Reversing course on PERS bills

Written by Baker City Herald Editorial Board October 03, 2012 08:57 am

It’s no secret that Oregon’s public employees retirement system has an unhealthy appetite for the tax dollars that feed state government as well as our cities, counties and school districts.

But the level of PERS gluttony is becoming as painful as, well, a stomachache.

Or a bleeding ulcer.

Last week the PERS board announced that public agencies, starting July 1, 2013, will have to divert an even larger chunk of their budgets to the retirement system.

On average, PERS will account for 21.4 percent of public agency payrolls.

The average figure is higher for school districts — 26.7 percent — and higher still for Baker School District.

Starting in July, the district will spend 29 percent of its payroll dollars on PERS.

To put it another way, almost 3 of every 10 payroll dollars won’t be available to benefit students, whether by hiring new teachers or buying new textbooks.

There is no magical cure to the PERS woes.

Oregon courts have concluded — and rightly so — that pensions negotiated in legally binding contracts with employees must be paid as promised.

We’re not chastising public employees. They worked for their pensions and they earned the money.

The villains are the lawmakers and other officials who created a system that reads more like the Christmas gift list written by a 6-year-old than a reasonable retirement program. Worse yet, many of its authors, including lawmakers and judges, were then allowed to join the system.

The most egregious aspects of PERS — who wouldn’t like a guaranteed 8 percent return on their pension investments regardless of what happens on Wall Street? — were done away with more than a decade ago. The current system, though still more generous than many private sector workers get, is not ridiculously so.

Unfortunately, with tens of thousands of current and retired public employees still covered by the old rules, public agencies will continue to pay for the follies of the past.

Friday’s announcement by the PERS board is merely the latest example.

But the PERS debacle is not absolutely a lost cause.

The Legislature has over the past few sessions considered bills that would reduce the cost of PERS without violating contractual obligations.

A couple examples: trimming cost of living increases, and getting rid of a benefit for retirees who move to another state.

Lawmakers, though, have done nothing of consequence.

With school districts such as Baker’s forced to take ever more dollars out of classrooms to satiate PERS, inaction is not acceptable.

At a minimum, the state should create a committee that has one task: List all the potential options for reforming PERS and hand over the findings to the Legislature when it convenes early next year.

Then public employers, as well as the public in general, should demand that lawmakers do something to reverse the unsustainable trend in government budgets.