Investigation finds additional $3 billion in debt for Oregon taxpayers

FOR IMMEDIATE RELEASE
April 27, 2010

BY JACOB SZETO, theOregonPolitico.com

Part 1 of 2

SALEM — New information has shown that Oregon’s state and local governments owe an additional $3 billion in benefits to their retirees.

Other Post-Employment Benefits (OPEB) debt has reached at least $3 billion statewide but will not be found on government balance sheets. The annual cost for OPEB is $300 million, of which only half is paid, resulting in budget deficits near $150 million every year.

OPEB are public employee retiree benefits other than pensions and can include benefits such as life insurance, stipends and healthcare. In Oregon, like most other states, retiree healthcare makes up the bulk of OPEB obligations. Often, these benefits are very generous because the real costs have been pushed to the future and ignored on government financial statements and budgets.

Until recently, it would have been impossible to know about these expenses and debts, but new accounting rules have shed light on the extent of OPEB. These new accounting standards have shown that governments have been running budget deficits for decades, accumulating massive amounts of debt that still remain off the books today.

Founder and CEO of the Institute for Truth in Accounting Sheila Weinberg questions why it took so long for these standards to come about and why they still don’t require the liabilities to be included on balance sheets: “They knew they should have been a liability on their balance sheets. Why did they not demand that these liabilities be revealed?”

Oregon Politico collected information from 100 of the largest counties, cities, school districts, and other government entities to capture a snapshot of the approximately 1,725 Oregon local governments and their OPEB liabilities and costs.

Cascade Policy Institute (OP’s parent organization) founder Steve Buckstein stated that getting a handle on OPEB debt will be an important part of Oregon’s effort to get its fiscal house in order. “Most Oregonians know about the massive PERS funding crisis, but until now they were unaware that more than $3 billion in additional public debt is looming in their future,” he said. Buckstein added that “the sooner we come to grips with this liability the better.”

Read the full article.


Jacob Szeto is Investigative Reporter for the news website OregonPolitico.com.

For more information, contact: Jacob Szeto
T: 503-477-5614
F: 503-242-3882

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Posted by at 01:00 | Posted in Measure 37 | 14 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Ron Marquez

    “Joe Citizen” will probably never know just how bad the PERS situation really is. If ever revealed, there might be enough public outrage to force the state’s leadership to (gasp !!) stand up to the public employee unions.

    Is there a Chris Christie in Oregon ? If you’re out there, step forward now because Oregon desperately needs you.

    • Steve Plunk

      Amen brother.

  • Bob Clark

    State government using the off balance sheet debt tool so demonized in the notorious case of Enron. But maybe somehow it’s for the children, wink wink.

    • Rob DeHarpport

      Yes, It must be only to benefit the children! That explains why schools are constantly laying off staff, cutting programs, deferring maintenance, shortening school years etc. etc.
      All of the above really increases the quality of education…. or does it? It’s time for this flawed system to bite the dust. The alternative is to join Vallejo, California.
      I can’t wait for the PERS defenders to comment, it will surely be interesting and entertaining.

  • Tea’d

    How many of us retire with more money than we made while working at a job? I don’t know a single person working in the private sector but I sure know plenty of teachers that earn more at the taxpayer’s expense than they did when they were teaching school. Something needs to be done about the contracts, the budget and the money that is hidden from citizens. Good grief, what is next? I agree if a real clone of Chris Christie lives in Oregon, please come forward!!

    • eagle eye

      Plenty of retired people have private income that exceeds their “private income” salary.

      It’s easy. The way to do it is to put away enough of your money while you’re working. Say, 15-20% of your gross salary, starting when you’re young.

      And yes, you have to invest it well.

      • Can’t hide

        Spoken like a true retired PERS trough feeder.

        • eagle eye

          But I’m not retired, and I’m not enrolled in PERS. I’m just telling you how the world works. If you want a good retirement, save for it.

  • a retired professor

    It’s hard to feel too sorry for all of these local government jurisdictions. Understanding the costs of these obligations is not beyond the capability of ordinary town and school district accountants, and even councilmen and board members. If it’s beyond their competence, shame on them, and shame on the people who keep electing such dolts.

    It’s interesting that some of the jurisdictions, apparently something like an eighth of them, have kept up completely with payments on these obligations. Good for them, they get it.

    I can tell you for sure, my former employer knew and understood very well the costs associated with each employee. Still does. I hope they’re up to date on their payments (including PERS). If they’re not, it isn’t because it’s too hard to understand this stuff for the accountants. It’s not that hard.

    • IRS Agent

      Yet another trough feeder.

    • eagle eye

      Well said. It’s not your fault if these towns are too dumb to put money aside to pay their bills. A lot of people just whine about how unfair it is when it comes time to pay. They’re just like people who run up a big credit card debt and then complain because the lender expects to be paid back.

  • Anonymous

    Very soon government in Oregon will go the way of Greece and California. Bankrupt. And the sooner the better.

    • Ron Marquez

      And Portugal, Ireland, Italy, and Spain…..New York New Jersey, and Massachusetts.

      Great Britain is also on shaky ground. The list will grow.

      • valley p

        Arizona, Nevada, and South Carolina all have worse state finances than the states you list. States have the same problem Greece has in that since they do not have their own currencies they can’t lower currency value to increase exports and decrease imports.

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