Action, not words, on PERS

Written by Baker City Herald Editorial Board January 16, 2013 08:49 am

The parameters of the coming debate over PERS, Oregon’s budget-busting retirement system for state workers and many local government and school employees, are beginning to clarify.

And it looks to us increasingly likely that Oregonians will at long last find out whether Gov. John Kitzhaber truly is committed to reforming this system, or whether his pledges were mere posturing.

We hope it’s the former.

If the Oregon Legislature lacks the political courage to deal with PERS, then the retirement system will continue to force school districts to lay off teachers, and cities, counties and the state to pare services, all to ensure that retired public employees, who are the beneficiaries of one of the most generous pension plans in the country, don’t lose so much as a penny from their compensation.

On average, starting July 1, about $1 in every $5 that public agencies spend will go toward PERS. That average is higher still — 26.7 percent — for school districts.

In his proposed budget, Kitzhaber suggests a pair of changes to PERS that could save hundreds of millions of dollars:

• Stop compensating PERS retirees who live outside Oregon for Oregon income taxes they don’t even pay because they don’t live here.

• Allow cost-of-living adjustments for only the first $24,000 of retirees’ annual income.

Those amendments wouldn’t fix PERS — too many elements of the system, and in particular certain benefits which accrue only to Tier 1 employees, those hired before 1996, are locked in by contractual obligations.

But Kitzhaber believes that both of his proposals are in play, legally speaking.

But at least one of the state’s two big public employees unions begs to differ with the governor.

The American Federation of State, County and Municipal Employees (AFSCME), which represents about 24,000 workers (the Service Employees International Union represents a similar number of public employees in the state), opposes both of Kitzhaber’s ideas.

Ken Allen, executive director of Oregon AFSCME Council 75, told the editorial board of The Oregonian that he believes the cap on cost-of-living raises would be overturned in court.

Put simply, it appears probable that public employee unions, who are major supporters of Kitzhaber and other Democratic candidates, will contest any PERS reforms that cut into their members’ (or, more accurately, retired former members’) monthly pension checks.

We would hardly expect a different reaction from the unions, of course; they’re supposed to look out for their members.

But we’re far more concerned with keeping Oregon’s public schools and other vital services intact.

And protecting those government services will require meaningful action on reforming PERS, rather than empty rhetoric, from Kitzhaber and the Democrats who are in charge in Salem.