The employees of the city of Bend tried to do something special recently. The city’s three unions joined with management to agree on a statement about reforming the state’s Public Employees Retirement System or PERS.
It’s something City Manager Eric King has been exploring for a while, trying to find points of agreement between labor and management to give the Legislature guidance and support. But the agreement they found is not going to do much to advance reform.
The document says:
• They are committed to working together toward meaningful reform efforts.
• Solutions should honor commitments to existing employees and ensure the sustainability of the plan.
• There must be mutual compromise.
• And intergenerational equity should be a factor when designing benefits for new PERS employees.
How is the Legislature supposed to reform a $16 billion unfunded liability based on that? There should be compromise but honor existing commitments?
The statement goes on to suggest that PERS reform should incorporate discussion of “the revenue side of the equation.” It declares the state’s taxation system is “inequitable,” “inflexible” and insufficient to provide public services.
That may be. If you want to doom PERS reform, though, all you have to do is insist that it must go hand- in-hand with state tax reform. If the intent of the statement is that the two be inextricably linked, PERS reform will be inextricably linked to nowhere. The Legislature should not make progress on one dependent on the other.
The statement also does not take a stand on any PERS reform concepts. The statement says “the committee does not have the expertise to formally evaluate specific PERS reform concepts.”
If they feel that way, that’s either an unfortunate acknowledgement of their inability to understand the proposals on the table or an indictment of Gov. John Kitzhaber’s explanations.
What the Legislature is going to be doing is debating Kitzhaber’s proposals. He has specifically called on the Legislature to cap annual cost-of-living increases at $480 for each retiree. Most PERS retirees — 53 percent of them — would not be affected by the proposed cap. That reform would produce about $810 million in savings this biennium.
Kitzhaber’s other proposal would stop reimbursing out-of-state PERS retirees for Oregon income taxes they do not even pay. That would add about another $55 million in savings for the biennium.
City employees or anyone in Central Oregon who wants to send a clear message to Salem should tell their legislators how they should vote on those proposals.