By editorial board • 

Shoveling money in won't close PERS gap

Another budgetary storm is brewing in Oregon’s public pension system, according to figures shared last week with the pension system’s board and the five-member citizens’ panel that oversees its investments.

“The siren has already gone off on the first wave, which will crash over schools, municipalities and state agencies in 2017, due to the Oregon Supreme Court’s recent rejection of most of the pension benefit cuts enacted by the Legislature in 2013.”

Sound familiar? Think you might have just read this story Tuesday?

Well, it actually ran about this time last year. Stories like this appear around this time every year.

Tuesday’s story actually led off, “The cost of Oregon’s public pension system will increase about $885 million over the next two years, a higher figure than was previously projected. The new costs are 10 percent higher than previously forecast and 44 percent above the $2 billion per biennium that public employers are currently paying.”

Yes, PERS is the crisis that just keeps on taking. Here’s the problem in a nutshell:

1) Over the last three decades, Oregon’s Democratic Party has maintained virtual monopoly control of the state’s executive and legislative branches. 2) Oregon’s public employee unions have maintained virtual monopoly control of the Democratic Party, because they fund its campaigns. 3) Oregon’s unsustainably, over-generous pension program represents a member windfall the unions are intent on protecting.

There’s nothing mysterious about any of this. It’s just naked self-interest working its will on taxpayers, who seem unable or unwilling to muster effective action in response.

We lack the wherewithal to keep funding public employee pensions at this level. But so far at least, we also lack the fortitude to prune pension provisions enough to make the taxpayer burden bearable.

There are only two ways this massive unfunded liability is ever going to go away:

1) Voters are going to rise up and make different choices at the polls, electing representatives willing to tackle this distasteful cost-cutting head-on. 2) Voters are going to sucker for a subterranean solution that Oregon’s public employee unions have slipped into Initiative Petition 28, apparently headed to the ballot as Measure 97, which they are ballyhooing as a tax not just on the other guy, but on the evil, corporate, out-of-state, fat-cat other guy.

The measure would exact a 2.5 percent tax on in-state sales exceeding $25 million, producing an estimated $5 billion a biennium. That could buy a lot of new programs and services, but PERS is the gaping black pit of public finance, so you can bet the sales tax windfall would get shoveled right in.

The measure would tap low-margin home-grown companies like Wilco, not just out-of-state goliaths like Walmart, and companies on the verge of going under, not just those amassing riches. It would tap a product’s producer, processor, distributor and retailer by turn, driving up prices. In the process, it would discourage investment, expansion and employment, thus stalling the economic engine responsible for future tax revenue.

Let’s close the PERS gap by scaling back an unsustainable commitment, not by enacting an economy-killer we’re sure to regret.

Comments

Don Dix

From the article ... "The measure would exact a 2.5 percent tax on in-state sales exceeding $25 million, producing an estimated $5 billion a biennium."

Fact -- Oregon voters have repeatedly said no to a sales tax (9 times). But there is always some taxing legislation disguised to seem not a sales tax.
Fact -- Every few years, some form of tax is pushed by the Ds to benefit the unions.
Fact -- Every complicit elected D in Oregon's government is enriched by union campaign contributions.
Fact -- Many Oregon Ds vote strictly party line, which is an uniformed and feeble way to exercise the right to vote.
Fact -- The Ds in the legislature (and the governor) convinced the voters that special sessions on even years would address pressing situations such as infrastructure (M 71).
Fact -- Every special since 2010 have produced one or more revenue-raising tax without bipartisan support, which is usually written by unions, pushed by unions (and Oregon's brain-dead elected officials), and is designed to increase the union money drain.

In my opinion, the unions will not relent or do anything that goes against the mission (create more revenue for members at all stages) -- who cares if the state goes under!

Way back in the 70s, a local teacher said this, "The public employee unions eventually are going to break this state". Who actually knew he was correct 40 years ago? Not the people who are elected to 'represent the citizens of the state'(they don't see it yet)!

If one sees zero or little concern for the state in general, and are seldom 'represented' by elected officials, isn't it time to change the sheets (the union stench is overwhelmingly present)? What happens when businesses leave or refuse to open because of the greed of union demands? Nobody in Salem cares, do you?

Mike

Don. I agree with you on almost everything. Those police, fire fighters, teachers,judges, the bloated state bureaucracy, and all the public employees who fix streets and keep water flowing are a greedy bunch. The Ds have been unchecked in their power and like you I think they have not willing to listen or looked for compromise. Unfortunately the Rs if they were in power would likely be acting the same way. We need a third Party. If a third party got enough in the State House and Senate to keep the Ds and the Rs from total power, a third Party might be able to force the Ds and Rs to talk and to find compromises. In seems clear the two party system the way it as evolved, or devolved, is not working for us.

Don Dix

Mike -- I have no beef with the working members of PERS. Work is work, no matter the job description. It's the union reps and complicit Ds in the government that burden the entire state financial situation.

Third party? Not likely in the near future. In fact, the problem is political parties in the first place. Pressure from lobbyists in all directions, encouragement from party leaders, and very little concern for what is best for all.

Most politicians (read winners) begin campaigning for the next election as soon as the present election is over. Returning favors (to contributing supporters) is usually the first order of political business.

Here's the rub -- The definition of bribery is thus -- The offering, giving, receiving, or soliciting of something of value for the purpose of influencing the action of an official in the discharge of his or her public or legal duties.

Does the last paragraph sound familiar? Do you remember 'Old Do Nothing Governor' Kulongoski saying to the union reps, "It's us against them" during his last election cycle? He seemed to soliciting, yes? And the unions responded! That's a pretty clear violation, in my opinion, but today's politicians are so immersed in the act (and money) they cannot resist, nor will they be called out or punished by peers who also participate.

The fact that PERS unions basically control the state through elected officials should send alarms all over, but once again, blind party-line voting drowns out the sensible approach.

The outcome will not change if the status quo is allowed to continue. The means of change starts with ousting the complicit representatives who only listen to the sound of money -- in Oregon's case, union money!

Seabiscuit

Just a little confused by some of the PERS information. It really doesn't appear that the court rejected "most". Some yes, but quite a bit was left in tact?????????

http://www.oregon.gov/PERS/docs/general_information/pers_facts.pdf

"...Oregon Supreme Court’s recent rejection of most of the pension benefit cuts enacted by the Legislature in 2013.”

http://www.oregon.gov/pers/RET/docs/perspectives/2015/retired_8-1-15.pdf

Two pieces of 2013 legislation, changes in the annual cost-of-living adjustment (COLA) and eliminating the tax remedy for those who do not pay Oregon state income tax because they do not reside in Oregon, were challenged in the Oregon Supreme Court.
In a decision released April 30, 2015, the Oregon Supreme Court UPHELD elimination of the tax remedy payments to non-residents.

The COLA reductions were declared unconstitutional as applied to benefits earned PRIOR to those bills’ respective effective dates. HOWEVER, the REDUCED COLA could be applied to the benefits earned AFTER the bills became effective.
The Court also VOIDED the supplementary payment program, which was part of the challenged legislation.

As to the tax, I couldn't agree more. It needs to be voted down!

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