Broken PERS system threatens state's fiscal health

As a retired teacher (albeit from our neighboring state to the south), I understand too well the sacrifices teachers make, and why they and many more Oregon public employees are intent on defending the state's Public Employees Retirement System.

But PERS is so flawed and arbitrary that it demands fixing. If we sit by idly or lack the courage to institute real reforms, our PERS debt is piling up so quickly that it threatens to cripple the state's budget, now and for future generations.

Nowhere is this more apparent than in our public school system. This year, Gov. Kitzhaber and leaders of both political parties have agreed that we need to begin reinvesting in a K-12 system that has seen its share of state funding erode from nearly 45 percent in 2003 to about 39 percent today.

Under a proposal by the Ways and Means co-chairs, the state would spend $1 billion more on education in 2013-15 than was budgeted in the current biennium. Normally that kind of news would have educators jubilant, and in fact there is a sense of relief in many districts that will not be forced to make cuts for the first time in years.

Tempering that relief, however, is the knowledge that across the state, school districts will see PERS costs rise by $200 million next year unless reforms are enacted. That means that 1 in every 5 new dollars that could be spent on restoring teaching staff or school days will instead be paid to PERS.

Locally, PERS rates for Medford schools rose 35 percent going into the 2011-13 biennium. The district cut 70 full-time positions and reduced employee wages to absorb those and other benefit increases. I'm a director on the Medford School Board, and we expect to spend 25 percent more on PERS rates, or $6.7 million, over the 2013-15 biennium unless tangible reforms are enacted.

The latest increase is the equivalent of 20 classroom days over the two years, or 90 teaching positions. If we could hire those teachers instead of spending the money on PERS, we expect we could reduce class sizes by five to six students per classroom.

We're far from alone. In Ashland, schools are facing similar percentage increases in PERS costs. Just four years ago, Ashland schools spent 10 percent of their general fund budget on PERS. Without reforms, that figure is projected to rise to 15 percent in 2014-15.

A number of PERS reform proposals are on the table. The most recent one, Senate Bill 822, is being hailed by Democratic leaders as the answer to our PERS problems. As a fiscally conservative Democrat, I'm disappointed in this effort.

Why? Roughly $350 million of the projected savings in SB 822 stem from simply delaying payments on our PERS debts for 2013-15. This "kicking the can" is not sound public policy — it is a political expedient that saddles our children with our PERS debts. A "breather" helps, but only in the short run, and in no way resolves the underlying issues.

As parents and stewards of Oregon's future, we need to set aside political labels and work together in a meaningful way to help stabilize the state's economic future. Across the state, business organizations, school boards and youth advocates have formed a coalition seeking a long-term PERS solution.

You can join them, and me, at Together we can end a cycle of teacher layoffs, shorter school years and reduced public services. Together we can fix PERS now.

Ron Andersen is a member of the Medford School Board. He taught high school economics, government and social studies for 35 years in Elk Grove and Palo Alto, Calif., before retiring in 1998.

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