PERS reforms were needed, but Oregon leaders still reluctant to discuss pension issues – Oregon Capital Chronicle
For decades in Oregon, the Public Employees Retirement System (PERS) has been the source of highly contentious tax issues for the state, its school districts, cities, and counties.
But now that the system’s rising costs have finally leveled off, at least temporarily, the politicians who helped craft its much-needed course correction don’t want to talk about it. Or, if the topic comes up, they try to blame others for what they’ve accomplished.
This was evident during an Oregon AFL-CIO gubernatorial debate earlier this month between Democrats Tina Kotek and Tobias Reed. When asked about his role in co-sponsoring, then muscled through the enactment of a modest set of PERS adjustments as Speaker of the House in 2019, Kotek diverted attention from his accomplishment. Instead, she blamed former state senator Betsy Johnson, a likely contender for governor in the general election, for forcing her hand and tying the PERS package to a deal for new income.
PERS has always been a difficult issue that governors and legislators have approached at their peril. And, like many difficult issues, it has generated its share of denial, blame-shifting and hypocrisy.
Deniers were vow blind to the system’s claims on budgets and services. Passers-by were happy to blame the courts for their inaction. But the honors of hypocrisy belonged to those who whispered their support for reforms in private but spoke against them in public.
When the pressures grew in the 2019 Legislature and the PERS package joined at the hip with a major corporate tax, Democrats were forced to face the reality of PERS’ impacts on budgets. To advocate for increased funding, they needed to ensure that PERS would not claim the lion’s share of that funding for schools and other services.
Republicans, with a few notable exceptions, were happy to let Democrats take the lead — and the heat. In fact, a Republican senator who had previously told me he supported the PERS package then told me he would vote against it to let the Democrats “bake in their own juices.”
(Disclosure: I participated in the PERS cost containment defense on behalf of the Oregon Business Council in 2019 on the understanding that any PERS savings would remain in government budgets for services and personnel. I testified in favor of the final package in committee hearings and had conversations with lawmakers on which I base my observations here.)
All but three Republicans voted against the PERS package and the business tax. So I shouldn’t have been surprised when the Republican Senate candidate in my riding flooded voters with mail accusing the Democrats of gutting the PERS.
Meanwhile, there were Democrats who voted for the PERS package for all the right reasons — not just as part of a deal for new revenue, but as a necessity to ensure that more of our taxes would stay in the classrooms. But those lawmakers had to overcome challenges from their left in the 2020 primaries. They prevailed, which makes the reluctance to talk about what the 2019 package accomplished all the more disappointing.
It was not a matter of half a loaf for the officials. They got a big chunk of new revenue, budgets that can better support staffing and salary increases, and a more sustainable pension system. In exchange, they had to give up future benefits earned on salaries above $195,000 a year (one of the sources of those six-figure pensions that The Oregonian quotes every year) and divert amounts ranging from 0.75% to 2.5% of future contributions to a separate retirement savings fund to help pay off pension plan obligations.
I understand that public service unions see things differently. I heard that loud and clear when I testified in support of the package. But what bothers me most is that their opposition continues to escalate in a way that prevents any honest discussion of the issue. Even now, three years later, when some of the unions’ staunchest political supporters should take credit for hammering out a long-awaited compromise that has bolstered school budgets at a critical time for our children, denials and transfers of dollars continue.
The PERS is now more durable and more defensible, but there remains a problem that defies honest discussion.