Finding the money

A task force created by Gov. Kate Brown is looking for ways to get $5 billion in new revenue into the state retirement system, which has $24.5 billion in long-term debt. A final report is due to the governor by Nov. 1. Brown told panel members to send her ideas, whether she or they liked them or not. Some of the possibilities, along with the range of revenue they might bring in:

• Selling the Portland Office Building: $10 million-100 million

• Selling or leasing state lands, unclaimed property and other property: $100 million-500 million

• Increasing estate taxes: $10 million-50 million

• Shifting more fire suppression costs to forest land owners: $10 million-50 million per year.

• Revising maximum state fund reserves: $10 million-$100 million

• Assigning capital gains tax above projections to PERS fund: $100 million-500 million per year during economic growth periods

• Taking interest earned on state funds from each fund and putting it in common pool: $50 million-100 million

• Increase games and introduce mobile phone games to the state Lottery: $100 million-$1 billion over 10 years

• More aggressive foreclosures and debt collection: $25 million-$95 million

• More aggressive enforcement of municipal court fines: $15 million-285 million.

Also under consideration, but without price tags yet:

• Maximize marketing, sale and distribution of liquor, excise taxes on beer and wine

• Require PERS participating employers to find new revenue in their operations

• Require PERS employers to submit plans to manage costs and cut cost growth.

Gov. Kate Brown’s special panel tasked with finding money to help pay for $24.5 billion in unfunded state benefits looked at ideas big and small during a meeting Friday to winnow suggestions on how to generate more money for the state’s cash-strapped Public Employees Retirement System (PERS).

Converting some cash reserves to investments, selling state land and buildings, pumping up liquor sales and getting cities to be more aggressive in debt collection and foreclosures were among the ideas discussed by the panel.

“What we are really trying to do is create a pretty good blueprint,” said task force member Donald Blair, the former chief financial officer of Nike.

The seven-member panel will meet Oct. 13 to prepare its final report, due on the governor’s desk by Nov. 1.

Officially named the PERS UAL Task Force, the group meeting at Portland State University was asked by Brown to come up with $5 billion in new revenue that can cover the retirement system’s unfunded actuarial liability (UAL).

Translation: Come up with ideas on how to shave 20 percent of the amount of money the state doesn’t have to pay for benefits it promised and, according to several court rulings, is obliged to pay.

Brown, a Democrat who is expected to run for re-election in 2018, has traded barbs with critics over the mission of the panel. Republicans wanted a simultaneous look at lowering benefit costs or getting retirees to pay more voluntarily.

After the August meeting of the task force, Rep. Knute Buehler, R-Bend, wrote an opinion essay for the Eugene Register-Guard saying Brown had failed to lead on reforms.

Nik Blosser, Brown’s chief-of-staff, reminded the committee during Friday’s meeting that despite “breathless” media reporting, it’s sole role was to find innovations on the revenue side of the equation.

What Brown wants is a $5 billion brainstorm — and the ideas didn’t have to be ones that the panel or the governor necessarily like or individually support.

Several members said it was difficult to get people to grasp the facts of paying a debt from the past. Members said that most of the ideas to get more money either cut into local funds, were opposed by significant numbers of interest groups, or would require tough decisions that the public might not like.

“Foreclosing on properties has difficult optics,” said Monica Enand, CEO of Zapproved, a Portland-based software company.

The next step is to rank the ideas for the governor and put as accurate a dollar figure on each one as possible.

Doing all this in the glare of public and private interests was on the minds of both Brown and the panel. Misha Isaak, general counsel to Brown, told the panel in August that they were not subject to Oregon’s public meetings law “whatsoever.” At the August meeting and again on Friday, the panel went into “executive session” at the end of the day and asked the public and journalists to leave.

Charles Wilhoite, a nationally know financial analyst, said during the open session that he was concerned that schools in particular could see redirecting some of their cash reserves as hurting their ability to borrow. It would also open the door for use of the money in ways other than PERS.

“We don’t want to do anything irrational to hurt (them),” Wilhoite said.

Schools needed to be brought in as partners and given ways to generate money that gives them as much control and confidence as possible, Wilhoite said.

“We want to have outcomes that change behaviors,” Wilhoite said. School management, teachers and parents will ask “‘does this make sense for us?’” Wilhoite said.

Blair told fellow members that the culmination of their work would not just be carrots, but sticks.

“We can’t do this all just with incentives,” he said.

— Reporter: 541-525-5280, gwarner@bendbulletin.com

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