March 1, 2022

PRESS RELEASE

City Council Calls for a Special City-Wide Election to Deal with the Pension Crisis

PROVIDENCE, RI – Providence’s City Council will take up legislation that calls for a May 17 special election and asks residents to weigh in on whether they approve of borrowing $515 million to help the city’s struggling pension system. The city’s Employee Retirement System (ERS) is one of the lowest funded pension plans in the nation. After working together for six months and studying options to stabilize the system, the Pension Working Group recommended Providence ask for state legislative authorization and voter approval to issue pension obligation bonds (POB). Legislation is currently pending in the General Assembly that would allow the city to issue up to $515 million in pension obligation bonds. The council’s resolution, set for a Thursday vote, would direct the Secretary of State to place the non-binding referendum question on the ballot.

“The pension crisis is a serious problem that impacts every taxpayer in Providence. If city government is going to borrow $515 million, we need to ask the public if they approve. It is important for Providence residents to have this kind of input and that’s the intent of the special election on May 17,” said Council President John J. Igliozzi. “The current financial climate and low-interest rates make a pension obligation bond a truly viable option to help mitigate a broken system,” added Igliozzi.

“In partnership with the City Council, I am excited to begin the process to schedule a special election for Providence voters to address our City’s pension crisis and pursue a Pension Obligation Bond,” said Mayor Jorge O. Elorza. “These problems have plagued our city’s finances for decades and if we do nothing, we will continue to edge closer each year to a new fiscal cliff. The pension obligation bond represents a real path forward to addressing the unfunded pension liability in a meaningful way, and it comes at the recommendation of a team of experts and industry leaders after months of research. I look forward to working with partners to educate Providence residents about this important topic before the special election on May 17.”

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