Bill White's financial acumen (cont'd)
BILL KING comments on the City of Houston's questionable use of pension bonds over the last five years:
In addition to simply borrowing money to make up existing shortages in the pension plans, since 2004 the city has been borrowing funds every year to make part of its current contribution to the pension plans. In doing so, the city has accounted for these borrowed funds as “resources” to “balance” its budget. In any other form this would be deficit budgeting, which is specifically prohibited by state law and the City Charter and obviously is a practice that cannot go on forever.
From 2004 to 2009, the city used about $225 million in pension bond proceeds in this manner. Without these bond proceeds, the city would currently have a deficit in its general fund. In other words, the city would be broke and could not pay its bills had it not used pension bonds to make part of its pension contributions over the last five years.
The massive unfunded pension liability has also attracted the attention of John Diamond on the Baker Institute Blog.
BLOGVERSATION: Unca Darrell.
Posted by Kevin Whited @ 01/24/10 09:48 PM | Print |
Previous Entry | Home | Next Entry
ADVERTISING
DISCLAIMER
All content © 2004-09, blogHOUSTON and the respective authors.
blogHOUSTON.net is powered by Nucleus.
Site design and Nucleus customization are by Kevin Whited.