Getting serious about PERS

There was a promising sign last week out of Salem as the Legislature settled down to work: Lawmakers appear to be serious this session about trying to find money-saving options to the state's troubled public-pension system.

PERS issues grabbed the spotlight as the Senate Workforce Committee met on Wednesday, the official first day of the 2017 session. And the committee's chair, Portland Democrat Kathleen Taylor, made it clear that the committee would entertain any PERS proposal from legislators.

"All bills will be treated equally," Taylor was quoted as saying in a story in The Oregonian, "and all will be brought out into the public light so everyone can see what we're grappling with."

In fact, Taylor and her Republican co-chair, Sen. Tim Knopp of Bend, have invited legislators to submit any of their own PERS proposals by the end of the month. In a memo they issued last week, they even listed the nine criteria they would use to evaluate the proposals: They include items such as constitutionality, cost savings, impact on employer contribution rates, the impact on the public workforce, and so on.

The idea is that the committee's staff will evaluate each proposal and prepare a summary.

For his part, as we've noted in previous editorials, Knopp already has filed a pair of PERS bills, Senate Bill 559 and 560. One of the bills would change the calculation of members' final average salaries used in benefit calculations to an average of five years instead of three. The other would redirect employees' 6 percent retirement contributions, which now go into supplemental retirement accounts owned by the employee, to pay for their pensions.

The committee also heard the first of two scheduled presentations by Steve Rodeman, the executive director of the Public Employees Retirement System, that served notice that substantial PERS reform won't be an easy task.

Rodeman emphasized that the 2015 Supreme Court decision that invalidated most of the PERS reforms approved by the Legislature in 2014 made it clear that benefits can only be changed going forward. And, he noted, any changes the Legislature makes to PERS in this session are certain to be challenged in court.

All that, obviously, increases the degree of difficulty legislators face in coming up with meaningful PERS reform. And, as we have noted before, it's becoming increasingly clear that there likely is no magic bullet solution — one answer to all of our PERS issues.

Still, it was gratifying to see the committee take up the PERS issue on the session's first day, especially in light of the Legislature's general reluctance to tackle the topic at all in its last couple of sessions. Proposals to reform the system didn't get much traction at all in the 2015 and 2016 sessions, as the PERS deficit ballooned to $22 billion and state and local governments dealt with the prospect of steep rate increases that will take a bigger and bigger bite out of their budgets. Legislative leaders seemed to think that they had taken their best PERS shot, and it had been rejected by the Supreme Court, so there was really nothing they could do.

Of course, it still could be that these new legislative efforts, promising as they seem today, still could come to naught: These sessions are long and twisty affairs, and we still don't sense much enthusiasm among Democratic legislative leaders to tackle PERS reform. But the Senate Workforce Committee appears to be off to a good start, and the committee's efforts could well be one key to a successful session.

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