Proposals To Cut State Pension Deficit Could Cost Oregonians

An ambitious attempt by Gov. Kate Brown to reduce the state’s $24 billion public employee pension debt could hit Oregonians in their bank accounts.

That became clearer Monday when the governor's task force on the pension deficit unveiled several proposals put forth by the members.

Their ideas included putting a surcharge of as much as 10 percent on state fees — which range from hunting licenses to auto registrations — and allowing cities and counties to raise taxes on alcohol and tobacco.

“Economic pain would be felt by every fee-paying individual and entity in the state of Oregon," said Cory Streisinger, a former state agency director who sits on the commission.

But Streisinger and other task force members said the governor and her staff encouraged them to come up with out-of-the-box ideas for cutting the state's pension debt.

Brown said her goal is to reduce the unfunded liability of the Public Employees Retirement System by $5 billion. The governor is under pressure to find ways to tackle the deficit as she and legislators have been unable to agree on any changes in pension benefits.

The task force is also looking at ways to generate more money out of two state entities involved in liquor and workers compensation insurance.

Task force chairman Don Blair, a former chief financial officer for Nike, said the state could get out of the liquor business or find ways to wring more profit out of it.  Another idea, he said, is to raise beer and wine taxes, which he said haven't been increased in decades.

He also said that Saif, the state-owned workers compensation insurer, could reduce dividends to policy holders or be spun off to the private sector.

"There may be some impact to workers comp premiums," Blair said at the meeting, held at Portland State University. "One thing to note, though, is that Oregon has among the lowest workers comp premiums in the United States."

The task force is also looking at several ways to raise cash that don't involve higher costs to taxpayers. These include such things as selling off surplus property and redirecting a portion of legal settlements and other windfalls toward PERS debt reduction.

In any case, commission members said that lowering the PERS deficit would also help check the increase in employer pension costs, which would in turn help schools and other public agencies.

The task force is slated to deliver its report on PERS to the governor by Nov. 1. Blair said he expects to give the governor a series of options while leaving it to her to decide which proposals to take to legislators.

Scott Winkels, a League of Oregon Cities lobbyist who watched the task force meeting, said it's hard to raise large sums of money without affecting taxpayers and businesses in some way.  But he said it won't be easy to get the Legislature to go along.

"This is all a very steep hill to climb," he said.