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Old Mendocino County Courthouse Around 1915

California County Pension Debt


Mendocino County's Pension Debt

Impact of the Pension Debt:

Losing Local Control of Programs

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


Mendocino County receives a large portion of the property taxes and sales taxes collected in the County (cities, school districts, etc. get the rest). The County also receives a number of smaller taxes such as the "Bed Tax" collected from visitors to lodging establishments.

In 2000 the County's local tax revenue was $33.5 million. It grew 75% over the following 15 years to $58.7 million in 2014.

In contrast the County's total pension-related payments more than tripled in that same time from $6.8 million to $22.3 million. The County's pension-related payments are to the Pension Fund and to the owners of the County's Pension Obligation Bonds.

Pension-related County payments grew twice as fast as the County's local tax base. Over the long run it will continue to do so.

Local Taxes & County Pension Related Payments (Millions)

2000 2015
Local Taxes $33.5 $63.4
Pension Related Payments $6.8 $23.1
% Pmts of Taxes 20% 36%

About half the County's funding comes from the Federal and State governments and the other half comes from "independent-local" sources. The Federal-State funds have significant restrictions about how the money can be spent. They also often require some amount of "matching funds" from the County; these funds are also restricted as to how they can be used.

The truly discretionary part of a county’s budget is much less than the total of local revenue sources – half or even less. The County must pay most of its unfunded pension debt out of this part of its budget. More unfunded pension debt results in less local control over County resources.

I've been told by officials that they are able to get the federal and state governments pay a significant part of the County's pension-related payments. But so far no one has answered this question:

When you say the feds and state pay part of your pension-related payments -

  • Do they actually give you more money above and beyond the other costs of the program they are helping to fund, or
  • Is the County merely doing a "bookkeeping entry" to charge the cost of increased pension-related payments to a fed/state funded activity to make it "look like" they are paying for pensions but in fact what's really happening is there's less money to actually fund the activity?

There's no question that unfunded pension debt payments have rapidly increased and that is eating into the County's local revenues.

As more and more of our local tax base is diverted to pay unfunded pension debt our County has less and less money to fund locally-defined programs. The money from the feds and state come with huge cables attached. The County has to perform according to bus-loads of rules and regulations. But the money we have left from our local revenues - less the matching funds required by the feds and states - is what we have to fund our own programs.

The more we lose control of that discretionary part of our local revenues the less we can define our own progams - and the more our County becomes simply an extension of the federal and state governments.

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