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The rising cost of PERS on education

Two years ago, the Oregon Legislature was consumed with a series of substantive reforms that began the process of reshaping our public education system.

Our work that session was mainly focused on changing the structure of our system to make it more accountable and outcome oriented.

This session, the word “reform” is again being used to address critical needs within public education. The system is telling the Legislature that the most important reforms that are needed are not to policy, but to PERS, the Public Employees Retirement System.

As a school board member in Hood River, I have had firsthand experience with the impact of the escalating cost of PERS upon our district’s budget.

Over the last four years the unfunded liability of the PERS reserve fund has required rate increases that have required us to lay off teachers and close schools. Around the state we have lost thousands of teachers and seen class sizes swell to unacceptable levels. These financial pressures at the local level mean that the hoped for outcomes of the reforms passed in the previous session will be impossible to achieve.

There are two primary proposals in play that attempt to address the escalating cost of PERS. Senate Bill 754 is an attempt by the Oregon School Boards Association to enact the level of PERS reform that they believe is needed in order to address the challenges that exist.

It contains multiple elements that attempt to contain the cost drivers at a sustainable level and reduce the rate the employers (school districts and other public employers) pay on all payroll costs.

Passage of this bill or the enactment of the various elements that it contains would free up hundreds of millions of dollars for school districts to keep in their budgets.

They could use this money to hire back teachers, reduce class sizes and ensure full academic years. It has the support of the entire public education community, major business groups and Oregon counties.

By contrast, Senate Bill 822 was crafted by the co-chairs of the Ways and Means committee. It has become known as “PERS Reform LITE” in the Capitol. The bill is much less serious in its attempt to corral the PERS cost drivers. It also directs the PERS board to “collar” or delay the payment of $350 million that the state owes to PERS because of the unfunded liability. This is similar to choosing to not make your mortgage payment this month. You can do it, but it will cost you more money in the long run.

Because they refuse to consider serious PERS reforms they will need to raise taxes by nearly $300 million to honor the promises they have made.

Unfortunately, Senate Bill 822 is the only PERS bill that has been given a hearing thus far. It was passed out of committee last week on a party line vote and the Democrat leadership is pushing to have the bill brought to the floor for a vote very soon.

If Senate Bill 822 is the only PERS reform that is passed this session, it will mean that the cost drivers to school districts will remain.

It also will mean we will need to impose large tax increases on our fragile economy. Neither will be good for our students in classrooms across the state.

Rep. Mark Johnson, R-District 51, represents Sandy, the Mount Hood Villages, and east Multnomah County, as well as the portion of Clackamas County that border on Estacada.




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