Voters get a say in helping state save.

Byline: David Steves The Register-Guard

SALEM - No one disputes that Measure 29 will save taxpayers money.

But whether those savings amount to $1 billion or $44 million - a difference of $956 million - depends on how you look at the Legislature's ballot referral that lets the state refinance its pension debt through a general obligation bond.

"Estimates that we've put together suggest we may save $1 billion over the 24-year life of this bond that we would sell," said state Treasurer Randall Edwards, who asked the Legislature to refer Measure 29 to Tuesday's ballot.

Technically speaking, you could look at it that way. Currently, Oregon must repay its $2.3 billion debt to the state pension system at an 8 percent rate, but it could get a 5 percent interest rate if it refinanced the debt through general obligation bonds.

And the difference between an 8 percent rate and a 5 percent rate, spread over 24 years, is $1 billion.

But if Measure 29 fails, taxpayers won't feel a $1 billion pinch. The projected cost of refusing to let the state use general obligation bonds to pay for pension debt will actually be $44 million, said Todd Jones, an Oregon Treasury spokesman.

That's because when the Legislature passed Measure 29's companion bill detailing how the new pension debt repayment plan would work, it authorized the state treasury to refinance the PERS obligation using "appropriation credits" in case Measure 29 failed.

And the difference between the interest rates for general obligation bonds and appropriation credits is one-tenth of 1 percent.

"That may not sound like a lot," Jones said. "But over the 24-year life of the bonds with an issuance this large, plus insurance, that's where your $44 million comes from."

The measure is complex, to be sure, which may help explain why only about one in four of the state's registered voters have so far returned their ballots. Voters in Lane County must now take their ballots to one of 19 drop-box sites - not mail them in - to make sure they make Tuesday's 8 p.m. deadline.

For the 2003-05 state budget, approved last month by the Legislature, the defeat of Measure 29 would mean a $16 million hole, Jones said. That would come out of a $37 billion budget, which includes the general fund, federal dollars and other resources.

The reason the Legislature asked voters to make the choice between general obligation bonds and appropriation credits - the sort of technical policy decision that state finance officials and elected leaders wrestle with - is that the Oregon Constitution requires voter approval before general obligation bonds can be issued.

Edwards said even if the difference between approval or defeat of Measure 29 is $44 million, not $1 billion, it's still important for voters to let the state realize the greatest possible savings in refinancing its pension debt.

"We're saying the state should try to maximize the cost savings for the taxpayers," he said. "Why not make the best business decision for the state of Oregon? And that's what Measure 29 would do."

The measure was referred to voters by the Legislature, with all but one lawmaker voting for the proposal.

Supporters include the Coalition for School Funding Now! and the Oregon Business Association.

The Oregon Libertarian Party has been the most outspoken opposition group. Its leaders have been critical of the $1 billion savings claims touted by backers.

And at a true savings of $44 million over 24 years, Libertarian Party officials say, the risks aren't worth the rewards.

Those "terrible risks," said Richard Burke, the party's executive director, lie in the wording of Measure 29. He said it is filled with "loopholes" that could allow future legislatures to add pension benefits and pay for them by using the bond-issuing authority provided under the measure. In addition, the measure doesn't set an explicit cap on the amount of debt that could be financed through bonds. Instead, it caps the amount of outstanding pension debt that can be covered with general obligation bonds at 1 percent of the real market value of all property in Oregon.

Burke said Measure 29 proponents are comparing it to refinancing a home when interest rates are low, but that voters should consider a different type of consumer financing when sizing up the referral: a credit card solicitation.

"It is a debt trap," he said. "We're asking people not to take the bait. Not to fall for it."

Jones, the treasury spokesman, disputes the accusation that Measure 29 is full of vague wording and loopholes. He said it is written with the same "standard language" used in other general obligation bond measures that have gone before voters in previous elections.

BALLOTS DUE

Ballots for the Measure 29 vote must be returned by 8 p.m. Tuesday. Postmarks don't count. Here are the ballot drop sites:

Elections Office: 135 E. Sixth Ave., Eugene

City Hall: East side of Pearl Street between Seventh and Eighth streets, Eugene

State of Oregon Building: 165 E. Seventh Ave.

Amazon Pool: 2600 Hilyard, Eugene

Bethel Library: 1990 Echo Hollow Road, Eugene

Juvenile Justice Center: 2727 Martin Luther King Jr. Blvd., Eugene

Sheldon Library: 1566 Coburg Road, Eugene

University of Oregon: ERB Memorial Union, east wing, Eugene

Springfield Police Dept.: l344 A St., Springfield

Lively Park Swim Center: 6100 Thurston Road, Springfield

Florence Police Dept.: 900 Greenwood St., Florence

Cottage Grove: 700 E. Gibbs Ave.

Coburg: 91069 N. Willamette St.

Creswell: 13 S. First St.

Veneta: 88026 Territorial Road

Junction City: 726 Greenwood St.

Lowell: 107 E. Third St.

Oakridge: 48318 E. First St.

Vida: 45602 McKenzie Highway

- Lane County Elections. For more information: 682-4234, www.co.lane.or.us/Elections.