In Effort to Shore Up Pension Shortfall, Oregon Targets Booze

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Oregon governor Kate Brown has created a special task force to explore options for shoring up Oregon's $22 billion public pension deficit. Ideas include "commercializing" Oregon's Liquor Control Commission and raising the state sales tax on alcohol. Full privatization of the control state's liquor system was rejected on account of worries that the state couldn't get "the best price" if it divested its stake in the system now. The Register-Guard has the full story:

Oregon could buy down its $22 billion public pension deficit by further commercializing its state-run liquor system, raiding a variety of big public reserve funds or imposing new surcharges of up to 10 percent on all state-­issued permits, licenses and registrations...

Big changes to the Oregon Liquor Control Commission and SAIF, the state workers’ compensation agency, are among the task force’s most developed ideas so far.

Blair said the state could change OLCC rules and practices so that it generates more than the current $287 million it now does annually for state and local governments.

'The way (liquor) is purchased, priced and distributed is not necessarily the way a commercial operation' would do it, Blair said.

For example, Oregon now has one liquor store per 15,000 people — far below the national average. The state could rapidly expand the number of stores in operation. It also could switch to a centralized purchasing system, so stores aren’t all ordering their own products individually through the OLCC. And the OLCC could be allowed to market or promote the liquor it sells.

While the task force initially discussed fully privatizing OLCC, Blair said that selling the agency before its full commercial potential is realized would mean 'you wouldn’t get the best price.'

But task force member Charles Wilhoite of Willamette Management Associates said that a more aggressive approach at the OLCC might raise moral questions about the state promoting alcohol consumption.

Greater commercialization 'will necessarily result in more drinking,' he said.

The task force also is floating a new state tax of between 1 percent and 10 percent on liquor sales with the proceeds — between $10 million and $50 million — dedicated to PERS. It might recommend lifting the current ban on cities and counties passing their own alcohol taxes as well..."

Read the rest here.