One powerful argument against reforming Oregon’s state pension system is that the courts won’t allow it. For legislators hesitant about making changes, it’s a reason not to try.
That’s a convenient excuse, but it’s short-sighted and mistaken.
The Oregon Department of Justice has prepared a legal analysis detailing arguments to support Gov. John Kitzhaber’s proposal to limit cost of living increases to the first $24,000 of income for retirees in the Public Employees Retirement System. The analysis concludes there are no guarantees, but there are reasonable arguments that have a chance of success.
Meanwhile House Speaker Tina Kotek, D-Portland, has asked legislative counsel for an opinion on the issue, and PERS Coalition lawyer Greg Hartman has argued the change would be illegal.
Two things are for certain amid all this legal maneuvering: 1) There’s no way to know for sure what the courts will allow until legislation is passed and challenged; and 2) Oregon desperately needs PERS reform.
That said, it’s an essential exercise to consider possible legal arguments and to design legislation with the best chance of passing legal muster. The DOJ analysis, for example, suggests that some different ways to structure PERS COLA limits might have a better chance of gaining approval. That could be critical information for legislators as they consider various proposals this session.
The governor’s COLA proposal is designed to save $810 million every two years, almost enough to compensate for the expected increase in employer payments starting in July. It’s only a piece of the reforms needed to properly balance the state’s obligations to its retirees with its obligations to education, public safety, health care, infrastructure and many others. Without it, serious cuts will be needed. For example, Bend-La Pine Schools estimates it will lose 96 teachers or cut an additional 16 days from the school year if the governor’s budget is approved without the savings he seeks from PERS.
Lawmakers need to work diligently to overcome legal limitations to PERS reforms, not use them as a justification for neglecting the state’s critical needs.