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Opinion: About the PSPRS Payments

19 July 2017   Nettie Lamerson

About the challenges of PSPRS and the unfunded liability. 

1. Prop. 443’s language only guarantees the total proposed tax amount will be paid toward the PSPRS unfunded liability. It does NOT guarantee the current standard payment will continued to be paid. There is NO legal responsibility for the current or future Councils to continue making the current unfunded liability payment.  

2. It is highly improbable for the $78 million unfunded liability to be paid off in 10 years due to the past performance of the fund. Prescott’s projected PSPRS payment, according to Mayor Oberg, in 5 years will increase from $6.5 to $14 million. The projected revenue, if Prop 443 passed is $10 million. In less than 5 years Prop 443 monies will not cover the standard payment.

3. The PSPRS Board has paid $149 million to financial consultants while investment earnings for 2016 were less than $49 million. In 2016 the amount of pension payments exceeded the contributions and investment earnings by the fund.

4. The YES states the anticipated revenue from Prop 443 will be primarily paid by tourists (61%). Their research was based on credit card purchases. Many local residents use cash or debit cards. This means the actual percentage for residents is much higher and it also includes increasing taxes on groceries. The YES for Prop 443 doesn’t consider Prescott Valley or Chino Valley as local.  

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Nettie Lamerson
Prescott, AZ