Have the public unions got a tax bill for you

By ALLEN ALLEY

For the Oregon Transformation Project

It’s tax season. With that in mind, I wanted to alert you to a tax you likely don’t realize exists — a tax you are certainly on the hook to pay, but you haven’t seen the bill for it yet.

I can tell you, the bill will be at least $36,000 for each member of your family. You will start paying it now and will be paying it for the next 30 years. The bill is for your portion of our Oregon Public Employee Retirement System liability.

While many of you might have begun work on your taxes on Presidents’ Day 2019, our public school teachers did not. What were they doing? They were having a sit-in at the state Capitol protesting inadequate school funding.

Isn’t it ironic that our teachers, the eighth highest paid in the country, were able to take a day off from one of the country’s shortest school years to protest lack of funding? One would believe we have chronically under-funded this critical service.

The truth is, over the last six years, state funding of public schools has grown 44 percent, while enrollment has grown 3 percent. Funding has increased nearly 15 times faster than the growth in enrollment. Yet we still have one of the worst graduation rates in the nation.

So where has this money gone? It has largely gone to fund the enormous unfunded teacher retirement liability: PERS.

And the saddest part? The teachers don’t understand they are being used as pawns, that even this level of funding hasn’t put a dent in our liability. Their pensions hang in the balance between the financial insolvency of the state and the overburdened taxpayers of Oregon.

Unfortunately, the problem extends far beyond teachers.

Oregon already is the fourth highest in the country for annual state government spending per citizen, at $9,665. Peer states including Washington, Colorado, Utah and California, range from Utah at $4,585 to California at $6,607.

How can we spend more per person than 45 other states and outspend our nearest neighbor, Washington, by 60 percent? Because we have a massive underfunded, government employee pension system.

This unpaid tax is now coming due. So just how big is it?

If we strip away all the government double talk about actuarial calculations and assumed rate of return and actually look at the total cash Oregon taxpayers owe to the current government employees and retirees over the next 30 years, it totals an astounding $225 billion. Put another way, this means every person in Oregon — not only taxpayers, but every adult and child — is on the hook for more than $53,000.

The good news is, the state have some savings that will be used to help pay these pensions — about $17,000 per Oregonian. So, each of you reading this need to come up with only another $36,000 for each member of your family.

With the legislature back in session, there are a bevy of tax increases on the docket. But don’t expect to find a PERS emergency levy. It wouldn’t be very popular for the Democrats to say, “We need to massively raise your taxes to pay off the promises we made to the government employee unions, our largest campaign donors, but never adequately funded.”

No, instead they will raise taxes on corporations, keep the kicker, raise property taxes, tax carbon, raise gasoline taxes, toll freeways and so on and so on. They will never, ever, say it’s to fund PERS, but it is.

Rather than doing the right thing, cutting up the PERS credit card and implementing a 401(k) type pay-as-you-go retirement plan, they will continue the charade of raising taxes on everything to pay off their virtual campaign debt to their largest donors. So, as you fill out your forms and write your checks to the Oregon Department of Revenue, remember to set aside a few thousand extra dollars.

Heck, you could just hold off on funding your own 401(k) for the next 30 years. That should just about take care of it.

Businessman Allen Alley is a former Republican Party chair who has mounted two unsuccessful runs for governor and one for state treasurer.