Educators cautious on PERS reform

Kitzhaber aims savings at K-12 schools

Ben Botkin / The Bulletin /

Published Dec 12, 2012 at 04:00AM

Central Oregon educators have mixed sentiments about Gov. John Kitzhaber's budget proposal, which seeks to generate more money for school districts by reforming the Public Employees Retirement System.

At first glance, the governor's proposal for the 2013-15 biennium looks like a big boost for school districts struggling with increased costs to fund the pension system. Kitzhaber proposes spending $6.15 billion for K-12 schools in Oregon, of which $253 million comes from savings in PERS. Those changes entail capping PERS cost-of-living increases and cutting an out-of-state credit for pensioners.

The proposed changes to PERS are a good start toward reform, but not enough to fix the problem altogether, school officials say.

“It's good to see the governor actually step out and take a public stand that we do something about PERS,” said Ron Wilkinson, superintendent of Bend-La Pine Schools.

The two pieces identified by the governor are necessary, Wilkinson said. But, he added, more long-term work is needed to keep PERS and school districts financially healthy.

PERS — and reforming the system — is a conflict impacting people beyond educators planning retirements.

For Bend-La Pine Schools, the anticipated increase to PERS costs next year without any changes amounts to about $4.5 million — or nearly $10 million for the biennium.

If the governor's proposal were to go through, the district PERS system still would pay an increase next year of about $1.5 million.

“The concern is that it doesn't do enough,” Wilkinson said. “It's a good starting point.”

To put it in perspective, $4.5 million amounts to about 60 teaching positions, Wilkinson said. The $1.5 million would pay for about 20 teachers.

That doesn't mean the district would trim teachers, as it would explore all options and look at the overall budget picture, Wilkinson said.

“One of the last places we want to cut is teachers,” he said. “I would never say that's the answer of what we're going to do.”

But there are no quick, easy answers, either. School districts devote much of their budgets to personnel, about 85 percent.

Kathy Stienert, director of fiscal services at Redmond School District, echoed the sentiment of Bend-La Pine Schools.

“The bottom line is that the governor's proposed funding really doesn't get us to being able to restore all of the days and all of the staff that we've had to cut,” she said. “ ... We're more than delighted that he is supporting PERS reform; it's just not enough.”

Without changes to PERS, estimates of PERS increases for the 2013-14 school year leave the Redmond School District about $2.3 million short, which amounts to 13 school days or 30 teachers.

The governor's recommended reforms would only cover about half the district's projected increase, Stienert said.

“It's really going to take multiple changes to stem the negative impact on school district budgets,” she said.

Gauging the final outcome, Stienert said, is difficult because of other variables, like how proposed cuts to education service districts may impact the school district.

Sisters School District Superintendent Jim Golden said he is happy with steps for reform, adding that he hopes they will pass any challenges in court. He estimates that any savings for the district are 18 months to two years away.

Jefferson County School District Superintendent Rick Molitor said any reform efforts are welcomed.

“Anything will help,” he said. “What's been proposed really helps us maintain where we're currently at, but not necessarily reducing the obligation of the district.”

Lonn Hoklin, spokesman for Oregon School Boards Association, said the organization supports any effort to look at PERS that reduces the costs to school districts. But the legislative session — and the full discussion — has yet to begin, he said.

“It's just the beginning of the game,” he said. “It's the first inning. We don't even have three outs yet.”

What people are saying

Ron Wilkinson, Bend-La Pine Schools superintendent: “It's good to see the governor actually step out and take a public stand that we do something about PERS. The two pieces that he addresses are probably two of the pieces that need to be addressed. We clearly believe there are other things that need to be done that are the longer-term fixes. ... The concern is that it doesn't do enough. It's a good starting point.”

Kathy Stienert, Redmond School District director of fiscal services: “The bottom line is that the governor's proposed funding really doesn't get us to being able to restore all of the days and all of the staff that we've had to cut. ... We're more than delighted that he is supporting PERS reform; it's just not enough.”

Jim Golden, Sisters School District superintendent: “I believe all superintendents in our region are happy that the governor has taken the step to try and reform some aspects of PERS. Our hope is that this will pass muster with the Oregon Supreme Court, which we believe will end up hearing a challenge to these changes. So, any savings we receive is likely to be 18 months to two years down the line.”

Rick Molitor, Jefferson County School District superintendent: “Anything will help. What's been proposed really helps us maintain where we're currently at, but not necessarily reducing the obligation of the district.”

Lonn Hoklin, Oregon School Boards Association spokesman: The organization supports any effort to look at PERS to reduce the costs to school districts. But the legislative session — and the full discussion — has yet to begin, he said. “It's just the beginning of the game. It's the first inning. We don't even have three outs yet.”