Pension Crisis Forces Some Oregon Localities to ‘Do Less With Less’

The Oregon State Capitol in Salem.

The Oregon State Capitol in Salem. Shutterstock

 

Connecting state and local government leaders

STATE AND LOCAL ROUNDUP | Kentucky governor apologizes … Idaho vs. feds … Philly tax fatigue ... San Diego’s sidewalk lawsuits … and Minnesota’s long winter continues.

Here are state and local government news stories that caught Route Fifty’s attention.

PENSIONS | No state wants to be in the national limelight for its pensions troubles, but whether it wanted it or not, Oregon got front-page attention in The New York Times this weekend for its “severe, self-inflicted crisis”—plus the staggering $76,111 per month pension for the retired head of the Oregon Health and Science University, an eye surgeon. According to The Times:

The state is not the most profligate pension payer in America, but its spiraling costs are notable in part because Oregon enjoys a reputation for fiscal discipline. Its experience shows how faulty financial decisions by states can eventually swamp local communities.

In Oregon’s case, the heart of the problem is tied to the way the state calculates pensions—including factoring in “income that employees earned on the side” and “long-ago stock market rallies that inflated the current value of their payouts.”

The impact is felt at the local level, which have to make difficult decisions to cut budgets and services. “You get to the point where you can no longer do more with less—you just have to do less with less,” according to Nathan Cherpeski, the city manager in Klamath Falls. That’s in the state’s “restive red hinterlands” where the economy has been struggling and local tax increases are political non-starters. As a result, budget-slashing has been brutal, impacting police response times in some rural counties. Cash-strapped Douglas County saw its library system close last year. [The New York Times; Route Fifty]

Los Angeles City Hall (Shutterstock)

The Los Angeles Times, meanwhile, this weekend delivered an update to its earlier examination of the city’s Deferred Retirement Option Plan, a program for veteran police and firefighters who can use the program “to file workers' compensation claims and then take extended injury leaves at nearly twice their usual pay.” After the L.A. Times’ inquiry and calls by City Hall leaders for a review of the voter-approved program—which started in 2002 as a way to keep police officers and firefighters on the job—there was a spike in new enrollment in February. In 2016, the city’s chief administrative officer called for the DROP program’s elimination, saying that it’s not cost effective and no longer needed for police officer and firefighter retention. [Los Angeles Times]   

IT MANAGEMENT | The North Carolina State Controller’s Office told lawmakers this past week that another $27 million is needed for the replacement of the state government’s “backbone accounting system” or it faces the risk of more difficult problems. "It's a big project, so you don't want to get halfway there," according to Deputy State Controller Jim Dolan. "In order for people to bid for this, you have to have the money put aside." [@NCCapitol / WRAL-TV]

The Nevada Department of Motor Vehicles is “taking a 120-day pause to figure out next steps on its long-planned computer system upgrade after ending a pricey contract in January that a scathing state audit found was six months behind schedule.” [The Nevada Independent]

ELSEWHERE …

  • Frankfort, Kentucky: The governor of Kentucky has apologized for his recent controversial comments he made to reporters regarding protesting teachers, saying that he could “guarantee you somewhere in Kentucky today, a child was sexually assaulted that was left at home because there was nobody there to watch them.” Republican Gov. Matt Bevin’s apology on Sunday came with some some additional thoughts: "For those of you who understand what I was saying, thank you," he said in a video posted to YouTube. "I know a tremendous amount of people didn't fully appreciate what I was communicating." His comments were the subject of two resolutions from the Kentucky House of Representatives condemning the governor’s remarks. Alison Lundergan Grimes, Kentucky’s secretary of state, in a tweet, offered a translation of the governor’s remarks: “Actual translation: ‘Meant what I said. Could have said it better. Sorry, not sorry.’” [Courier-Journal; The Washington Post; @AlisonForKY]
  • Boise, Idaho: State officials say that they shouldn’t have to give back $3.1 million in federal overpayments that were identified in an audit from the U.S. Department of Health and Human Services’ inspector general. The feds disagree and say the overpayment was the state’s fault. [Idaho Statesman]
  • Washington, D.C.: What happens when a local politician shares a wild and controversial conspiracy theory about the Rothschild family controlling global climate? As D.C. Councilmember Trayon White Sr. has found out, it prompts conspiracy-minded folks to come out of the woodwork. “You have just won the hearts of thousands of good people across the U.S. who have been working for years to hear any elected official speak public truth about controlled weather,” according to one email to the councilmember from a resident of San Francisco. [The Washington Post]
  • Tallahassee, Florida: After trustees at Broward College in Fort Lauderdale OK’d a plan to pay David Armstrong, the departing college president, the equivalent of a full year’s salary when he becomes president emeritus, Gov. Rick Scott wants Florida’s state Board of Education and the Board of Governors for higher education to “investigate all sabbatical payments to department college presidents.” [Miami Herald]
  • Philadelphia, Pennsylvania: Landlords and commercial property owners may be more than irked over year-over-year city tax hikes—which has led to lawsuits and “a flood of appeals at the Board of Revision of Taxes”—officials at Philadelphia City Hall say “the higher commercial values are overdue and will help fund the city and the money-starved schools through real estate and use and occupancy taxes, which are based on assessments.” [The Inquirer / Philly.com]
  • San Diego, California: America’s Finest City is facing several lawsuits involving pedestrians, bicyclists and others who allege they were hurt by damaged sidewalks and streets. One suit involves a man who was killed while riding a Segway that had hit a “protruding sidewalk.” Last year, the city paid nearly $5 million to a bicyclist who suffered “severe head injuries” after a hitting a damaged section of sidewalk. [The San Diego Union-Tribune]
  • Rushmore, Minnesota: The calendar says that it’s April, but state and local transportation, public works and first responder agencies in the Upper Midwest were kept busy this weekend by blizzard conditions in some areas. The picture above shows what the Minnesota Department of Transportation was dealing with along Interstate 90 on Sunday. ​​​​​​ [@mndotcental]

Michael Grass is Executive Editor of Government Executive's Route Fifty and is based in Seattle.

NEXT STORY: Why Would the Government Stop States From Helping Student Borrowers?

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