Happy 10th Birthday Oregon Catalyst!

OC_10th birthday_thb

by NW Spotlight

The first Oregon Catalyst article was posted ten years ago tomorrow, on December 2, 2005. The article was titled Achieving Fiscal Sustainability, and was written by Jay Bozievich, who was a member of the Lane Community College Board of Education at the time. Jay now serves on the Lane County Board of Commissioners where he was first elected in November, 2010.

Jay’s article from ten years ago is just as relevant today!

The official welcome to Oregon Catalyst was posted on December 6, 2005:

“This Blog will be the collection of the best free-market and conservative minds, ideas, and commentary in Oregon. Expect a new update every week-day. We encourage all freedom-loving Oregonians to join the cerebral revolution by responding to the daily commentary. Your input is more important than you might think.”

Other articles posted on the first day of Oregon Catalyst (December 2, 2005) were:

This 2005 gem by Larry Huss contains this interesting, prescient and relevant discussion on PERS:

“PERS is a mess that continues to threaten to throw Oregon into a financial blackhole. The politicians, all beneficiaries of its excesses, studiously ignored the problem for years out of fear of the public employees unions. In 2002, Ron Saxton made the issue a central theme of his primary campaign for governor. While Saxton lost the primary, the governor and legislature was forced to acknowledge the problem and participate in a reasonable solution. Unfortunately, Oregon’s Supreme Court, also beneficiaries of Oregon overblown pensions system, axed the major reforms and returned Oregon to a state of fiscal crises. In doing so, the Supreme Court attempted to wall off any further attempts to reform the system.

In the aftermath of the Supreme Court’s decision, I spoke with Ron Saxton. He was angry and frustrated. He denounced the court’s decision as outrageous and purely political and shortly thereafter authored an article in BrainstormNW that suggested the only solution left was to fire all of Oregon’s public employees and hire them back under a new less burdensome pension plan. WHAM! The politicians and pundits poured out in droves to denounce Saxton’s solution. Curiously, not one of those critics offered an alternative solution to a very real problem.

Did Saxton really mean he would fire all the public employees? I doubt it. Saxton is a pretty sensible person. He’s not going to shut down government to prove a point, but he is willing to go to extremes to force a reasonable solution to a real problem. In his proposal is the germ of a real solution. You can’t fire all of the public employees but you can systematically begin to privatize functions performed by public employees and thus eliminate the burden of PERS as to those employees. At a point in time, the public employees unions, threatened with the continuing loss of membership, will come to the table and bargain for a solution. And don’t worry about the Supreme Court voiding this solution because Saxton was right when he said the court’s last decision was purely political. Once the public employees unions give the nod to a solution, the court will find a way to uphold it.”

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Posted by at 06:26 | Posted in Uncategorized | 3 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Bob Clark

    The Catalyst is a fun blog. You know an interesting topic I got into a little bit in 2014 in a successful campaign to stop Wheeler’s new educational slush fund (I think it was referred to as the Opportunity fund and was defeated at the ballot box with the help of Steve Buckstein and Cascade Policy Institute in November 2014) is PERS as a state managed investment return vehicle.

    Wheeler boasted in 2014 how PERS had this like 10% annual rate of return on its investments. But in doing my article on the subject, I could only find about a 4 to 5% annual return on investment over the period 2002 to 2013; and this was an actual under-performance against the U.S stock market bench mark index, the S&P 500.

    PERS also has significant management fees paid to big wall street firms. For a long time, this is what caused the Oregon 529 college savings program to be sub par relative to other state college savings programs. (Eventually they did let Vanguard offer investment products so as to escape the high management fees of other Wall Street firms.)

    Currently PERS is assuming a 7.5% annual rate of return on investments; but this still seems way too high. Moody’s I hear advocates for a 3.5% rate return assumption for public pensions. The stock market seems to be returning about 9% when including dividends over its longcourse dating back to the mid 1950s. But PERS is suppose to be a balanced approach including bonds and not just stocks. And bonds are only returning around 3% currently and for the forseeable future. Then too, PERS carries significant investment management fees, and so, the 4 to 5% annual return rate I think I discovered in my analysis of PERS for the 2002 to 2013 period may be a good guide for going forward, rather than the 7.5% assumed most recently by PERS Board.

    A lower return means the actual unfunded liability is much higher than reported.

    One way of looking at the so-called under funding of public schools is it lies at the door steps of PERS. We Owe our lives to PERS even if we are on the outside looking in. We should be happy seeing our tax dollars going to letting our state and local employees and administrators retire as early as 51 years old at full salary, or even better in some cases.

    • Wakeup T’dute

      OC, indeed, a fun blog; but poignantly not to the secular BlueOregon entourage of left wing stage hands like Appell and Blair, et al, who vaunt it to be a Dem blank canvas for their convocation attending a communist communion with left wing New World Order antichrist socialism-rye-breds.
      Correct blokes?
      Den dare’s Nadia Islam haute couture: To wit, what’s up with the residuals attending her colonoscopy?
      In toot, fleas bare it all.

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