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Rep. Brian Clem, D-Salem, speaks on House floor in March 2014.
(Chad Garland/Associated Press)
Oregon has a public-pension problem. You may have heard about it. The system that provides for the retirement of public employees in Oregon has an unfunded liability so large - north of $20 billion - that employers, from school districts to state agencies, may soon be contributing about 30 percent of payroll to keep it afloat.
And things could get even worse.
As returns on the state's retirement-fund investments stagnate, the funding burden on government agencies increases. The stock market hasn't been doing so well lately, leading one expert to warn that employer contributions could eventually hit 40 percent of payroll, as reported by Ted Sickinger of The Oregonian/OregonLive.
"The December 31, 2015 returns should be keeping people awake at night," warned that expert, John Tapogna, president of economic consulting firm ECONorthwest.
"Whew," you might be tempted to say. "It's a good thing the Legislature is in session. Aren't urgent problems like this exactly why voters approved even-year short sessions back in 2010?"
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"Fortunately," you might be tempted to continue. "Sen. Tim Knopp has sponsored a bill this session that could blunt the impact of the Public Employees Retirement System on employers."
You'd be right on both counts. Short sessions are supposed to be used to address emerging crises. And Knopp, a Republican from Bend, has introduced just such a bill, Sickinger reported. It includes a number of potentially controversial changes, including a redirection of contributions made to supplemental accounts into the PERS fund.
But the bill is dead, a fate Knopp has attributed, with good reason, to a reluctance by majority Democrats to tick off public employee unions with an election right around the corner. Some emergencies, you see, are simply more urgent than others.
What about Oregonians whose children could face packed classrooms as a result of the PERS crisis and the reluctance of lawmakers to address it? Not to worry! Knopp's reform effort may have gone nowhere this session, but lawmakers are still hard at work on the troubled pension system. Some of them, you see, are busy trying to make its funding problems even worse.
On Wednesday morning, the House Business and Labor Committee voted to support a bill that would reclassify employees of the Oregon State Hospital as police officers for pension purposes. That means they'd be eligible to retire about five years earlier than they would otherwise and collect larger PERS checks. Ka-ching!
Why is this necessary? Because, argued employee union representatives earlier this month, working with violent patients at the state's psychiatric hospital can be both dangerous and stressful, especially for people who spend a lot of time in close contact with them. No doubt, this is true, though supporters of House Bill 4011 - including its chief backer, Rep. Brian Clem, D-Salem - have relied entirely on anecdotal evidence. Even Clem - the bill's legislative champion - had no idea during testimony this month how many employees would be affected. He was equally ready to believe that the number was 23 or - closer to the actual number - 2,300.
What supporters of HB4011 described is a workplace safety problem that affects some hospital employees much more than others. This is a point Republican members of the Business and Labor Committee made during Wednesday morning's work session, noting that early and more lucrative retirement for huge numbers of employees is a strange solution to a workplace safety problem.
And besides, noted Rep. Greg Barreto, R-Pendleton, when you have an unfunded pension liability of $20 billion-plus, it doesn't make much sense to add to it. The concerns of Barreto and similarly reluctant colleagues would have been persuasive if the intent of the bill's supporters were to fix a problem. This bill's legislative journey to date, however, suggests that the intent of supporters is to use safety only as a pretext to hand thousands of public employees - those who work for the hospital now and in the future - a retirement perk for which the state is ill-equipped to pay. Such is the failure of this legislative session that HB4011 is still alive.
Voting in support of the bill Wednesday were: Rep. Brent Barton, D-Oregon City; Rep. Margaret Doherty, D-Tigard; Rep. Paul Evans, D-Monmouth; Rep. Shemia Fagan, D-Clackamas; Rep. Paul Holvey, D-Eugene and Rep. Rob Nosse, D-Portland.
Voting in opposition were: Barreto; Rep. Sal Esquivel, R-Medford; Rep. Dallas Heard, R-Roseburg and Rep. Bill Kennemer, R-Oregon City.
We're tempted to believe that this bill will gather dust in the Ways and Means Committee, to which it has been referred. But it would be naive - especially during this session - to assume anything.