A8
STATE
Blue Mountain Eagle
Brown pushes for ‘working
families’ agenda in fi nal year
By PETER WONG
Oregon Capital Bureau
SALEM — Gov. Kate Brown called
on lawmakers to approve more money for
job training, lower-cost housing and child
care in her fi nal State of the State address
Thursday, Feb. 3.
In her seven years as chief executive,
Brown has governed during the 2020
Labor Day wildfi res that devastated Ore-
gon, racial justice protests and a coronavi-
rus pandemic that sent the state’s economy
into a tailspin — but now is at near record-
low unemployment.
“Too many Oregonians have struggled to
fi nd good-paying careers,” she said, particu-
larly the poor, people of color and rural res-
idents who have not shared in the recovery.
“Our economy is strong, and we must keep
it humming. Most importantly, we have to
make sure that every Oregonian feels it.”
Brown renewed her call for $200 mil-
lion for Future Ready Oregon — a plan to
target job training in health care, construc-
tion and manufacturing — plus $400 mil-
lion more for housing initiatives and $100
million more for child care.
Although governors usually deliver
State of the State addresses to a joint ses-
sion of the Legislature or another live audi-
ence, the pandemic has forced Brown to do
so virtually the past two years.
One more year
Brown was secretary of state when,
seven years ago this month, she succeeded
John Kitzhaber, who resigned under pres-
sure amid an ethics scandal just 38 days into
his fourth term. (There was a 12-year gap
between his second and third terms). Brown
is barred by term limits from running again
this year; she will leave offi ce Jan. 9, 2023.
“In my last year as governor, I view
every day, every moment, as one more
opportunity to focus on the big and bold
work we still have to do for Oregon’s work-
ing families,” she said.
“I am dedicated to building a strong
work force for Oregon. I will bolster that
work force by providing access to child care
so that parents can go to work knowing their
Dave Killen/The Oregonian, File
Oregon Gov. Kate Brown spoke at a “Re-
opening Oregon” celebration at Provi-
dence Park in Portland on June 30, 2021.
Brown gave her fi nal State of the State ad-
dress on Thursday, Feb. 3, 2022.
kids are cared for. And I will marshal my
colleagues to once again make a signifi cant
investment in aff ordable housing. These
three investments work together to ensure
every working family can thrive.”
She has called for spending of an unan-
ticipated $1.5 billion in tax collections gen-
erated by a strong economy. But she and
legislative leaders have agreed to set aside
$500 million, mostly from federal pan-
demic recovery funds, to balance the 2023-
25 budget. That budget will be put together
mostly while Brown is still governor,
although her successor will have until
Feb. 1 to propose changes.
Brown also touched on the private
accords which she and her staff medi-
ated between the timber industry and
environmental advocates to resolve dis-
putes going back four decades over the
fate of 10 million acres of Oregon’s for-
ests. Both sides agreed to protect sensitive
species and create a habitat conservation
plan. Brown has asked for $35 million
to start work on streamside habitat, plus
$121 million to sever the link between
the Elliott State Forest and the Common
School Fund, earnings from which are
distributed to schools. The State Land
Board seeks to transfer the south coast
acreage to Oregon State University for a
publicly owned research forest.
Pandemic aff ects popularity
Brown has the lowest popularity rat-
ings of any of the nation’s governors,
although other recent Oregon governors
such as Republican Vic Atiyeh and Dem-
ocrats John Kitzhaber and Ted Kulongoski
also saw sharp declines late in their second
terms. One factor has been state coronavi-
rus restrictions, which have drawn sharp
public criticism and even Capitol protests.
State police troopers turned away all but a
handful of unmasked people who sought to
enter the Capitol as the Legislature opened
its 2022 session on Tuesday.
Brown lifted most of her executive
orders on COVID on June 30. But her
emergency authority remains in place,
as does a requirement for wearing masks
indoors.
More than 6,000 Oregonians have died
of COVID-19. But Brown said it could
have been far worse:
“Oregon has fared better than most,”
she said. “We remain third in the nation
for lowest cumulative case counts. If our
response to COVID matched that of the
average state, more than 4,000 Oregonians
wouldn’t be with us today. We continue to
be among the top states for getting shots in
arms and administering boosters.
“And all three branches of government
came together to get money to renters in
need. In less than a year, we have helped
more than 90,000 Oregonians stay safely
in their homes.
“That’s not to say it hasn’t been hard.
It has been utterly heartbreaking at times.”
But Brown — who said last week she
does not plan to endorse a candidate in the
May 17 Democratic primary — had a clos-
ing message.
“To all the future governors of our
state. To the elected leaders who will come
next. To our future business and commu-
nity leaders, and youth who will follow our
footsteps. Let me leave you with this: fi nd
the opportunity, even in times of crisis.
Especially in times of crisis.
“That’s how we continue on this
journey of transformational change for
Oregon. That’s how we pursue justice.
That’s how we heal divides and collab-
orate in ways that serve our state. That’s
how we honor this beautiful place we
call home.”
Mystery bill fuels guessing game on Wyden future
GARY A. WARNER
Oregon Capital Bureau
SALEM — A mystery
proposal to change the way
vacancies among Oregon’s
U.S. senators are fi lled has
set off a wave of speculation
that Sen. Ron Wyden, D-Ore-
gon, could opt out of his 2022
re-election bid or not serve his
full six-year term if elected.
The
questions
about
Wyden, 72, and the proposal
intensifi ed Feb. 1 when the
proposal was on the agenda of
the House Rules Committee
in its fi rst meeting of the 2022
session.
It appeared on a short list
of committee bills, a contro-
versial form of submitting
legislation without the name
of the bill’s author or who is
requesting the action.
“Why are we doing this
now?” asked House Minority
Leader Vikki Breese Iver-
son, R-Prineville, vice-chair-
woman of the rules panel.
Rep. Barbara Smith War-
ner, D-Portland, had little
information about the ges-
tation of the idea, other than
it came to the committee as
a request from a source she
didn’t identify.
Oregon is one of fi ve
states where the departure or
death of a sitting U.S. sena-
tor requires a special election
to fi ll the seat, which remains
vacant in the meantime.
The proposal would allow
the governor to align the
replacement of a U.S. sena-
tor with the current system for
replacing Oregon’s executive
offi cers. The governor names
a replacement drawn from the
same political party as the per-
son who had the seat.
An election to fi ll the unex-
pired portion of the offi ce-
holder’s term is held at the
next general election.
The proposed legislation
that would allow the gover-
nor to choose an interim sena-
tor was circulated by bloggers
and Twitter-users, including
the popular Oregon conserva-
tive website Oregon Catalyst.
GOP activists speculated it
could be a vehicle for a Dem-
ocratic governor to replace
Wyden if he withdrew from
the 2022 race prior to the gen-
PHO T O
CONTEST
Local Photos by Local Folks
eral election or won re-elec-
tion and didn’t fi nish his new
term.
Wyden spokesman Hank
Stern said the Twitter-driven
scenarios were “silly and
uninformed.”
“Senator Wyden is running
hard to win re-election to a full
six-year term,” Stern said. “He
will serve a complete six-year
term if re-elected.”
Stern said Wyden does
not know where the proposal
came from and has no role in
its presentation or action to
change the law.
After the House Rules
Committee meeting on Feb.
1, the legislation remained
in committee with no further
action scheduled.
Wyden has $10 million
in his campaign fund, and
declared his intent to run for
re-election in a Federal Elec-
tion Commission document
fi led at the beginning of 2021.
He formally fi led to run on Jan.
26 when he fi led a statement
of candidacy with the Oregon
Secretary of State’s Offi ce.
Wyden challenged incum-
bent U.S. Rep. Bob Duncan,
D-Portland, in the 1980 Demo-
cratic primary for the 3rd Con-
gressional District. Wyden won
and then defeated Republican
Darrell Conger that November.
When U.S. Sen. Bob Pack-
wood, R-Oregon, resigned in
1995 amid a sexual harassment
scandal, Wyden won a special
election to fi ll the seat, the fi rst
vote in Oregon done entirely
by mail ballot.
Wyden has been elected
to four terms as senator. If he
were to win election in 2022,
he would serve until January
2029, when he would be 79.
Wyden has raised $10 mil-
lion since he was last re-elected
in 2016 and reported this
month that he ended 2021 with
$7.2 million in the bank.
The totals dwarf all other
challengers. The one Demo-
crat and seven Republicans
who have fi led to run against
Wyden have raised $168,000,
combined.
The deadline to fi le to run
for the U.S. Senate and several
other federal and state offi ces
in Oregon is March 8.
The primary for both par-
ties is May 17.
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Wednesday, February 9, 2022
Earnings gains
cut PERS liability
By PETER WONG
Oregon Capital Bureau
SALEM — Oregon’s
projected unfunded liability
for public pensions appar-
ently shrank signifi cantly
last year, mostly attribut-
able to healthy investment
earnings that pushed the
fund past the $100 billion
mark for the fi rst time in its
75-year history.
A fi nal accounting will
come later this year, but
preliminary numbers for
2021 peg the unfunded lia-
bility at either $19.7 billion
or $14.4 billion, depending
on whether “side accounts”
are excluded or included.
Side accounts are amounts
of money that participat-
ing governments set aside
to cover part of their future
pension liabilities, but
not all of the 900 govern-
ment employers in the Pub-
lic Employees Retirement
System have set up such
accounts.
The comparable figure
for 2020 was $28 billion.
The PERS fund was at
$85.4 billion in December
2020; the preliminary fig-
ure one year later is $100.4
billion. Its investments go
beyond common stocks,
which PERS started back
in 1973, to other things.
Oregon has one of the
nation’s largest public pen-
sion funds.
“It’s a good marker to
know what the investment
returns of last year did,”
said Scott Preppernau of
Millman, the firm that does
the actuarial work for the
system, in a Jan. 31 report
to the PERS board. “Clearly
a strong asset year makes a
signifi cant improvement in
these results over a one-
year time frame.”
A decade ago, under
then-Treasurer
Ted
Wheeler, the Oregon Invest-
ment Council changed its
strategy so that the PERS
fund will not grow as much
when fi nancial markets
surge, but also does not
drop as much when mar-
kets plunge. The change
emerged after the Great
Recession, when the PERS
fund lost 28% of its value
as it declined from $66 bil-
lion in December 2007 to a
low of about $48 billion in
March 2009. It took several
years for the PERS fund to
get back to its pre-recession
level.
PERS Board Chair-
woman Sadhana Shenoy
said Oregon’s long-term
liability for public pensions
hasn’t gone away, given
that the funded status of the
system is still below a tar-
get of 90%.
“We have a long way
to go,” she said. “But
this shows that one good
year gives us a little bit of
respite.”
Rate-setting is next
The valuation of the
PERS fund as of Dec. 31
will be a factor when the
board sets pension con-
tribution rates for the 900
participating governments
for the 2023-25 budget
cycle, which starts July 1,
2023. The board will likely
set those rates at a Sept. 30
meeting.
However, the current
average rate of 17.9% is
likely to be maintained,
instead of reduced. The
board changed its policy
last year so that increas-
ing the funded status of the
system to a specified tar-
get of 90% takes priority
over lowering contribution
rates.
The “average rate” is a
misnomer, because no par-
ticipating government pays
it.
Rates are determined
by the mix of employ-
ees within a govern-
ment agency, based on
when they were hired and
whether they are classified
as public safety employ-
ees, who qualify for higher
pensions upon retirement
but also require higher
rates than other employees
for pension contributions.
State law defines “public
safety employees” for pen-
sion purposes.
Rates tend to be higher
for governments with a
greater share of employ-
ees hired before August
2003 — although those
numbers have declined
because of retirements —
or those with more public
safety employees, such as
police, sheriff’s deputies
and firefighters.
Of the 228,000 pub-
lic employees covered by
the system as of mid-2021,
PERS reports that more
than 162,000 of them were
hired after the Oregon
Legislature
overhauled
the system in 2003. The
rest, all hired before then,
fall into more generous
defined-benefit plans from
prior years.
But of the 156,500 retir-
ees as of the end of 2020,
most of them (130,000) get
benefits under a pre-1996
plan and are classified as
Tier 1. Another 18,000 get
benefits under a plan (Tier
2) that was in effect from
January 1996 to August
2003.
The retirement plan that
applies to most now blends
contributions from employ-
ees and their employers in
what are known as individ-
ual account plans.
Contribution rates for
participating governments
also are “collared,” which
means part of the increase
is carried over into future
budget cycles, so that par-
ticipating governments do
not get hit with the full
amount in a single cycle.
The board approved a
change last year in how
rates are calculated for the
collar, which limits what
a rate increase would be
otherwise.
“Emotion is not part
of being an actuary,”
said Matt Larrabee, also
of Millman. “But we are
happy that the rate-collar
structure is performing for
this first biennium (two-
year cycle).”
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