American cities and states have issued $72 billion of pension bonds. Here’s what that means

Link: https://www.marketwatch.com/story/american-cities-and-states-have-issued-72-billion-of-pension-bonds-heres-what-that-means-11621971315

Graphic:

Excerpt:

In his 2022 budget address, Milwaukee Mayor Tom Barrett wrote of his city’s predicament, “We are facing an unsustainable demand driven primarily by the pensions for public safety employees. We must begin preparing now, setting aside money to blunt the impact of the massive payments coming due in just two years.”

For many local governments, making a big deposit all at once and being able to budget for more manageable payments in the future, for both debt service and annual pension payments, can feel like a relief.

But there are many reasons it’s a bad idea, and one that many municipal-finance observers find problematic.

Author(s): Andrea Riguer, Katie Marriner

Publication Date: 26 May 2021

Publication Site: MarketWatch