Court orders pension ballot plan rewritten

Oregon proposal called misleading in ruling

PORTLAND, Ore. — Oregon Attorney General Ellen Rosenblum must redraft the misleading title and explanation that her agency wrote for a proposed ballot measure that seeks to prohibit government employers from taking on any new pension debt, the Oregon Supreme Court ordered this past week.

The Justice Department is responsible for drafting ballot measure titles and explaining their effects to voters in a neutral fashion. But backers of Initiative Petition 13 say that’s not what happened when agency officials issued proposed language for their measure in May, The Oregonian/OregonLive reported.

The initiative is straightforward, says Julie Parrish, a former Republican legislator who is one of the chief petitioners. It requires the state treasurer to calculate the unfunded actuarial liability of any public pension program in the state as of Dec. 31, 2022. It creates a constitutional prohibition against government employers accruing any new unfunded liabilities after that date. And it prohibits employers from borrowing money to offset their pension payments, as public employers have in the past by issuing pension obligation bonds.

In fact, it’s not literally possible for government employers to avoid incurring new unfunded liabilities — temporarily at least. They are created when investment returns fail to live up to expectation in any given biennium, when actual wage growth or mortality rates differ from assumptions, or when employers fail to make adequate contributions to cover accruing benefits.

But practically speaking, backers say the measure would turn public pension systems in Oregon into payas-you-go systems, with employers forced to eliminate any incremental unfunded liabilities by paying more money into the system; in effect, zeroing out the credit card balance in any funding period.

Pretty simple, they contend. But the measure drafters at the Department of Justice apparently had trouble with the concept.

In the draft ballot measure title and in the explanation of what a “yes” would mean, the agency included the notation: “effect unclear.” The Supreme Court said in its unanimous decision that the measure wasn’t clear in every respect, particularly in how government entities would comply with the new constitutional provision. But it said the “effect unclear” comment “is unhelpful and fails to describe the proposed measure’s subject matter, as required.”

Meanwhile, the court said the agency’s “no” vote explanation was misleading, insofar as it “does not summarize the current law accurately or advise voters of the choice they are being asked to make.”

The agency drafters lost the thread in the summary explanation of the ballot measure as well, which the court said contains information that “does not summarize any part of the measure and is not an effect of the measure.”

For those reasons, the court said the draft doesn’t comply with the standards for ballot measures set out in state law and referred it back to Attorney General Ellen Rosenblum for modification.

Parrish contends agency officials deliberately drafted the measure in a way that would confuse voters and make them less likely to support it. She maintains the move was political: That Rosenblum will be up for re-election and beholden to unions for campaign donations. And unions won’t like the measure.

“This whole thing is very political,” Parrish said.

At the very least, Parrish contends, “voters should get a chance to see what these pensions are really costing. The way to do that is to put it in your budget every year. You don’t get to kick these obligations down the road in perpetuity.”