The state of Oregon may be able to wring money out of its liquor and insurance businesses to help pay down the state’s big public pension debt.
That was one big take-away from the first meeting of a task force set up by Oregon Gov. Kate Brown. She wants the members to figure out how the state can raise $5 billion to help pay down the Public Employee Retirement System’s $22 billion debt.
Task force members discussed a broad variety of ideas. They ranged from surcharges on such things as hunting licenses to the sale of public property. But there was a lot of early attention focused on the Oregon Liquor Control Commission and SAIF, the state-owned workers compensation insurer.
“We want to look at OLCC,” said Donald Blair, a former chief financial officer for Nike and the chairman of the task force. “We want to look at SAIF. There are four or five of these things that are inevitably going to be part of our next meeting.”
He and others said both operations could be partially or wholly privatized. Cory Streisinger, who once headed Oregon’s Department of Business and Consumer Services, said the state has a number of options regarding SAIF that should be studied.
Both are big operations. SAIF covers just over half of the workers compensation market in Oregon and the OLCC is the sole purveyor of liquor in the state. It has a large warehouse operation in Milwaukie and distributes its products through a series of OLCC-licensed retail agents.
Blair said after the meeting that he is still keeping a broad focus at this point.
“We have a big job to do here and we’re really going to have to look at all of the different options,” Blair said. “That was the governor’s challenge to us. She said be provocative, be creative and we will try to do that.”
George Naughton, the state’s chief financial officer, came with a number of options the task force could study. They included such specifics as selling the state office building in Portland’s Lloyd District and moving the state functions to cheaper quarters – and the more general concept of seeing if state agencies had any unneeded water rights they could sell off.
Blair and the other task force members agreed early on that they would give the governor a number of ideas – and leave it to her to decide if they made policy and political sense.
The Democratic governor has come under fire from Republicans and many elements of the business community for not doing more to figure out ways to reduce the cost of the pension benefits.
This task force gives her a chance to come up with ways to reduce the pension debt that doesn’t involve changing benefits. She says she wants to get recommendations from the task force by this fall that she could take to the legislature next year.
One other difficulty she faces is that the PERS debt is likely to soon grow. The board that oversees the system will meet this Friday and is expected to lower the percentage it expects to earn on investment. That would trigger an eventual increase in the official estimate of the system’s unfunded liability.
Copyright 2017 Oregon Public Broadcasting