A tale of two budgets

William Crum in the Oklahoman, on the suddenly newsworthy matter of municipal budgets:

Q: How much does Detroit owe?

A: Long-term debt could be as much as $20 billion.

Q: How does Oklahoma City compare?

A: Oklahoma City and its related trusts owe a little more than $1.3 billion. Property taxes are used to make payments on about $600 million in general obligation bonds, meaning taxpayers are on the hook for that money. Revenue bonds issued by related trusts are secured by specific streams of cash — for instance, payments on the $344 million owed by the Oklahoma City Water Utilities Trust are made from money collected for water and sewer services. Nine related trusts borrow to finance public services including airports, the fairgrounds, parking and economic development.

Q: One battle in Michigan is over whether bankruptcy could lead to cuts in pension benefits for retired public employees. Is this an issue in Oklahoma City?

A: Actuarial figures that came out last week show Oklahoma City’s pension system is 99-percent funded. That system covers civilian employees; fire and police are in state pension systems.

State pension funding is running about 65 percent, an improvement over recent years but still a bit short of where it ought to be.

Interestingly, Detroit’s 2013-14 budget calls for $1 billion in expenditures. Oklahoma City, with 100,000 fewer people, has a 2013-14 budget that calls for — um, $1 billion in expenditures. On the other hand, OKC is caught up on its debt service, and legally can’t run a deficit.







4 comments

  1. Dick Stanley »

    23 July 2013 · 10:53 am

    And OKC doesn’t have the local irritant (and pusher of public pensions) of the UAW, the outfit that makes GM a health insurance company that makes cars and trucks as a sideline.

  2. CGHill »

    23 July 2013 · 10:57 am

    Well, we did for a while; GM Oklahoma City Assembly opened in 1979 and was closed in 2006. (The building is now owned by the county and leased to Tinker Air Force Base, just to its north.)

  3. stixx23 »

    26 July 2013 · 12:27 am

    The Oklahoma Teachers Retirement System announced its portfolio returned over 17% this past fiscal year, twice the assumed rate. So I’m thinking the state’s overall funding level inched up quite a bit as OTRS is the largest of the six or so pensions (and the worst-funded).

  4. CGHill »

    26 July 2013 · 1:59 am

    OTRS runs about 55 percent; at this level, they’re thinking fully funded in 22 years, assuming 8-percent returns.

    (Source.)

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