Oregon’s Public Employees’ Retirement System has our beloved State teetering on the brink of a potential insolvency. Credit is due to the political acumen of the current and previous administrations that you were somehow not already aware of this hour of darkness upon us. You need not get sunk in the waterlogged, jargonish details of this long-foreseen, about-to-unfold catastrophe to understand that our ship of State is now plunging deeply and is taking below with it nearly every public service institution we have ever deemed valuable to our collective health, welfare and education.
We are told that the System’s official funding shortfall (debt we contractually owe) stands at a rising monolith of $24.1 billion. If we are honest with ourselves, however, looking at the System’s actual investment return versus its targeted investment return (which is used for calculating funding requirements), we unofficially owe closer to $50 billion! That means, using a back-of-the-envelope calculation, with a State population of four-million residents, each and every one of us today owes approximately $12,500, or approximately $50,000 of debt for a family of four.
With only a relatively modestly-sized, private-sector economic-base from which to grow, and already the nation’s second highest income-tax rates, not to mention skyrocketing property tax rates, it is crucial for us to acknowledge to ourselves that we as voters and taxpayers are going to have wear our fiscal life-jackets in order to survive the lethal deluge that our State’s own poor governance has set upon us. And, because of it all, even given the political environment of our day, we are going to have to try a new approach for the first time in over thirty-years. No one ever said surviving catastrophic, fiscal disaster would be easy. In fact, it will require an act of great, collective courage for each of us to accept a heretofore untried method of solving this delinquency for ourselves. The alternative to inaction is to otherwise accept our own destruction.
Besides a few changes to be negotiated in collective bargaining, there is no fiscal panacea to be found within the current PERS benefit structure which can be legally implemented to dramatically reduce the funding crisis. Solving the State’s short and long-term budget dilemma, therefore, rests entirely upon paying down the $50 billion PERS debt we owe without crushing public services (e.g., education) or ruining our economy, our jobs and our ways of life.
Heavy-handed, overburdensome taxes won’t do the trick. The predicted, actuarial future has arrived and, as it turns out, we are the generation who have inherited it. It is we who have been left holding the proverbial, half-empty bag. In this particular space and time continuum of twenty-first-century Oregon as we know it, we who are the sons and daughters and grandchildren have been left to handle this dire dereliction of a previous generation’s doing. It is we who must now do for ourselves the heavy, thoughtful lifting that is reflective of the greatness of our own generational selves. We have to raise our collective selves up, smartly, to resolve this daunting challenge.