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Take that winding road toward reform of PERS

Everyone realizes that one solution involves reform of Oregon’s Public Employee Retirement System

Nov 15, 2012 | 5 Comments


Local government, public education and state agency budgets are stretched thin, and everyone realizes that one solution involves reform of Oregon’s Public Employee Retirement System. Turning that perception into reality may be a long and winding legislative road, but a road well worth taking.

Two years ago, unions provided the funding and foot soldiers to put Democrat John Kitzhaber over the top in a tight, hard-fought battle with Republican Chris Dudley. And public employee unions led the way.

This year, Democrats retained a majority in the Oregon Senate and seized control of the House, giving Kitzhaber his first-ever taste of full party sway. Once again, public employee unions were key political players.

With that background, our expectations for meaningful PERS reform didn’t exactly soar with Kitzhaber’s call to action last Saturday in an address to the Oregon School Boards Association. Still, if anyone can pull off such a feat, it’s John Kitzhaber.

The governor has greater legislative and leadership skills than those of his recent predecessors. He is a master at finding common ground and drawing others to it, from all sides of political, social, environmental and, yes, labor-management divides.

Kitzhaber also has plenty of solid backing on this issue. There is growing recognition in the Oregon business community and among Oregonians in general that PERS excesses have decimated public budgets and that reform is a must.

Both the governor and his working majorities in the House and Senate are beholden to the public employee unions. That was evident in Kitzhaber’s opening salvo of the campaign, at least to those who understand the enormity of the PERS challenge.

PERS is a multi-headed beast, and Kitzhaber is proposing to lop off a few of those menacing heads. If that’s the best we can manage, some will say, we’ll take what we can get and be grateful for the governor’s leadership. But it’s not enough.

Oregonians thought the PERS reforms of 2003 would solve the crisis, but far from it. Some of those changes were rejected through subsequent legal challenges, while other reforms simply failed to stem the practices that most contribute to the PERS problems.

Proponents of reform agree that public employee retirement payments must be fair and sustainable, and that changes to the system must withstand legal challenge. Leaders have clearly identified key areas of reform needed to reverse disturbing PERS financial trends, with more finely tuned details to come.

Make no mistake, there is a huge problem. The PERS board acknowledges an unfunded liability of $16 billion, while an independent worst-case-scenario study says the shortfall is $90 billion. Widespread teacher layoffs and public service cutbacks attest to the immediate impact, and there’s no end in sight without reforms.

Some will assess the political landscape and settle for the best we can get. We urge Oregonians to resist half-way measures, and to join the growing chorus of voices that see 2013 as an opportune time to cut through the rhetoric and make the critical decisions needed to stabilize public budgets.

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Comments

07:56 pm - Thu, November 15 2012
Kona said:
This will be very interesting. The education community has tried to derail every proposed reform for the last three decades. Now the problems from PERS are biting the newly hired employees, those not hired and mostly the students of Oregon. There is an attitude of "who cares" among the unions who control the teachers and most other public sector employees.

The necessary reforms should not be placed solely on the backs of Tier II (1995) and OPSRP (2003), nor the taxpayers of Oregon. The only tax that should be proposed would be on all of the PERS Tier I recipients who are receiving more than 80 percent of their final salaries. The majority of Tier I employees who worked more than 35 years are receiving more than 100 percent of their final salaries. That is where the problem is (and most people acknowledge that) and those should be the people taxed. Is it fair to tax cigarette smokers to pay for PERS? Is it fair to tax property owners to pay for PERS? Is it fair to ask any third person group to pay for PERS? The answer is "No". Tax the group that is receiving the windfall.
07:28 am - Fri, November 16 2012
Don Dix said:
From article -- "Oregonians thought the PERS reforms of 2003 would solve the crisis, but far from it"

Where does that statement originate? And who are those 'Oregonians' that really believed 2003 reform was the cure? Most believed it was a poorly placed band aid!

Oregon's government is controlled by the public employee unions -- you play ball under union rules or you go away. The governor and legislature can make all the noise they wish, but just like all other attempts to reform, the unions must agree (or the bill never gets out of committee).

I would be very surprised if there were even a 'handful' (5) of Demos willing to risk their government position to support real reform (and by taking a side opposite the unions, that's the risk). That number will be evident soon.

And since all those charged with the responsibility of reforming PERS are also recipients of the program, does anyone really believe the legislature will correctly represent the people of Oregon? It hasn't happened for 30 years, or more! And when any reform actually reaches the courts, the deciding judges, PERS members also, would be handing down judgements to their own benefits.

Pretty tight packaging, wouldn't you say?





08:56 am - Fri, November 16 2012
Dances with Redwoods said:
Two words----> reprehensible acquisitiveness.
09:05 am - Fri, November 16 2012
Dances with Redwoods said:
And on that note, I'm going to turn-off my computer now and hit every twinky outlet in Grand Ronde.
12:16 pm - Fri, November 16 2012
DM said:
Yeah, the unions did a number on the country today...18,500 jobs gone and no more twinkies :(
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