The only public entities currently permitted to file for bankruptcy in Oregon are the water control/irrigation districts.  

The States can't declare bankruptcy until and unless the US Congress grants them that authority and even that may be Unconstitutional for a State based on the 11th Amendment to the Constitution because Bankruptcy would require a Federal Judge to tell a sovereign State what to do.  

Last year, Puerto Rico tried to get permission to go bankrupt after too many Democratic administrations ruined its financial situation through excessive bonding debt.  

The Congress refused to permit it even when the Secretary of the Treasury tried to get them to do so.   

 The Supreme Court didn't permit Puerto Rico to end run Congress, either.

Paying  the money owed until the Tier One and Tier Two retirees and their spouses die off is the long term solution.