The Democratic candidates for state treasurer disagreed politely, but still showed their differences, at a forum sponsored by the City Club of Portland.
Elizabeth Steiner, 61, is a physician at Oregon Health & Science University, a state senator from Portland since her initial appointment in 2012, and Senate co-leader of the Legislature’s budget committee for the past six years.
Jeff Gudman, 69, is a financial adviser, a Lake Oswego city councilor from 2011 to 2019, and the Republican nominee for state treasurer in 2016 and 2020. He lost both times to Democrat Tobias Read of Beaverton, who is barred by the Oregon Constitution from a third consecutive term and is running for secretary of state.
Gudman switched parties last fall. But he remains the outsider in this race, though he brings 45 years of experience in finances.
“I wasn’t personally asked to take over the job by the current treasurer in a private meeting,” Gudman said at the April 12 forum at University Place.
“After months of traveling all over the state, meeting with people, having conversations and listening, I feel people have been left behind, again and again. I bring a platform of change and action for the voters of Oregon.”
Steiner said she would build on what Read and other Democratic treasurers have accomplished in the past three decades.
She said: “As treasurer, I am committed to protecting the retirements of Oregonians who depend on the state’s Public Employees Retirement Fund, expanding the utilization of a wide range of savings programs that already exist, and implementing new initiatives — such as Baby Bonds — that will create savings accounts for every child born in Oregon.”
She would be the first woman elected treasurer, one of two key state offices that women have not held. The other is Oregon Senate president, who is chosen by colleagues, not voters.
The winner of the May 21 primary will face Republican state Sen. Brian Boquist of Dallas in the Nov. 5 general election.
Suzanne Stevens, editor of the Portland Business Journal, was the forum moderator who asked questions and drew written questions from the audience.
PERS question
The treasurer oversees banking functions of state government, plus the issuance of state bonds and investment of state funds, the largest of which is the Public Employees Retirement System, which stood at $98.4 billion in February and is among the nation’s largest public pension funds. (The treasurer sits on the Oregon Investment Council, whose four other members are appointed by the governor and confirmed by the Senate.)
The unfunded actuarial liability of the pension fund stood at $28 billion without side accounts, or $21.8 with side accounts, defined as amounts set aside by some local governments to pay pension obligations. The system's funded status is 73% without side accounts, 79% with side accounts. The goal is 90%.
The candidates disagreed on 2019 legislation, which Steiner voted for, that diverted part of future pension contributions to individual employee accounts into current benefits for retirees — most of whom are covered by more generous plans that took effect before lawmakers overhauled the system in 2003. (Steiner is an OHSU employee covered under Tier 2, which applies to public workers hired between 1996 and 2003. About 130,000 retirees are under Tier 1.)
“I would not have voted to cut the benefits of current and future PERS employees,” Gudman said.
Had he been the state treasurer, he said, he would have urged lawmakers to set aside $100 million annually from excess income tax collections — known as the kicker — to reduce the unfunded liability of the system.
“We have produced the largest unfunded liability in Oregon history. We have to address it — and this is an opportunity to do so,” he said.
“I think we are much better served by making sure we have a first-rate workforce to provide the services we all want.”
Steiner said she voted for the 2019 legislation because it cleared the way for a vote on the Student Success Act, which created a state corporate activity tax whose proceeds are earmarked for school improvement programs.
“One of the things you learn by being a legislator for this long is that you often have to make tough choices between two things that are both good,” she said.
Steiner favors a cap on the kicker, which amounted to a record $5.6 billion at the close of the 2021-23 budget cycle. But she also said that because voters wrote it into the Oregon Constitution in 2000, two-thirds of both chambers are required for any action other than rebating the money to taxpayers — and that Gudman’s proposal would not fly.
“Asking our state economists to predict within 2% what our revenues are going to be over a 24-month period is madness and unfair,” she said.
“But I can tell you that getting two-thirds of the Legislature to agree on anything that controversial is virtually impossible. We don’t have $100 million to spare in our budget unless we take it out of health care or education.”
Bond issuance
Though the treasurer oversees the issuance of state bonds — some are backed by the tax-supported general fund, others by specific sources such as the Oregon Lottery — lawmakers authorize which ones are issued and how much can be spent overall. An advisory commission created in 1981 reports to both.
Steiner said that under federal law, projects must be completed within a specified period for the bonds to be sold tax-free.
“The treasurer does not have a specific role in ensuring that the bonds are actually used the way they are supposed to be,” she said. “That is the Legislature’s job. That is the job of state agencies and the Department of Administrative Services.”
Gudman said the treasurer should be more active, such as the seismic reinforcement project for the Capitol in Salem, whose cost has ballooned by $90 million. (Lawmakers paid some of the project cost directly from the state budget and the rest from general obligation bonds.)
Asked whether he would take a more interventionist role, Gudman replied: “Yes. Period. Full stop. That is what treasurers do. You want a treasurer for treasurer.”
According to the Legislative Fiscal Office, Oregon had a total of $11.3 billion in bonds in mid-2022, $6.8 billion of which were general obligation bonds backed by the state's general fund.
Net-zero plan
Both candidates did agree on Read’s proposal, which he unveiled Feb. 7 to the Oregon Investment Council, that he said would achieve a net-zero state investment in fossil fuel businesses by 2050. The plan calls for gradually increasing investment in public equity (stocks) related to the transition to alternative energy, raising the state’s share of such investments in private equity and real assets from $2 billion to $6 billion by 2035 — and no new investments in primary fossil-fuel ventures.
Steiner said she would go one step beyond and scrutinize businesses that are big fossil-fuel consumers, not just oil and gas producers. (The 2024 Legislature passed a measure, signed by Gov. Tina Kotek, that urges the treasurer to divest coal-related investments.)
“Just as I said at the beginning about our budget reflecting our values, our investments have to reflect our values,” she said.
“It is about engaging and investing more in renewables. It’s about digging even deeper into the emissions profiles to ensure that we are pushing the needle on responsible investing to get us to net zero — I hope much sooner than 2050 — while meeting the fiduciary responsibilities of the investments of one of the nation’s largest pension funds.”
Gudman said Read’s targets for boosting state investments in carbon-free energy are too modest.
“It is doing less than what we have done with renewables over the past 10 years,” he said.
“There is nothing in there right now that says climate change is impacting our economy. I cannot put a number on it, but it is.”
Both candidates agreed that Oregon should exert itself as a major institutional investor to bring about corporate change in environment, social and governance issues.
Steiner: “People sometimes imply that paying attention to social and governance issues is an either/or proposition when it comes to earning money for the state. I would argue strongly that paying attention to those issues is a ‘both/and.’ One can do well by doing good.”
Gudman: “They are all admirable goals. But you need to break them down into their component parts.” He said there is much to praise with the mission Tesla, the electric-car manufacturer, but also question with the leadership of Elon Musk.
Paying for transportation
Although it will be up to the 2025 Legislature to decide how Oregon should pay for new transportation projects, the candidates differed on alternatives.
Gudman is an outspoken opponent of tolling, except for the interstate bridges across the Columbia River. He said Oregon should do away with the gasoline tax, which was the nation’s first when it was created in 1919, and substitute a tax based on vehicle miles traveled.
“You do not create a brand-new administrative network to collect the money,” he said.
He also said that any plan by the Legislature should list priorities other than highways. “Then we will see how much money we have left for roads,” he said. “If we are going to have a 21st century transportation system, it simply cannot be car-centric.”
Though she has lived in Oregon for three decades, Steiner came from the Northeast, where tolls are common. Steiner would retain her Senate seat if she loses her current race and would have a chance to weigh in on the financing debate.
“I believe there is a balance between everybody paying for an infrastructure that benefits everybody and the heaviest users contributing more. So I am not opposed to tolling,” she said. “I think there is value there, because the people who are putting the most impact on the roads ought to be the ones who are paying for it.”
pwong@pamplinmedia.com
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