Governor Retread singing "My Way" on pensions
There's actually noise coming out of Salem about public employee pension reform these days, but we think it's probably sound and fury signifying nothing. First, the new speaker of the House, who doesn't like us and the feeling is mutual, is already dog-whistling that she's not really on board:
New House Speaker Tina Kotek says PERS reform will "get serious consideration. But the majority of conversations we were having when talking to voters on doorsteps were about schools and jobs. That's what we need to focus on."Kotek repeats what unions have been saying: Any reforms need to be fair, legal and generate immediate cost savings. But she offers no specifics.
Meanwhile, the Boyfriend-in-Chief sounds like his commitment is pretty conditional as well:
"If this gets ugly, if people try to make this into something about public employee bashing, I'm gone," Kitzhaber said. "I'm not going to do it."
So expect nothing to get done this biennium, with everyone in the Democratic Party blaming someone else for it.
Meanwhile, here's a wonky paper from some pension actuaries who dig into the question of how quickly pensions will eat up the budget for essential government services. And here's a table they prepared, showing Oregon as second worst in the nation in terms of what it's going to take per household for retired government bureaucrats. It's a grim scene.
| Posted at 4:28 PM | Permalink |
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Comments (13)
Good find, Jack.
Now maybe some actuary can do that chart again and use interest rates from 1978-1981 like we had at the end of the Carter administration.
Just imagine if the cost for borrowing went back to say, 15-18% or so... as I expect it to do in the not too distant future.
Posted by ltjd | November 18, 2012 5:15 PM
"New House Speaker Tina Kotek says PERS reform will "get serious consideration. But the majority of conversations we were having when talking to voters on doorsteps were about schools and jobs."
Madame Speaker does not think there is a connection between PERS and schools??
Posted by pdxjim | November 18, 2012 5:17 PM
Thanks, Jack - that's a wonderful paper.
So, for PERS to be fully funded thirty years from now, Oregon would have to increase its contribution by $3.1 billion a year, or another 36.1% of government payrolls.
An earlier version of this paper was noted in an Oregonian article on June 18th :
"A 2011 study by economists at the University of Rochester and Northwestern's Kellogg School of Management compared pension funding needs under very conservative investment assumptions. It concluded Oregon needed to triple its current contributions, from $1.3 billion to $4.4 billion per year, to dig out of its actuarial hole. Measured as a percentage of state tax revenue, that would give it the highest pension burden among the 50 states in the study."
It's amazing how bad things look, once you eliminate the 8% magical rate of return.
Tripling the current PERS contribution - imagine what that will do to the State...
Posted by Random | November 18, 2012 5:28 PM
So when Kotek says it has to be "fair", I assume that she doesn't care about anyone or anything except for the union members?
Dems are just whores for the unions. Kotek and the rest would rather have the State go bankrupt than do anything to upset their union bosses.
Posted by Andy | November 18, 2012 5:33 PM
Before we get ahead of ourselves, help me out.
When I criticize the policies of The Hon Speaker Tina, am I a homophobe or a lesbianphobe? And re the latter, is there such a thing? And finally because she is a she, I'd be a sexist also, yes?
Posted by Harry | November 18, 2012 5:41 PM
So what's a better escape hatch? Idaho or Nevada?
Posted by Snards | November 18, 2012 5:44 PM
An eye-opener, among many, from "The Revenue Demands of Public Employee Pension Promises" paper:
Oregon has the lowest "actual contributions" by employees, by an order of magnitude, at 0.1%. I am not going to take the time to calculate a mean percentage of employee contribution, but I am seeing a lot of 7-point-somethings there nationwide, with contributions as high as 11% in Massachussetts.
And as simple as that, we have found one path to public employee pension reform in Whoregon.
Posted by gen. Ambrose Burnside, Ret. | November 18, 2012 5:54 PM
" Kotek and the rest would rather have the State go bankrupt than do anything to upset their union bosses."
The new term for that is to Twinkie it.
Posted by sally | November 18, 2012 7:56 PM
Both? Nevada, or certain areas of it, had a little bit more of a bubble.
Posted by Andrew | November 18, 2012 8:27 PM
The Unions paid for their legislators and they intend to use them...
Posted by tankfixer | November 18, 2012 9:02 PM
Harry - It's all just sexism if you are discriminating based on behavior that does no conform to traditional gender roles.
So a man/gay/lesbian/woman that is not doing what you think a 'normal' of that gender should be doing, and you make judgments based on that, then that's sexist.
Took me forever to figure that out...hope it helped. :-)
Snards - Idaho. It's nice. Nevada is okay but not Vegas.
Sally - I prefer the term SnoBall it. :)
Posted by JO | November 19, 2012 3:58 AM
Snards: The weather is better here in Nevada, and we;re getting a bunch of new businesses now leaving California. Oh - and you'll save a bunch on both property and income taxes as well.
Posted by Dave A. | November 19, 2012 6:38 AM
Why not declare PERS bankrupt?
Posted by Mike (one of infinity) | November 19, 2012 8:49 AM