Rep. Tina Sablan, however, is not convinced that a pension obligation bond “is really the solution” to the government’s mounting obligations to the Retirement Fund — $200 million in unpaid employer contributions and over $570 million in unfunded liabilities.
“It might be the easy fix that some of my colleagues might want to champion because it looks like we’re doing something to save the Retirement Fund, but we’re talking about incurring more public debt — if we can get that bond,” said Sablan, Ind.-Saipan.
The bond proposal is a “cop-out,” she added.
Besides, she said, “our credit rating is so bad — we’re still at risk of defaulting on our [Commonwealth Ports Authority] bonds. We’ll end up paying through the nose [using] taxpayer money.”
She believes there is a better solution.
“What I think we should be doing is what we say we should be doing: cut the cost of government by getting our wages and salaries adjusted and realigned — make them make sense, pay people what they’re worth, cut the fat, outsource and privatize what we can. And then once we’ve done that and made a real good faith effort to cut government costs, then we can raise taxes.”
The Retirement Fund bond proposal is a legislative initiative, S.L.I. 16-10, which has to be approved by at least three-fourths of the members of each house of the Legislature present and voting. It doesn’t require the governor’s signature and, once passed by lawmakers, it will be placed on the ballot to allow voters to either ratify or reject it.
Most lawmakers, the administration and even Retirement Fund officials support a bond proposal.
Speaker Arnold I. Palacios, R-Saipan, earlier said that S.L.I. 16-10 will only authorize a bond flotation.
“It doesn’t mean we’re going to do it immediately,” he said. “We will wait until conditions are favorable. In the meantime, we want to take this issue to the voters so there will be more discussions about the problems of the Retirement Fund and the other options that will solve these problems.”
