PERS will take bigger bite of local budgets in 2013

Written by Chris Collins October 01, 2012 01:32 pm

By Chris Collins

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The Baker School District’s bill for its current and former employees’ pensions will go up by about half a million dollars per year starting July 1, 2013.

Baker City’s and Baker County’s budgets also will have to divert more money into Oregon’s Public Employees Retirement System (PERS) during the two-year biennium that starts next July.

The PERS board on Friday approved increases for about 900 public employers statewide.

In total, school districts, cities, counties and other public agencies will spend $900 million more during the 2013-15 biennium.

In his monthly report to the Baker School Board Sept. 25, Doug Dalton, the district’s chief financial officer, said the district’s PERS obligation was expected to increase by 5 percent in the next biennium. 

That’s a $500,000 yearly increase to the district’s $10 million payroll costs.

“This 5 percent bump is with us for the foreseeable future,” Dalton told the board.

“This 5 percent bump is with us as far ahead as we can see,” Dalton said.

He told the board that PERS will account for about 29 percent of the school district’s payroll costs starting July 1.

The current figure is about 24 percent.

Public employers are assessed for PERS at three separate rates.

One covers employees in PERS Tier 1 and Tier 2 programs, neither of which apply employees hired in the past decade or so.

A second rate covers those employees, and a third rate applies to police officers, firefighters and other public safety employees.

According to a statewide summary of PERS rates, Baker City’s rate for Tier 1/2 employees will increase on July 1 from 16.04 percent of payroll to 20.56 percent.

The rate for more recently hired workers will rise from 10.77 percent to 15.14 percent, and the rate for public safety employees increases from 13.48 percent to 17.87 percent.

Jeanie Dexter, Baker City’s finance director, said this morning that although she hasn’t received the city’s actual figures for the coming biennium, the above increases “are not small.”

“It reflects what we were expecting it to be,” she said.

Baker County’s figures are:

• Tier 1/2 employees: 13.51 percent to 17.69 percent.

• More recent hires: 8.96 percent to 13.23 percent

• Public safety employees: 11.67 percent to 15.96 percent.

The Oregonian reported Friday that several public officials told the PERS board that the higher rates will force public agencies to lay off workers and cut services.

The officials asked the PERS board to set up a committee to look at possible cost-cutting reforms to the retirement system.

Terri Harber and Jayson Jacoby of the Baker City Herald contributed to this story.