Oakland Rejects Parcel Tax

Voters in Oakland on Tuesday overwhelmingly defeated a ballot measure that would have raised $60 million in parcel taxes.

Measure I drew only 48% of the vote. Officials have said it was important for improving the city’s stained budget, according to the San Francisco Chronicle. The ballot item needed a two-thirds supermajority to pass.

The measure was spearheaded by Mayor Jean Quan, whose popularity declined sharply in the wake of the recent Occupy Oakland protests and violence.

Voters also defeated another measure that would have given the city more time to fully fund police and fire retirement liabilities for employees who were hired before 1976. Oakland is struggling with rising pension costs after delaying payments for years.

The city started the trend of issuing pension obligation bonds to pay for liabilities 25 years ago.

In 1997, Oakland issued $436 million of taxable pension obligation bonds to pay unfunded liabilities for the public safety system.

The city also issued about $200 million of taxable POBs in 2001.

The 1997 bonds will hit final maturity this year and the 2001 bonds mature from 2011 to 2022.

As of January, Oakland had $282 million of POBs and $224 million of general obligation bonds outstanding.

Both of the pension obligation bond issues came after the city set the precedent for pension bonds when it issued them in 1985 with the help of Orrick, Herrington & Sutcliffe LLP as bond counsel.

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