Task force struggles to cut $5B from Oregon pension costs
Jul. 25, 2017
SALEM, Ore. (AP) — A special task force convened by Gov. Kate Brown is deciding how to cut $5 billion from the Oregon Public Employees Retirement System's $22 billion in unfunded liability without hurting the retirement benefits of government workers who draw from it.
Options that could be on the table after the group met Monday include selling some state lands and partially or wholly privatizing state agencies, with the proceeds going to the pension liability, the Register Guard reported (http://bit.ly/2tWqgOX).
When Brown announced the seven-member task force this spring, she stressed its importance, saying the public pension system's unfunded liability "looms over nearly every decision that we make." Pension costs for many Oregon public agencies are increasing by 20 percent this year and similar hikes are expected again in 2019 and in 2021, despite strong stock market returns.
The task force floated the idea of privatizing the Oregon Liquor Control Commission, the state workers' compensation agency or even Oregon Health & Science University. Other ideas include privatizing the state's data center in Salem, its state employee vehicle fleet or highway rest areas or selling state water rights to private interests.
The panel also discussed options that could put the squeeze on school districts or local governments' budgets to help pay down the liability.
One option could be to target entities with big "rainy day" reserves, or K-12 schools that receive unexpected new funds, and automatically direct some of that money to the pension crisis.
Similarly, the panel is eyeing timber harvest receipts from federal forests that some counties use to supplement their budgets, as well as big legal settlements — like ones agreed to by tobacco companies or Volkswagen — that now typically go to related causes, the newspaper reported.
The task force might also consider new surcharges on utility bills or on hunting and fishing fees, new local government taxes on alcohol or tobacco, or even a temporary statewide property tax add-on were all mentioned as possible cash generators for PERS.
Brown has set Nov. 1 as the deadline for the group's report and hopes to take some of their recommendations to state lawmakers next year.
Information from: The Register-Guard, http://www.registerguard.com