The 'grand bargain' might be grand scam
We don’t need to vilify the politicians controlling our state’s financial future, or the public employee unions that set the ruling party’s fiscal agenda. But it’s impossible simply to brush aside the disturbing, inconvenient facts that surround talk of Oregon’s so-called “grand bargain.”
The governor wants more reform of the Public Employees Retirement System, the financial elephant in Oregon’s living room. Good for him. PERS continues to consume huge sums of money that could finance public services, or perhaps even remain in the hands of taxpaying Oregonians.
However, the governor sits atop a union-driven party demanding more taxes as the price for PERS reform, and even a fair man such as John Kitzhaber can’t turn that tide. But consider the financial backdrop to this drama:
The Oregonian reported July 18 that Oregon’s general fund state budget will increase by $2 billion for the 2013-15 biennium, up to $16.7 billion. That’s a 13.6 percent increase from 2011-13 — the largest since 2007.
Forty percent of that increase went to schools. And if Oregon should truly reform PERS, there would be another huge boost to public education and other services by reducing what schools, state and local governments pay into PERS.
Instead, the PERS board is about to increase what government must pay into the retirement system by decreasing the presumed return rate for PERS investments. Without real reform, lower earnings mean more money must come from government employers. To be accurate, that’s more money from Oregon taxpayers.
The grand bargain considered and defeated by legislators was not just a proposal to raise taxes on higher income citizens and businesses, but included a significant tax hike on older Oregonians with high health care costs. I wonder how many of Oregon’s elderly ill citizens are aware of the tax increase awaiting them if that grand bargain becomes law.
Oregon increased its general fund budget by nearly 14 percent, and further PERS reform would release far more money for public services. Why do we also need higher taxes?
That’s a rhetorical question, of course. One has to wonder if the strategy of tying PERS reform to unreasonable tax increases might be a strategy to avoid fixing PERS at all. And even if the grand bargain is struck, the unions will do everything legally possible to overturn the PERS reforms.
As Kurt Vonnegut so eloquently wrote, “Welcome to the Monkey House.”
Jeb Bladine can be reached at email@example.com or 503-687-1223.