Residents of Norwich, Connecticut, will vote Tuesday on whether to gamble with their tax dollars by issuing bonds to cover swelling pension obligations, amid a record year for sales of such debt, Bloomberg News reported. Voters are being asked to approve issuing $145 million of securities to cover Norwich’s pension obligation, after retirement costs almost tripled in the past decade. With interest rates in the municipal market near historic lows, officials expect the earnings from investing that sum will exceed the borrowing cost. “In my 63 years of existence, 32 years of which was in the banking industry, I have never seen interest rates this low,” said Michael Gualtieri, treasurer of the city of about 40,000 in southeastern Connecticut. “I don’t know if we will ever see them this low again or perhaps in my lifetime.” Ninety-three municipalities have sold debt in 2021 to finance their unfunded pension obligations to retirees, the highest number year-to-date in records starting in 1999, data compiled by Bloomberg show. The combined amount of $11.4 billion is the most since a peak in 2003, which included a $10 billion Illinois sale. The push comes amid expectations that the Federal Reserve will announce a taper of its bond purchases this week and raise its benchmark rate from near zero next year.
