Red Ink … Proposed Arena Bond Would Add to City’s Rising Debt

Published on Saturday, 30 November 2013 09:49

Red Ink

Proposed Arena Bond Would Add to City’s Rising Debt

by Craig Powell

In January, city treasurer Russ Fehr issued a stunning report on the city’s expanding debt obligations: The city was approaching $2 billion in debt, half in outstanding borrowings, the other half in rapidly rising liabilities for employee pensions and retiree health care costs.

The city’s ratio of total debt to general fund revenue ($372 million) ranks among the highest in the country, which puts the city at greater risk of insolvency, particularly during economic downturns (like the one we’re slowing exiting).

Many Sacramentans have been facing similar challenges: rising debt and falling incomes. Most have responded by halting their borrowing and paying down their debt. That’s what rational people do. That’s not what our city has been doing. Instead, it has launched the biggest borrowing binge in city history with little to no regard for the future risks to basic services or taxpayers. City leaders seem to have one overriding preoccupation: how to find new ways to borrow more money—much, much more money.

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