The bad news about the growing unfunded liability in the state’s Public Employees Retirement System pension fund is that what’s owed is now pegged at $25.3 billion. That means that in the 2019-2021 biennium, Oregonians, whose taxes feed the PERS pig, will have to shell out $1.4 billion more than they’d expected. They had already expected to pay out more than a $900 million jump in the current two-year budget cycle.

The increase for school districts alone would hire some 2,650 entry-level teachers. Put another way, it would pay for enough teachers to replicate the faculty of the entire Bend-La Pine district, with its roughly 775 teachers, nearly three and a half times over.

Staggering as those figures are, they’re not the whole story.

First, the new rate of return that the PERS board assumes it will earn on its investments — 7.2 percent — may well be too high. Analysis done for the PERS board was not so optimistic. If PERS does not earn that 7.2 percent, the unfunded liability is going to explode upward again.

There’s another problem, as well. The PERS board has “collared,” or capped, the increases in the amount that state and local government agencies must pay into the system in a given year. That helps keep today’s schools and other government agencies running but adds to the total amount owed in the long run. The collar doesn’t lessen what agencies owe; it merely serves to delay payment of the full bill.

If you’ve ever had problems paying off a credit card, you know what that means. It would be like somebody putting a cap on how much of your credit card debt you could pay every month. It would make paying that bill easier every month, but it wouldn’t help in the long run. Interest continues to grow, and you end up paying even more than you planned to when you started.

The PERS problem was bad and it’s now worse. The state cannot expect to raise taxes on businesses and individuals enough to correct it without damaging the economy. It must make further reforms to PERS, something the state Democratic leadership has refused to touch.

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