Oregon’s Democratic legislators are in denial about the Public Employees Retirement System.
Most outrageous is their plan to delay making scheduled payments of $350 million in the next two years, effectively putting that amount on a credit card, compounding the problem for future years.
Dozens of bills are before the Legislature to reform PERS. The governor, the GOP, and the Oregon School Boards Association have each offered plans.
The Democratic proposal, released Monday by state budget writers, is by far the least aggressive, failing to address the major built-in cost drivers in the system.
The Democrats did agree with other plans on one issue: Stop sending reimbursements for state taxes to out-of-state retirees who don’t pay those taxes.
On cost-of-living increases, the Democrats would save less than half of the amount in the governor’s plan, using a complex method of graduated limits.
And they didn’t include other ideas proposed by the GOP and by the school boards association, including lowering the 8 percent guaranteed earnings rate in annuity calculations, and limiting the use of accumulated sick pay and vacation pay in figuring pensions, among others.
The Democratic plan would save $805 million this biennium, compared with the governor’s $865 million, the GOP’s $1 billion and the school boards association’s $1.3 billion.
Saving in this biennium, however, is only one of the issues. If the longer-term PERS problems are not resolved, the state will continue to struggle to meet its obligations in every way, including education, health care, infrastructure and public safety.
With Democrats in control of the Legislature, it’s all the more critical that they face reality and deal effectively with the PERS crisis. If they don’t, we’ll all pay the price for years to come.