Rather than seek voter approval for the idea initiated by State Treasurer Randall Edwards to refinance $2 billion of Public Employees Retirement System (PERS) debt, the Libertarian Party said state officials should instead slash spending and sell assets to fund the obligations, according to the Associated Press.
The savings would come about because t he state now pays 8% interest on the debt; that could be reduced to about 5% interest because of favorable bond borrowing costs. Edwards says that would save taxpayers an estimated $45 million per year in interest payments.
However, the ballot measure “mortgages our children’s future,” Richard Burke, Libertarian Party executive director, said at a news conference, according to the AP. “Voters should tell Salem that we expect better solutions to the PERS crisis than taking out a new credit card.” Libertarian Party Chairman Tom Cox said the state should sell assets such as SAIF Corp., the state-owned workers’ compensation insurer, instead of refinancing debt.
Libertarians long have advocated ending government involvement in functions that can be turned over to business such as insurance and liquor sales.The new bonding measure is a spinoff of a campaign by lawmakers and Governor Ted Kulongoski to reform PERS, which has a long-term debt estimated at $16 billion.Analysts estimate that a package of pension changes passed by lawmakers that included scaling back benefits will shave $9 billion off the debt.
Supporters of the ballot measure say it is just a way to take advantage of lower interest rates on bonding. “It’s no more than what homeowners and consumers already do – restructure debt,” Kulongoski said Wednesday, according to the AP. “It saves the taxpayers money.”