Updated 5:47 p.m.

Gov. Kate Brown said Thursday she wants the state and local governments to sell off or borrow against real estate and other assets to help pay for the ever-growing expense of the public employee retirement system.

She also said she wants the state to do a better job collecting debt owed to it by taxpayers and vendors. And she said it needs to up its game when negotiating contracts with employee unions.

Brown said she will direct the Department of Administrative Services to create a task force of financial experts, Public Employee Retirement System and Oregon Investment Council board members, public employees and public employers. The group could suggest the sale of certain state assets, along with other ways to pay down pension debt.

"Oregonians deserve to know their money is being spent wisely, and that state government is accountable," she said. "The PERS unfunded liability is an enormous challenge, but it's one we must meet."

Brown said she hopes her proposals will result in savings right away and over the next several years. How much? She's not yet sure.

The moves come as the state faces a $1.6 billion shortfall for the upcoming budget cycle. Lawmakers from both sides of the aisle, as well as labor and business groups, have said they are open to balancing the budget with both cuts and new taxes on businesses and hospitals.

Republicans and business groups have pushed for the release of proposals to curb costs before any tax proposals. So far, they're getting their wish.

Last week, the state's top budget committee released a plan that included a temporary hiring freeze and a requirement that public employees pay a larger share of their pension contributions. Brown instituted a two-month ban on state hiring.

Sen. Mark Hass, D-Beaverton, who chairs the Senate Revenue Committee, said he hopes to release his plan to replace the state's corporate income tax with a gross receipts tax next week.

Lawmakers are still in talks with hospital and insurance executives about a tax that would help cover the state's Medicaid funding shortfall.

Brown's plan announced Thursday features three prongs: establish best practices when negotiating labor contracts with unions, recover debts owed to the state and create an expert task force to address pension costs.

PERS panel

Brown said she wants the expert panel to focus on the following:

- Sell off or bond against state holdings, excluding state parks or forests, to pay down the $22 billion unfunded liability by $5 billion

- Hire additional treasury staff, enabling more in-house investment work, thus saving money.

- Require employees to contribute a larger share of the deposits to their pension accounts.

The panel is tasked with reviewing these options and submitting a report to the legislature by Nov. 1.

Any recommendation could be taken up by lawmakers and proposed in a bill during the 2018 session. However, next year's session is a short one – just 35 days – so it's unclear whether lawmakers would be able to tackle PERS issues in that time.

Brown said Thursday that she is confident the legislature will act quickly on any recommendations from the task force.

Tim Nesbitt, a former labor union president who served as an adviser to former Gov. Ted Kulongoski and now consults on public policy, said Brown's agenda for the new task force is a step in the right direction.

"It certainly recognizes the magnitude of the problem and that we can't invest our way out of it," he said.

But reducing the pension fund's unfunded liability by $5 billion doesn't change the fact that the liability continues to grow, he noted.

If PERS cost increases are allowed to grow as scheduled, those increases will amount to the cost of 19 school days by 2023, Nesbitt said.

To truly solve the pension fund problem, Brown's short-term fixes should be paired with solutions that reduce the liability over the long-term, he said.

Senate Minority Leader Ted Ferrioli, R-John Day, questioned Brown's proposal to sell off real estate holdings, a move he likened to a bankrupt company liquidating assets.

The sale of holdings would result in a loss of equity for the state, he said, and agencies that sell land could be trading a one-time cash infusion for a lifetime of rent bills.

Ferrioli said Brown's task force proposal is a snub to lawmakers who have been tackling PERS reforms in the workforce committees.

"She is suggesting to create a task force as if there hadn't been people meeting on this issue for three or four years," he said. "We need to take bold action and we need to do it soon."

During a Wednesday meeting with The Oregonian/OregonLive editorial board, Brown said the task force will allow the conversation around PERS reform to be more thoughtful and transparent.

"It's going to take more thought than a few of us just sitting around a table and throwing spaghetti at the walls," she said. "I think we want actual solutions to the problem. I don't think we want ideas."

Two pension system reform bills, sponsored by Sen. Tim Knopp, R-Bend, are still alive in the legislature. Brown said Wednesday that she's "open to a legislative solution" provided it's legally viable and significantly reduces employer rates.

But as state lawmakers saw in 2015, when some of the PERS reforms of the budget-balancing "grand bargain" were struck down by the Oregon Supreme Court, it's hard to know what will hold up in court until it's tested.

Collective bargaining

Brown's executive order on best practices for collective bargaining does three things:

- Orders market studies every two years to ensure that state salary packages are competitive with comparable employers in the region.

- Requires factoring in healthcare and automatic raises – in addition to cost-of-living-adjustments -- when determining how much employee compensation the state can afford.

- Calls for standardized training programs for new hires.

Debt collection

The governor's proposal on stepped up debt collection lays out several ways she hopes to collect the $3.3 billion owed to the state, as much as $800 million of which is owed to the state's general fund:

- Require agencies to report uncollected debt totals and transfer all debt older than 90 days to the Department of Revenue for collection.

- Track and manage debt collection through quarterly reports.

- Revise state contracting policies to allow agencies to withhold payments to vendors who owe the state money.

- Create a public list of those who owe money to the state.

Brown plans to sign this executive order early next week. The order would complement Senate Bill 89, her proposal to centralize debt collection in the Department of Revenue.

Brown said she hopes to beef up collections in part by adding staff to the Department of Revenue.

"We get a really big bang for our buck," she said.

Adding staff members could be difficult, as Brown's hiring freeze begins May 1, and she is considering extending it.

Ferrioli questioned how much of the debt owed to the state is collectible, and how much is due from those who simply can't pay. If a large chunk of the debt is collectible, those supervising collections haven't been doing their jobs, he said.

He said debt collection is a perennially popular proposal, but that doesn't guarantee it will work.

"How much of this money do you think can you really collect, even if you add more people?" he asked. "I would be very skeptical of any optimistic estimation."

-- Anna Marum

amarum@oregonian.com

503-294-5911

@annamarum

This story has been updated to include reactions from Sen. Ferrioli and Tim Nesbitt, as well as additional comments from Brown.