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What does 'fixing' the PERS liability really mean for the state of Oregon, and how we chart a course to make it happen?

ASHLEY HENRYEditor's note: This month's column was co-written with Caitlin Baggott Davis, executive director, North Star Civic Foundation, and Jesse Beason, president & CEO, Northwest Health Foundation.

Oregon is financially out of balance. The economy is growing while teachers get pink slips. We attract new businesses yet shutter libraries and cut back 911 services. What's happening doesn't make sense. And many of us, in our own ways, are trying to find solutions.

If we stay the course, Oregon will see persistent structural imbalances through 2037. That's 18 years of deteriorating conditions for schools, cities and counties. In the worst of those years, we face $2.7 billion in cuts. Every. Single. Year. That's just for local governments — schools, cities, counties—not the State. The impacts on classrooms, police response times, mental health care and other services Oregonians depend on are staggering.

These year-over-year cash crunches are partially the result of inadequate revenue. But the timing and depth of these imbalances is entirely driven by one ongoing public policy mistake: Oregon lawmakers have not addressed the Unfunded Accrued Liability, or UAL, tied to our old pension system. While we've fixed much of that system, we still have legacy bills to pay.

COURTESY: BBPDX - Caitlin Baggott Davis is the executive director of the North Star Civic Foundation.Without legislative action, the current plan to pay those bills is to cut $30 billion from public services, incrementally, increasingly, over the next 18 years. We can do better.

It's time to fix PERS. But what that really means — and how we do it —matters.

As legislative leaders and ballot measure campaigns trade ideas about pay cuts for public workers, investing windfall revenues, improving a partnership with Oregon businesses to invest in schools, and changing the payment plan for the UAL, we offer three pivots to help reach a collaborative solution.

COURTESY: BBPDX - Jesse Beason is the president & CEO of the Northwest Health Foundation.First, from state to local: We need to shift the spotlight from state budgets to local impacts. When we focus solely on the state budget, we miss the full scale of the issue. Let's recognize that governments are interdependent, and require cooperation to fix state policies that drive local fiscal woes.

Second, from biennial to generational: Oregon lawmakers balance budgets on a yearly or bi-yearly basis, out of step with the generational nature of this challenge. Short-term strategies to patch and cut will deliver a perpetual crisis, felt most deeply by those who've borne the brunt of decades of public disinvestment.

Lawmakers can get Oregon out of crisis now by setting a new timeline for digesting rising costs — to stabilize local services, expand the agenda-setting table to include diverse perspectives, and solve the problem for generations to come. Although the details matter, we can use the same financial management tools you might use to pay your home mortgage: invest in the principal early and often, make lower monthly payments over 30 years instead of 20, and balance interests of equity and liquidity. These are the kinds of asset and debt management decisions that responsible businesses make every day. Business leaders have a critical role to play in helping evaluate and innovate upon these options — and in leading the work to adequately fund public services.

Third, political to civic: The political process that led us here can't lead us out. New solutions require new perspectives and a larger, civic conversation. The legislature can commit this session to an accountable timeline to create solutions that match the scale of the challenge. On that new timeline, they can open a civic process that includes new voices and new perspectives.

Philanthropy may be uniquely positioned to partner with the legislature in this civic, bi-partisan work. Philanthropy can help depoliticize the process, help ensure that the expertise of communities of color and low income and rural Oregonians are centered and engaged, and support community leaders with impartial data and analysis.

All together, we need innovative thinking to connect the challenges we face to the opportunities that collective action could create for our economy, our workforce, and our families. Let's get to work.


Ashley Henry is the Chief Collaboration Officer of Business For A Better Portland. She can be reached at: This email address is being protected from spambots. You need JavaScript enabled to view it.


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