PROVIDENCE, R.I. (WPRI) — The campaign for the June 7 voter referendum on Providence’s proposed $515 million pension obligation bond is heating up, with a new group raising more than $75,000 towards the effort to get the bond passed.
The Committee to Save Providence reported to the Board of Elections on Friday it has spent more than $23,000 in the past two weeks campaigning in favor of the bond question, including more than $6,000 paid to a Connecticut ad agency for a mailer and palm cards.
The group also paid veteran Providence political operative Luis Estrada $5,000 for field organizing, and $3,000 each to field organizers Holly Cekala, Carolina Pichardo, Jairson Ascencao and Maria Friedman.
Another $200 was spent at Walgreens for “gift certificates to distribute as raffle at high rises,” according to the new filing.
The group is being funded by three of the city’s major labor unions, each of which donated $25,000: the Providence Police FOP Lodge #3, Providence Firefighters Union, and the Laborers’ New England Region, which includes Local 1033. One additional $100 donation was reported from longtime political strategist Matthew Jerzyk, for a total of $75,100 raised.
Providence Mayor Jorge Elorza and City Council leaders have been pushing for the bond, which would allow the city to borrow $515 million to deposit into the fund that pays retirees’ pensions.
The pension account has an unfunded liability of more than $1 billion as a result of past administrations not putting enough money into the fund to support the future pension benefits promised in union contracts. City leaders argue the annual payments they now make to the pension from the city budget are increasingly chipping away at the ability to pay for city services.
But opponents of the pension bond say it’s too risky, as the city is betting that the interest rate on the debt will ultimately be lower than the rate of return on the money in the pension account.
“POBs should be avoided,” Republican national committeeman Steve Frias wrote in testimony against the bill earlier this week. “They are high-risk, highly dependent on timing, and can fail miserably.”
Elorza has acknowledged the risk, but argues there are no other viable options for the city to solve its pension woes.
“We have to balance that risk with the risk of doing nothing,” Elorza said at a recent event promoting the special election. Elorza and the City Council have also been holding community meetings to talk about the bond proposal.
A pension working group convened last year studied several options and landed at the $515 million bond, a lower number than Elorza had previously proposed.
It’s not yet clear if there’s an organized effort to defeat the bond; there are no filings yet with the Board of Elections indicating money has been spent on the other side.
The June 7 special election is a non-binding referendum, meaning the city does not have to borrow the money even if voters approve of the plan. But voter approval is a requirement of the enabling legislation being considered by the General Assembly that must pass for the city to borrow above its usual limit.
Legislation has been heard in committees in both the House and Senate, but no votes have been scheduled.
Ted Nesi contributed to this report.