We’re starting to believe that reform of Oregon’s Public Employees Retirement System has moved from a “nice to have” to a “must have” for Gov. John Kitzhaber.
Kitzhaber has distilled the problem to something Oregonians can understand. Without changes, the cost to educate a child in Oregon will increase by nearly $1,000 in the next budget cycle. About half that increase comes from the increased cost of PERS. That means PERS is plucking teachers from the classroom, precipitating layoffs, bigger class sizes and shortened school years.
Kitzhaber has offered a package of three reforms he would like to see the Legislature pass in 2013.
He supports reducing cost-of-living adjustments for retirees who get more than $24,000 a year from PERS, reducing the so-called “pickup” in which government pays for employee contributions and dropping the tax benefit for retirees who move out of state.
We know just how much savings that could create. It could yield $1.3 billion in savings per biennium, The Oregonian reported.
The key question is how much political capital will Kitzhaber spend to make the reforms happen?
The answer should be: a lot. We’ll know for sure when he releases his budget on Nov. 30, but look at what the state’s facing.
The recent state forecast means the Legislature needs to cut some $700 million in costs to maintain current service levels.
Kitzhaber has made a commitment to shift Oregon from a place that spends money fixing problems on the back end to stopping them before they occur. He wants to make investments that boost the economy through enhanced economic opportunity. He needs money to invest in health care and education. He needs the $1.3 billion in savings per biennium.
PERS reform becomes a must have. It will be embedded in his budget.