ears at the county. Unlike the city, the county has two types of pension debt, pension obligation bonds (more than $1 billion) and unfunded liability owed directly to its employee pension fund ($1.4 billion at last count). The city only has the second kind of debt. The city has been paying that debt down – it has gone from $1.4 billion to just over $1 billion, including the city’s extra payment of $100 million on June 21, 2006. Conversely, the county, according to its latest financial report (CAFR), is paying interest only on its pension obligation bonds and paying less than accrued interest on its unfunded liability.
It’s as if the county learned not a single lesson from the city’s now-acknowledged foolish years of underfunding. Unfortunately, our children will pay for these mistakes and the quality of life in the county will suffer for years to come as the county is forced to cut its budget elsewhere to pay back this growing debt.