The Portland, Ore., Fire & Police Disability Retirement Fund will need to look elsewhere for money to pay beneficiaries, thanks to a voter rollback of property taxes that limits the amount of money that can be raised by the fund.
Oregon voters in November approved Ballot Measure 47. That property tax measure rolled back the assessed valuation of properties by 20% and limited annual property tax increases to 3% of assessed valuation.
A pay-as-you-go fund, Portland Police & Fire can levy up to $2.80 per $1,000 of assessed valuation, said David Smith.
Mr. Smith, the Portland city treasurer and fund trustee said that historically, the system needed just $1.50 per $1,000 to make payouts.
With the new limits, the system "will reach the $2.80 level in about six to seven years," said Mr. Smith.
The present value of the future stream of the levy totals $1.2 billion, said Mr. Smith. "We had more than enough levying capability to fund the unfunded liability," he said.
The fund's liability is $765 million, Mr. Smith added.
The fund is exploring options to make up the anticipated shortfall, he said.
Among the possibilities: issuing bonds, but it has to be determined whether it is legal under the restrictions of Measure 47; or obtaining a legal opinion that would grandfather the pension fund's financing method because it existed before Measure 47.
The Portland city government recently sold an $80 million bond issue to create a cash cushion for the fund, said Mr. Smith.