by NW Spotlight
The Oregon budget submitted yesterday by Democrats does little to address the PERS problem – and so PERS will continue to eat away at government budgets across Oregon. It will continue to stress school budgets as well as other essential government services.
In a news conference after the Democratic co-chair’s budget was released, the Oregon House Republicans noted that Republicans were excluded from the development of the budget.
Oregon’s PERS costs double Washington State’s retirement system
Harry Esteve at the Oregonian wrote an article on the Dem’s budget yesterday quoting John Tapogna, an economist with EcoNorthwest: “Oregon’s PERS problems would only worsen under the Democrats’ budget proposal. Oregon’s public retirement system costs twice as much as Washington’s.” Tapogna was also quoted saying “The [Democratic] co-chair’s budget falls short on addressing the larger issue of meaningfully reducing long-term liability.'”
Cause of PERS problems – past excesses
More than 90% of the $14 to $16 billion PERS unfunded liability is owed to PERS members who have already retired or were hired before 1996.
A 2011 report on PERS by the City Club of Portland summarized “PERS today is heavily burdened by the past. Before earlier legislative reforms, members received a generous guaranteed annual return on their burgeoning retirement accounts. Members dominated the PERS governing board, frequently crediting accounts with more than double the generous guaranteed rate, sometimes as high as 20 percent in a single year. Many public employees retired with PERS pension payments equaling or even exceeding their salaries at retirement, with Social Security benefits as icing on the cake.”