(The Center Square) – As the deficit of the state’s public pension system continues to grow, spending more on housing is a priority for Oregon Governor Tina Kotek. She signed legislation this past spring that spent well over $300 million trying to address the state’s housing problems, including homelessness.
Even so, spending more on housing to build more homes is a top priority for the governor during the 2024 legislative session.
“We need to have an infrastructure of shelter across the state, and we are enhancing that network, but the goal is not to grow shelter,” Kotek said, according to Oregon Capital Chronicle. “The goal was to get more housing so people can move from shelters and into long-term housing.”
Kotek wants to double the number of homes built in Oregon over the next 10 years. While the state averages about 18,000 homes built annually, she wants it to produce 36,000 homes each year — and she wants the homes to be affordable for people in the bottom half of income earners.
This is the governor’s priority as the state’s public pension system’s funding deficit grew by $8 billion last year due to its worst investment performance in more than 10 years. As a result, the Oregon Public Employees Retirement System finished last year with $28 billion in unfunded liability. Reducing this deficit may require better returns on investment and higher contributions from public employees at schools, libraries, and local governments, according to OregonLive.
For the past eight years, the deficit hovered around $20 billion after being nearly fully funded around the time the Great Recession hit.
After the poor return last year, the over 900 employers in the system may have to boost payroll contributions by 1.7%, boosting the average rate above 27 cents for every payroll dollar. Doing so would result in $1.3 billion in contributions over the next two-year budget cycle.
If employers have to do this, it will result in less available funding for schools, libraries and local governments – and smaller paychecks for employees and retirees.
It’s unclear if Kotek and the state legislature plan on taking action to address these potential shortfalls during the 2024 legislative session.