Gov. John Kitzhaber stepped up to the retirement reform plate over the weekend, and that’s good news for taxpayers.
Speaking Saturday to the Oregon School Boards Association, the governor said changes are necessary to balance the costs of the Public Employees Retirement System with the need to put dollars in the classroom.
Without reform, the cost to educate a child in Oregon will increase by nearly $1,000 in the next budget cycle, he said, with about half of that coming from increased costs of PERS, and little of it improving that child’s education. He blamed stagnant funding and PERS for teacher layoffs, larger class sizes and fewer days in the school year.
The governor said changes in PERS, plus finance reform and reductions in the costs of health care and public safety, will free millions of dollars to allow for investments in education.
We’ve been waiting for a commitment from Kitzhaber on PERS, hoping he would use his bully pulpit and his union support to lead the way. The speech was a positive sign that he understands the critical problem PERS represents and his unique position to influence needed reforms.
The speech didn’t detail how Kitzhaber would seek to change PERS, but he told The Oregonian he supports reducing cost-of- living adjustments, decreasing or eliminating the so-called “pickup” in which government pays for employee contributions and dropping the tax benefit for retirees who move out of state. Those are among numerous suggestions made by candidates and reformers as the burden of PERS has become widely understood in recent years.
Any successful reform will also need to address two other concerns. First is the legality question. Some previous efforts were rejected by the courts, leaving legislators wary of going down that same road. And second is the fairness question for PERS retirees. These are not insurmountable, but require careful consideration. We urge the governor to engage those with other plans and work to build a political consensus around the most effective package of changes.