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.”
Jacob Szeto is Investigative Reporter for the news website OregonPolitico.com.
For more information, contact: Jacob Szeto