by Sen. Tim Knopp
Senator Knopp Warns of Budget Cuts if Legislature Fails to Fix PERS Now
Bend, Ore. – Earlier this week, Oregon’s Public Employee Retirement System (PERS) Board received an earnings report on the current status of the PERS fund investment. The report states that Oregon’s PERS fund fell by 4% in 2015, a loss of nearly $3 billion.
“The blow to PERS from the Moro court case left Oregon with an additional $5 billion in unfunded liability,” explained Senator Tim Knopp (R-Bend). “Now PERS is an additional $8 billion short of its target. This miscalculation in the rate of return on PERS investments is another hit that leaves Oregon pension holders less secure. If we don’t reform PERS now, Oregon won’t be able to honor its commitment to hardworking PERS recipients in the future without massive cuts to schools, senior programs and healthcare.”
The current unfunded PERS liability now exceeds $21 billion, up from $18 billion last year. PERS rates for school districts and local governments will rise in July 2017, forcing school districts to lay off teachers, reduce school days, increase class sizes, and cut programs like art and PE. Local governments will also have to make cuts to public safety and other critical services.
“The best reason to reform PERS is to protect our valuable public employees that will otherwise lose their jobs to budget cuts because of the PERS crisis. It will take courage to do the right thing for all of Oregon and it’s time for the legislature to do what it can to fix PERS,” said Senator Knopp.
“Oregon’s PERS mess won’t just affect public employees,” explained Knopp. “With unfunded liabilities growing exponentially, our kids and most vulnerable citizens will also suffer. If schools have to direct even more of their budget to pay for PERS, our classrooms and students will suffer and graduation rates will get worse. It’s time to get serious about reforming PERS before the hole gets too deep.”