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Vote NO on Measure 29

I just mailed my ballot for the Oregon Sept. 16th Special Election. The only item on the ballot is Measure 29.

The measure would amend the state constitution (which is very common in Oregon, strange as it may seem to outsiders) to authorize the state to use "general obligation" debt to finance state pension liabilities. It caps the amount of debt at 1% of the value of all property in the state.

The measure is being advertised as "refinancing" the existing PERS debt.

I voted NO on this measure for several reasons:

  • I assume the current debt financed with COPs because they were mentioned as the only alternative in the Legislative Argument in Support. A COP is a way to skirt around the constitutional provisions that limit the power of the state to incur debt. I am very curious to know how COPs can finance the existing PERS debt, because I don't see where lease revenues would come from. This makes me suspicious of the status of the existing debt, and if politicians have played games with the old debt, they'll play games with the new debt. This is the relevant section of the Oregon constitution (Article XI, Section 7) which Measure 29 would partially strike down:

Credit of State Not to Be Loaned; Limitation Upon Power of Contracting Debts. The Legislative Assembly shall not lend the credit of the state nor in any manner create any debt or liabilities which shall singly or in the aggregate with previous debts or liabilities exceed the sum of fifty thousand dollars, except in case of war or to repel invasion or suppress insurrection or to build and maintain permanent roads; and the Legislative Assembly shall not lend the credit of the state nor in any manner create any debts or liabilities to build and maintain permanent roads which shall singly or in the aggregate with previous debts or liabilities incurred for that purpose exceed one percent of the true cash value of all the property of the state taxed on an ad valorem basis; and every contract of indebtedness entered into or assumed by or on behalf of the state in violation of the provisions of this section shall be void and of no effect. This section does not apply to any agreement entered into pursuant to law by the state or any agency thereof for the lease of real property to the state or agency for any period not exceeding 20 years and for a public purpose. [source]

  • Here's one of the games they'll play — it's an accounting gimmick. I see nothing to prevent the state from funding pension liabilities exclusively through the issuance of debt until it reaches the 1% limit. This would raise the effective budget for other programs, enabling them to escape cuts. (This goes above and beyond the fact that general obligation debt would save on interest costs.)
  • Debt is too attractive to politicians because it creates obligations that don't need to be paid until they're out of office. They'll spend the future into oblivion. Why, just look at the current federal debt if you don't believe me! In fact, the PERS system itself is an example of this kind of evasion of the future. I want it to be difficult for the government to go into debt.
  • I don't want the burden of PERS to be decreased, because that would blunt political opposition to the program. PERS needs to be scrapped and replaced with a defined-contribution plan that makes individuals responsible for their own retirement.

Oregon residents, remember to vote on Measure 29!