Pinal County, along with many governmental entities in Arizona and across the nation, has unfunded pension liabilities. The area of public safety retirement has been a challenge in Arizona because the nature of the job allows for earlier retirement, and the state’s system has had management problems. Pinal cities and the county have been struggling to catch up with what they owe for a long time.
Overall, the county is almost $75 million short of funding its public safety retirement, and Sheriff’s Office pensions are about 50% funded.
The county is considering a proactive plan to borrow using bonds to pay off the debt to the Arizona Public Safety Personnel Retirement System. The idea is to stabilize the situation and save millions of dollars. That is a good thing for the taxpayers. As Assistant County Manager Leo Lew told the Board of Supervisors a couple of weeks ago, the action would avoid difficult decisions “for those who come after us.”
According to a financial consultant, Pinal would save about $40 million in today’s dollars by incurring debt service payments of $5.8 million a year for the next 18 years, instead of rising payments that would reach a high of $16 million by that time.
Other parts of the country have much bigger challenges because politicians, backed by public employee unions, often overspend and over-promise. Discussion in Congress about another COVID-19 stimulus plan have included suggestions that it might help bail out states with pension problems. Fortunately, Republicans in Congress have held the line, preventing Arizonans from having to help pay those bills.
The Pinal board is likely to consider a bond resolution soon. Funding these pensions now is something county residents could be proud of. And they should expect the state to hold up its end by managing the system well. Problems in other states point to defaults in the not-too-distant future, but this is Arizona.