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Bill could save schools PERS costs

Jackson County schools would avoid almost &

36;6 million in benefit hikes to the Public Employees Retirement System during the next two years under a legislative bill proposed this week.

This is the second piece of legislation this year that attacks the &

36;15.8 billion long-term debt problem of PERS, which has contributed to increased costs for schools, counties and other government agencies.

We're whacking this problem down as best as we can do, said House Majority Whip Rob Patridge, R-Medford.

The governor last week signed a bill that caps PERS benefits at 8 percent, whittling &

36;1 billion out of the retirement system debt.

If the new legislation is enacted, mortality tables created in 1978 that calculate how long retirees are going to live would be updated to reflect lifespans that are now four years longer, carving another &

36;1.5 billion out of the PERS problem.

The estimated benefit in the 2003-05 biennial budget to government agencies would be &

36;283 million, of which schools statewide would avoid &

36;110 million in anticipated hikes.

Schools paid 12.73 percent of eligible salaries to PERS this year, but expected the contribution would jump to 18.58 percent this July. The two legislative initiatives together would knock that down to 14.68 percent.

Despite these bills, schools would still have increased costs next year and wouldn't experience any actual savings.

We probably won't be able to bring them down to current levels, said Republican Rep. Dennis Richardson of Central Point, a member of the House PERS Committee.

Richardson said this is just another step in a long process to deal with PERS.

We're not done yet, he said. We want to bring it down to something that is predictable and reasonable.

He said the new mortality tables, which would have to be updated every two years under the new plan, would result in decreased benefits to government employees who retire after June 30, but not affect existing retirees.

It's a huge step, said Patridge. It sends a signal to the public employees that we sent something out that's not retroactive, and it will also give public employees a smooth glide path rather than live under uncertainty.

With so much in potential savings to schools, Patridge said it's too bad something wasn't done sooner to rein in PERS.

I tried to address it, he said. The Democrats took it off the table. The governor (John Kitzhaber) didn't want to deal with it.

Even though this latest legislation attempts to protect existing retirees' benefits, Patridge anticipates that it will likely trigger lawsuits.

Vicki Robinson, business director at Central Point schools, welcomed the news, but questioned the figures presented by the Legislature showing a two-year savings to her district of &


That's good news, she said. But, we're not sure what the news is.

Robinson said the calculations made by the Legislature are based on enrollment figures, not on actual district salaries, making her question the cost estimate.

However, she still expects her PERS payments, which amounted to &

36;3.1 million last year, will increase over current levels despite these legislative efforts.

It's just going to mean we have less of a liability, not that we have any savings, she said.

She also worries about lawsuits that might temporarily nullify the legislation.

It's wonderful if the law takes effect, but if it goes into litigation and we have to keep paying 18.58 percent, it won't help us now, said Robinson.

Despite her reservations, she said, Anything we can do to reform PERS is a good thing.

Reach reporter Damian Mann at 776-4476, or e-mail Estimated savings The Legislature anticipates school districts in Oregon would avoid &

36;110 million in added PERS contributions under House Bill 2004. The following reflects preliminary estimates for Jackson County districts based on the number of students enrolled.



Butte Falls&


Central Point&


Eagle Point&










Rogue River&


Total &


' source: Legislative Fiscal Office