Tax hikes to get PERS reform is no bargain

by Dan Lucas

Governor Kitzhaber has been travelling the state to hawk his Grand Bargain 2.0. The “Grand Bargain” is: we’ll only pass meaningful PERS reform if we can also raise taxes. What on earth does passing meaningful PERS reform have to do with raising taxes?

Just got $2 billion more already – in the legislative session that just ended, the state general & lottery funds’ budget increased by a staggering $2 billion. It went from $14.7 billion for the last biennium to $16.7 billion in the current 2-year budget cycle. That $2 billion increase was accomplished without a tax increase – it just took an improving economic outlook.

So why do Governor Kitzhaber and other Democrats think we need $200 million of tax increases before we can pass meaningful PERS reform? Reform that the Governor believes can shave $5 billion off of the PERS unfunded liability.

The cost of paying for the PERS unfunded liability is crippling budgets for school districts and local governments across the state. Adding $200 million more to the state budget, even if it all went to the K-12 budget, would only provide minimal help to schools once it got divided for all the school districts. And it would provide NO help for local governments. Meaningful PERS reform, on the other hand, would help everyone.