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Old Mendocino County Courthouse Around 1915

California County Pension Debt

 

Mendocino County's Pension Debt



Impact of the Pension Debt:

Lower Service Levels and Failing County Roads



Mendocino County's Unfunded Pension Debt


Choices -

Five Main Impacts

Local Taxes Consumed

Staff Cuts

Public Service Cuts - Failing Roads

Pressure to Raise Taxes & Fees

Loss of Local Control

 

Total Pension Related Payments as Percent of County Local Tax Revenue This shows what percent total pension-related payments are of the County's totsl local tax revenue over the past 20 years. Twenty years ago pension-related payments were 12% of local taxes - last year (2015) they were three times more - 36% of local tax revenue.

Local tax collections are the main contributor to the County's "discretionary" budget - County revenue that does not have to be spent the way the state and federal governments require. These funds can be spent for locally-defined projects and programs, they can augment those to which the state and federal governments contribute, they can pay down debt, or saved as a "rainy-day" fund.

The more the County has to pay towards its pensions - especially its pension debt payments (unfunded pension amortization and pension bonds) - the less it has to pay for services. The tripling of the share of local taxes consumed by pension-related payments reduces public services - changes of that magnitude must do so.

Here's one example of the impact.

County Roads

Condition of Roads - California's 58 Counties

This shows the "Pavement Condition Index" ("PVI") of all 58 California Counties as reported in the California Local Streets and Roads Needs Assessment - 2014 Update. (The link is to the online Executive Summary - you can download the report by clicking a button at the bottom of the Summary.)

This report is produced every two years by the California State Association of Counties, the League of California Cities, and other groups concerned with the state's road infrastructure.

Mendocino's PVI of 35 is the second lowest rating in the State. On average the county's roads are in the lower range of "Poor" condition. Since this is an average many of the County's roads must be in the "failed" category - requiring major investment to rebuild them.

The 2014 Needs Assessment states Mendocino County should spend at least $625 million over the next 10 years simply to prevent its road from "failing" - turning into rutted dirt roads bleeding erosion into the County's rivers and streams.

In the next 10 years Mendocino County is scheduled to pay over $200 million to reduce its unfunded pension debt. And - we'll be lucky if the County actually spends $60 million to repair its roads.

Many if not most of our County roads are DOOMED to fail.

There are many reasons our roads are in such bad shape - none more powerful than we don't have the money to fix them because we have to pay hundreds of millions over several decades to reduce unfunded pension debt that isn't supposed to exist.

 

NOTE 1: See How Pensions Are Funded for explanations of "annual normal contribution", "unfunded pension amortization", and "pension bonds".

 
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