If the 2013 Oregon Legislature is to be remembered for anything, it likely will be how its members dealt with the very real problems embedded in the state’s Public Employees Retirement System. Republican lawmakers have one plan, Democrats have another, and Gov. John Kitzhaber, also a Democrat, a third.
Rep. Peter Buckley, the Ashland Democrat, summed it up rather neatly during hearings on the Democratic plan Wednesday. The state, he said, has made two promises over the years, and it’s going to have to break one of them.
“We’ve promised retirees and workers a certain benefit package they have worked for many decades,” Buckley said, and “we’ve promised our kids educational opportunities at least as good as the ones we had when we were growing up.”
Though Buckley himself has the question right — which promise must lawmakers break — he and his fellows have, unfortunately, picked the wrong answer. Rather than opting for real reforms to a system that’s not only hurting schools but playing havoc with city and county budgets, legislative Democrats have chosen Band-Aids and heads in the sand.
Thus, they’ve said they’ll tinker with the guaranteed annual 2 percent cost-of-living increase public retirees now get, cutting oh, so gradually as benefits rise. Never mind that the increase is given even when the cost of living remains flat or actually goes down.
They do agree with both Kitzhaber and Republicans that sending out-of-state retirees a bonus each year to cover taxes they would pay only if they lived in Oregon doesn’t make sense. Unfortunately, they still fail to see the folly in simply delaying the date when government agencies must begin to make up losses PERS investments suffered during the recent recession — something the PERS executive director himself understands.
Moreover, to come up with the money they hope to give to schools — slightly more than the governor would, substantially less than what Republicans proposed — they must come up with some $275 million in increased tax revenues.
But they cannot force tax increases through without help from Republicans in both houses, and Republican members are unlikely to consider any tax increases without much more from PERS.