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Saturday, May 28, 2011

Crickets chirping on the PERS front

Public employee pensions are bankrupting state and local government in Oregon, as they are in many places. Are our legislators doing anything about it? Apparently not, which is a crying shame.

Why do they need to meet every year, to do more nothing?

Comments (16)

Be happy - I think we have a plastic abg solution, but best of all we now have an official state dirt (no Sam Adams jokes).

God, what a bunch of chimps. They just keep sticking their heads in the sand hoping, don't they?

Ok now that you have heard the O's take on it, I can tell you the truth. In February after all the bills affecting PERS were tossed into the hopper the House Committee asked their legal counsel to take a look at them. The response was that most of them had already been ruled illegal by the Courts, some more couldn't be dictated by the legislature but had to be negotiated with the Unions (court rulings again), and the last bill standing,the tax true up, might be legal or it might not.

The Unions said they would accept a tax true up that exempted already retired workers and that bill has gone forward with a unanimous "do pass" recommendation by the House Committee and is expected to pass the legislature.

I know people hate to pay for Pers but the 2006 legislature pretty much mined out all the doable fixes.

State bankruptcy is going to be interesting.

Jack. PERS is in far better shape than the pundits from the local media and the portlAnd idiot club make it out to be. Furthermore, As legislators discovered in 2003, the bankruptcy provisions of the state would put PERS at the front of the line. Like it or not, the state baked this disaster and those of us Who sacrificed salary in exchange for a comfortable retirement don't feel even slIghtly embarrassed that our benefits in retiRement are as good as they are, but nowhere near what the public thinks.

At least we heard from the martyr faction...

The comment probably took so long to be posted 'cause the MF was busy boiling gruel for dinner.


The article notes that the only way to get substantive relief for the fund is to take away benefits from those already retired. The Oregon Supreme Court ruled against that in the past, and the Dems in charge at that time didn't take the next logical step - which would have been an appeal to the Federal Courts. Seems like that's where it will end up one of these days. The current legislature is just kicking the can down the road.

Congress can change all of this. When enough states hit the can, something could very well happen at the federal level.

It's hard to see how Oregon will keep all its pension promises and still provide essential services. The public isn't going to shut down the state police to pay handsome benefits to some retiree from some marginal quasi-state agency, is it? Something will have to give.

One last set of numbers for your consideration. According to my calculations the State of Oregon will pay about $179 million dollars into for FY 2012 PERS or 10.8% of payroll. One source I read said the Oregon budget for FY 2012 will be about $30 billion dollars.

So look $179 million is a lot of money but it's still less than 1% of the overall State Budget. (.006 to be more exact) (Hey if my math is wrong pillory me.)

So is this the new reality for substantive long-term commitments? The contractual promises that we used to take seriously are without substance?

It began decades ago with slippage at the personal and institutional levek. Take corporate pension funds - raided by various factions to fund takeovers or converted to something much less than the long-time workers had been promised. Or swallowed up in a corporate implosion like Enron or Arthur Anderson.

Then a lot of folks stopped taking mortgages seriously. A generation or two ago the mortgage was something carefully considered, budgeted, underwritten, and paid first because it was both a piece of the dream and because it was a significant promise to pay. But somewhere along the line, it became OK to just make stuff up to get a mortgage, payment schemes were created that were incapable of actually baying off the loan, houses became ATMs, and when the scheme didn't work out (e.g., the 100% loan was underwater) it was somehow OK to walk away leaving someone else to hold the bag.

Are we headed to a place where we as a society treat our contractual obligations with the same level of seriousness as the serial house flipper treats his mortgage? I seriously hope not.

Serious question: how precisely could Congress change all this without running afoul of the Constituonal prohibition on impairment of contracts? Won't congressional action to rewrite contracts retroactively be struck down for the same reason that Oregon's attempts failed?

Of course Scalia and the gang have no problem whacking workers, but once government is allowed to rewrite contracts that prove onerous, don't the big boys with all the money have a lot more to lose than the already eviscerated working class?

"Jack. PERS is in far better shape than the pundits from the local media and the portlAnd idiot club make it out to be."

This answer assumes the question: "Is my cargo safe during my retirement?" It is all about "Me, My, Mine,..." Yes, PERS is better than other states, but it still has a huge "Unfunded Liability".

But Jack's question was not "How much can YOU keep of you ill-gotten-gains?" but rather:

"Public employee pensions are bankrupting state and local government in Oregon, as they are in many places. Are our legislators doing anything about it?"

The first sentence is a statement that is rather undeniable, apologists notwithstanding. The answer to the 2nd is "not much".

At the present "do-nothing" course, PERS and healthcare benefits will soon gobble up more than 20%++ of budgets for school districts and munis. So, in order to keep paying for teachers already retired (and living out of state with over 100% of their last year's paystub), the current teachers will be the one's left holding the bag. They will enjoy reduced benefits (still great, but compared to the Tier1 crowd much less lavish), larger class sizes (over 40/class), and the deserved wrath from the abused taxpayers.

This sad situation and the "I've got mine" attitudes of the older retired and soon-to-be-retired teachers, almost makes a person sympathetic towards the left-behind teachers holding the bag.

"PERS is in far better shape than the pundits from the local media and the portlAnd idiot club make it out to be."

OK, Mr Fearless, what it the current unfunded liability? I thought it was somewhere around $13B.

So when you say far better than most people think, let me know. Last I read we lose another $1B in state reveneue for PERS contributions that could've gone to schoolroom training (and not just the teachers).

You can't think this is the last bump in contributions. You can't also think sticking their heads in the sand and hoping is a fix either.

BTW - "the 2006 legislature pretty much mined out all the doable fixes." Not to mention all the phone calls from the public unions to any legislator who even dared think of any change to PERS.

I have no problem with an annual meeting of the Legislature, but why do we need two houses of the State Capitol - 30 and 60 seats, each?

I say: why not follow Nebraska's unicameral Legislature approach and have just a single House of Representatives - with, say, 50 or 100 delegates? 50 would be a nice compromise between the House and the Senate; 100 could actually increase the total size by just 10 but each of those 100 delegates would only represent 38,400 citizens each. Thus - Portland would only get 15 seats out of 100; the tri-county area would only get 43 seats.

"I have no problem with an annual meeting"

I have BIG problem, what the h*** have these legislators (and gov) done of any substance in the past six months?

You make them full time we'll have nothing but plastic bag and state dirt bills, they won't do anything about PERS lest it upset their public union overlords and apparently they don't have a clue about anything they can cut in the budget - Plus it will cost us more.

The best, cleanest, easiest thing the legislature could do now is something their predecessors never did: think 20-30 years into the future and plan accordingly. The debate over existing or near-term retiree benefits should continue, but any changes will be litigated. Some may survive, many will fail. But it's a slam-dunk to create a retirement/pension system for new hires that our kids will be able to afford. Even the union bosses, who care much more about their own benefits than those of as-yet-unhired future workers, may go along with a change.

First step in reform is to take all politicians OFF of PERS.
They are merely temporary employees and shouldn't be eligible for a pension..

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