PERS and pachinko

The Legislature's scattershot approach to reform has accomplished very little

Following PERS reform in the Oregon Legislature is like watching a game of pachinko. That's the Japanese version of pinball, where dozens of small balls are fired through a forest of brass pins in the hope that one or two will eventually fall into a pocket, redeemable for a prize.

There's a randomness to the game that is mesmerizing. Much like the politics we're seeing played in Salem.

At the start of the current legislative session, close to 40 bills were introduced to reform the state's Public Employees Retirement System. Some aimed high, seeking to fundamentally reform a program that is draining revenue needed for our schools and local governments. Others were merely stopgap measures designed to help balance the state budget and protect our elected officials from the wrath of the public employee unions.

The one bill that passed the Legislature and made it to Gov. Kitzhaber's pocket for his signature is a prize not worth redeeming. Senate Bill 822 saves little, reforms less and borrows from the future.

The governor now seems to realize this. How else to explain the latest ball he's fired into the PERS pachinko?

After failing to get his PERS reform ideas considered by legislative leaders from his own party, Gov. Kitzhaber literally left the country rather than work with legislators to craft real PERS reform in the remaining weeks of the session. Now the governor is quietly negotiating with union leaders on a side deal.

As The Oregonian recently revealed, the governor is proposing that schools and municipalities would stop contributing 6 percent to each employee's PERS fund in exchange for a 6 percent raise for those employees.

Yes, you read that correctly. Public employees would get a lavish raise — money that they would then deposit into their own retirement fund. Only in state government would this sleight of hand be considered a serious proposal.

According to the Portland daily, several union leaders are open to the concept. No surprise there. It's a win-win for state employees. As the newspaper reported, an "urgent bargaining update" was sent to members of the Service Employees International Union, one of the larger representatives of state workers:

"The concept put forward is that the employer would no longer deposit 6 percent of our pay into our individual PERS IAP (individual account program) accounts. Rather, the 6 percent would be added directly to our base pay, then deducted pre-tax ... and deposited into our PERS IAP account."

The Oregonian reported that "the memo goes on to say that the union would reject the proposal if it doesn't represent a 'true buyout.' It would have to cover all costs associated with the contributions, and it could not preclude other economic offers, such as cost-of-living raises, salary step increases, health care costs and furlough days."

When you play pachinko, you play with your own money. In state government, the game is much easier: You play with other people's money.

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