Let's say, just for the sake of argument, that the state implemented all the ideas in last week's report from Gov. Kate Brown's task force examining the unfunded actuarial liability in the state's Public Employees Retirement System.
The task force report makes for interesting reading. It also provides useful background for people on the issue. (A copy of the report is attached to the online version of this editorial.)
The members of the task force could not put a dollar figure on every one of their suggestions. But the final report identified funding opportunities of $4.2 billion to $6.4 billion that could reduce the unfunded liability over the next five years.
The report also suggested a matching fund that would encourage schools, cities and other government entities to accelerate their payments to reduce the unfunded liability. The idea is that those governmental bodies would find money from other sources (selling assets, for example, or redirecting reserves) to increase their PERS payments and that the state would provide a 25 percent match. The idea is that the governmental bodies could take advantage of the state offer and pay more now to possibly avoid crippling premium increases in the future. It's not clear where the money for the matching fund would come from, but if this plan were implemented, it could reduce the deficit by another $2 billion to $4 billion.
So, without offering a judgment on whether the suggestions are good policy or even feasible, the task force's ideas could possibly eliminate more than $10 billion of the deficit.
That would help — although we all know that it's extremely unlikely that all of those ideas is going to pass muster with the Legislature or whether the state's elected leaders have the will or the skill to implement them.
But the report still leaves a big missing piece, although this particular piece was outside the charge of the task force: Even if these ideas do succeed in knocking the unfunded liability to $15 billion or so, we need a plan for how to deal with that remainder.
And we don't have that plan.
In that regard, it was not encouraging to see what areas Brown told her task force not to consider. For starters, Brown told the group not to consider any changes to pension benefits. She could say, well, the Legislature went down that path in 2013 and got slapped down by the state Supreme Court. Maybe she also thought that taking benefits off the table for the task force could sharpen its focus, and to be fair, there is a certain logic in that.
But it also hasn't escaped our attention that changes to pension benefits would be unpopular with the state's public-employee unions, key allies in Brown's bid for re-election.
And here is where the leadership vacuum on the PERS issue is particularly vexing: It seems unlikely that Brown's union supporters would abandon ship for her Republican challenger, Knute Buehler, even if the governor started exploring alternatives to deal with the remaining liability. So she has some room here in which to maneuver with relatively little political risk: For starters, she could have asked the task force to take a fresh look at PERS recommendations that already have been floated, ideas that legislative lawyers have said may be able to withstand a legal challenge.
A press release from Brown last week said that her staff will be working on developing legislation for the 2018 session. We'll see if that translates into real leadership.
The governor would do well to mind this advice from her own task force: "We must challenge ourselves to objectively assess the facts, and then weigh the benefits and costs of acting on these options against the expected downsides of inaction." We've worked that "inaction" option pretty thoroughly. Time to try something else. (mm)