INVEST PENSACOLA This is a radical idea, one that really requires people thinking “outside of the box.” Why we don’t have the city pension funds invest in the Community Maritime Park by buying the CRA bonds?
The city general, fire and police funds total nearly $200 million. They lost more than $40 million of their value in the 2007-2008 fiscal year by investing in the stock market. Dick Barker, city finance director, recently told the Pensacola City Council that the pensions have lost another $40 million since Sept. 30, 2008. The CMP bonds would have a fixed rate of return and no risk.
The state of Alabama already does this.
The Retirement Systems of Alabama (RSA), which provides pension benefits to retirees through the Employees’ Retirement System, the Judicial Retirement Fund and the Teachers’ Retirement System, includes the government employees, teachers and judges, has invested from 2002-2008 $854.3 million in state and local projects and in Alabama companies.
Those capital expenditures of $854.3 million had statewide impacts of $1.947 billion in output, $620.9 million in earnings to Alabama households and 19,225 direct and indirect jobs. State and local governments benefited, too, with increases in state income taxes ($20.4 million), state sales taxes ($10 million), and county and city sales taxes.
In 2007 alone, investments by the Alabama state pension funds helped provide 5,836 jobs and $245 million in payroll in the state. The study of the Retirement Systems of Alabama by the Center for Business and Economic Research at the University of Alabama found that average annual pay for those 5,836 jobs was $42,046, more than 14 percent above the state average of $36,751 in 2007.
The investments include the Robert Trent Jones Golf Trail, Bell Microproducts, Daniel Corp., GKN Aerospace Services Alabama, Mercedes Benz U.S. International, Navistar Diesel of Alabama, U.S. Steel and Wise Metals.
Alabama isn’t the only state where pensions are invested in the state. The study, “The Economic Impacts of California Public Employees Retirement System (CalPERS) Investments on the California Economy,” by California State University showed the significant economic impact of similar pension fund investments on that state’s economy, adding approximately $8.5 billion to California’s economy. The investment dollars injected by CalPERS into the California economy generated over 124,300 jobs in 2006.
The Alabama State Retirement System has invested $180 million in downtown Montgomery, a fact CMP opponent C.C. Elebash pointed out in a January 2009 letter to the editor. The RSA owns eight downtown buildings in Montgomery which has a baseball park on its riverfront.
Pensacola needs the estimated 1,500 jobs that the Community Maritime Park will create. The city also needs the “win”–a project that will excite people and restore confidence in the local economy.
The city pension funds are sitting in account doing little for the taxpayers who have paid the millions to fund them. Why not invest in ourselves?