Multnomah County is borrowing a whopping $128 million over the next week to pay its share of the cost of replacing the Sellwood Bridge. The official sales pitch for the deal is here. The bonds will be payable over 20 years (if they don't get refinanced, of course), and they'll be backed by the county's "full faith and credit," which is fancy talk for putting property taxes at risk. Interest costs alone are projected to run about $71.5 million over the life of the deal, and the interest the banks and other bondholders get paid will all be exempt from income taxes. The huge loan to the county gives observers a chance to take a look at the county's current financial picture. It isn't terrible, but neither is it great. The bonds are rated Aa1 by Moody's, which is three rungs below a top rating of Aaa. Given that the creditors can come after property taxes for repayment, that's not exactly a vote of confidence.
As of the end of 2011, the county had an unfunded pension liability of about $292 million, and as of the end of 2010, it had other unfunded retirement liabilities, for retiree health care and the like, of $154.5 million. Since these costs are going up rather than down these days, one can be fairly confident that the current figures for those liabilities are at least $450 million.
As for bonds and other loans, without the bridge replacement debt the county is in the hole for about $217.7 million, which will now jump to $345.7 million. Thus, combined with the retirement burdens, the county's long-term debt stands at about $800 million. The county's population is about 742,000, which means that the long-term debt works out to about $1,100 per person.
Of course, we who live within the City of Portland are staring at a city debt load of more than 10 times that amount, and so this additional mortgaging of the future may seem pretty small by comparison. But the county's debt, including the loan for the bridge, is another log on an already big pile.
And clearly the county's moving in the wrong direction. When we examined its debt picture five years ago, the county's debt per resident was about $545 -- about half of what it now. Doubling down on debt over a mere five years is a bad sign