Statewide Financial Condition Report Shows Significant Economic Recovery

Thursday, May 14, 2015

GoLocalPDX News Team

Today, Oregon Secretary of State Jeanne Atkins release a Statewide Financial Condition Report which shows that health care costs, violent crime and unemployment insurance are all trending favorably in Oregon’s recovering economy.

“Oregon was hard hit by the Great Recession, but the recovery has seen significant improvements to the state’s financial footings,” said Secretary of State Jeanne P. Atkins. “Still, there are areas that need attention, including debt payments, programs for vulnerable Oregonians and the state’s depleted Rainy Day Fund.”

The recession forced Oregon leaders to make difficult budget decisions, and the biggest challenge was meeting the increased need for state services without enough state revenues, according to the Secretary of State's office.

Since then, some encouraging longer-term trends have emerged:

State health care costs for employees have leveled off in the past four years, and declined slightly in 2014 as a result of employee contributions.
PERS assets reached 97% of liabilities, mainly as a result of investment growth.
Violent crime rates continue their long decline, although property crimes recently increased slightly.
With federal assistance, Oregon had sufficient unemployment insurance reserves to provide benefits through the recession, and has already made great progress rebuilding the reserves.
Despite the strides, aspects of the state’s financial health still need attention:
The state borrowed to build infrastructure and create jobs, but the debt payments continue after the money is spent, leaving less money for future maintenance.
Spending on health and human services grows year after year, reflecting the continued needs of the Oregonians whose income hasn’t rebounded enough from the recovery.
Oregon relied on its Rainy Day Fund during the recession, but has not yet begun to rebuild it.

“A sound financial condition is vital for sustainable government services,” said Atkins. “We need to continue rebuilding so we can be prepared for the next economic storm.”

Read the full report HERE.

Related Slideshow: Oregon Leaders React to PERS Ruling

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Oregon School Boards Association

"Clearly the court’s decision is going to have enormous impacts on school budgets from 2017 and beyond, unless the Legislature addresses the situation," said OSBA communications specialist Alex Pulaski. "We have all seen the Legislative Fiscal Office’s estimates that school districts will face an additional PERS bill of about $358 million total in 2017-19. If districts have to cut their budgets as a result, as they have done repeatedly over the last 10 years, that would likely lead to teacher layoffs, larger class sizes and lost teaching days.

After talking with our legislative team, it appears we are not in a position to predict what path legislators might take to resolve the situation. First, we all need more time for PERS to determine precisely how much rates will go up and whether any other changes will be taking place as a result of the decision. Although we expect to be working with legislators on a solution to mitigate the effects of this ruling, it’s unclear at this point what forms that might take."

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House Republicans

"It’s clear that we need to focus on growing and strengthening our economy to cover the costs of these ballooning pension liabilities since the Supreme Court reversed much of the work the Legislature undertook to address this fiscal crisis facing Oregon. Local governments and school districts across the state again face massive uncertainty and risk as they struggle to adequately fund schools and critical public safety services, said House Republicans communications director Kara Walker.

"Given the Supreme Court decision’s implications for any future attempts at PERS reforms, the Legislature must take steps to foster growth in Oregon’s private sector and also enact legislation that protects and promotes Oregon employers. Creating permanent, family-wage jobs and increasing incomes and wages across the state will help to stabilize local governments and also work to address the PERS costs that we and future generations now face because of decisions made in the past."

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Representative Tobias Read, (D-Beaverton)

“This bill would help earn money to fill the gap by cutting Wall Street fees instead of cutting public services. It upgrades and modernizes our investment programs and practices while improving oversight.”

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Senator Tim Knopp (R-District 27)

“As far as what the Supreme Court ruled in regards to the Public Employee Retirement System I believe that we have to focus on three things: Redirecting the 6% IAP member contribution, setting the amortization rates for money match at a level that will reflect the private sector rates, and placing new employees in contribution plans similar to those in the private sector.”

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Governor Kate Brown

“I will be reviewing the ruling and assessing next steps, including the short and long term fiscal needs of PERS, and I will be working with the PERS Board to determine what next steps they will take.”

Melissa Navas, Press Secretary for Governor Brown:

"The opinion leaves a lot of questions about implementation. Governor Brown has asked PERS and DOJ to analyze the opinion and provide advice for implementing it."

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Senator Chris Edwards (D-District 7)

"I'm not aware of any immediate solution to the PERS issue. Oregonians have a choice to either continue underfunding public services, or to get real about revising the tax system. It's not going to be easy. This was devastating to Oregon's budget."