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Thursday, November 12, 2009

You Can't Beat The House

My head is spinning from the garbage being distributed lately. It seems that the announcement that PERS employer rates are going to rise has triggered a series of non-sequiturs from all directions. Everybody, it seems, has an idea to fix PERS. One thing unites all these ideas - they all involve taking things away from members. No matter what happens, PERS members are always the whipping boys and girls for advocates of smaller (or larger) government. Somehow it always seems as if we are greedy, ungrateful, spoiled brats who just want our PERS benefits and the public be damned. Everyone seems to forget that PERS benefits are not negotiable. They represent the ONLY retirement system available for most members (OUS members aside). The only element of the retirement system that was ever negotiated was the 6% pickup, but few today recall that it was presented to the unions in the form of an ultimatum - it is this or nothing. The unions wanted pay raises at a time when inflation was running at 12-14%. The state, predictibly, couldn't afford raises of that magnitude so Vic Atiyeh and Bob Straub came up with the idea that by paying for the employees' required PERS contribution, that would work out cheaper for the state and better for the employers. So, if you have a choice between the 6% pickup or nothing, you take the 6% pickup. I recall many, many PERS members griping to high heaven about not getting a pay raise. Now the 6% is historically part of the general PERS contract. It isn't going to be given up in negotiations.

So right now we have the Boregonian carping about high employer rates, The Statesman Journal writing about the ripoff of employer side accounts, and The Eugene Register-Guard complaining about the high cost of health care for public employees. Phil Kiesling wants to put everything in the union contracts up for renegotiation with tougher public employer negotiations. Steve Buckstein of the Cascade Policy Institute wants us to believe that if we raise taxes (via Measures 66 and 67) this will (a) all go to pay for the PERS "boondoggle" and (b) will cost the state much-needed jobs.

I can predict right now that politics will make very strange bedfellows during this coming January special election. We will have some peculiar groups of people supporting or opposing Measures 66 and 67. I'm not exited about Measure 66, but think Measure 67 is long overdue (or do I have them backwards?).

Regardless of what I think about these two tax measures, I can assure you that the lever that will be used to defeat them is going to be PERS costs. So, once again, we will be demonized no matter what happens. If the measures pass, people will bitch and moan that all the money is doing is to pay the costs for greedy PERS members. If the measures fail, it will be because of the greedy PERS members. In short, the house will win no matter what. Heads they win, tails they win. We lose no matter what. I don't like those odds.


t.a. said...

first of all, it doesn't matter which is 66 & which is 67; they both need a Yes vote.

second, if "everyone" thinks PERS is ripping off the state and employers, then those benefitting from PERS need to get on the stick and start PRing the shit out of this. you need to sell the arguments of 1) we negotiated this in lieu of pay raises, 2) the state is not being bankrupted by PERS but by a lack of income, 3) we are not rich, we're middle class & this is all we have (we certainly didn't big pay). PERS is a whippee because "they" have gotten hold of the terms of the public discourse -- you got out-framed. not sure how you fix that, but it seems that is necessary. if nothing else, with members of the Leg.

mrfearless47 said...

I'm not sure how we fix the PR problem either. I've gone toe to toe with Phil Kiesling for his idiotic proposal that shows a monstrous level of ignorance on how PERS works and what is negotiable and what isn't negotiable. He literally laughed at me in response. How do you propose to combat that? With friends like Phil Kiesling, who needs enemies. The anger against PERS is misdirected. I don't maintain that PERS is a simple system or that it isn't generous. But the generosity is a product of about 20 legislative sessions of "fixing" a system that wasn't broken in the first place. Now, it is so complex that Chapter 238 and 238a of the Oregon Revised Statutes take up nearly 80 pages and require a mind so complex that few understand, including the Legislature, the Courts, and the PERS System itself. At no time did the public employees ever have any say in how PERS is organized and what the benefit structure is.

The anger at PERS is really directed at the public employee unions and, in particular, the PERS Coalition. They have been PRing the PERS system as hard as they can, but unions are generally unpopular with the masses in Oregon. The teachers' union is despised by taxpayers; SEIU is not much more popular; and AFSCME is, well, AFSCME.

We both agree, I'm sure, that unions are a necessary thing because public employees ordinarily get the shaft in salary negotiations. The only thing we ever got was a decent retirement system and now, because of the economy, retirement systems in the private sector are being drained, eliminated, or reformulated by the hundreds. What we now have is the politics of envy. Because we've suffered comparatively little (though we certainly got shafted in 2003 by the Lege), PERS is the target of envy and abuse. We've got a Gov who is unsupportive of public employees, we've got a Legislature that is hardly sympathetic, the media (in particular the Oregonian, the Statesman Journal, and the Register Guard) that hates public employees and the unions, and we've got an organized opposition that spans the spectrum from libertarians to liberal democrats. How do you fix that set of problems? PR isn't going to do it. If that were the case, we'd have won the battle by now.

As for Measure 66 and 67, I strongly support the corporate minimum change, but am ambivalent about the increase in the personal income tax. I would be more supportive if it hadn't been so sneakily retroactive. It is one thing to propose a tax increase you can anticipate via withholding; it is another thing altogether when they get you after the fact. That's why my support for the personal income tax measure is wavering.

BHerbert said...

You did a great job trying to answer the off-the-wall arguments on Jack Bog's blog. Unfortunately, most of those people have no idea what's happened in the past, nor do they care. They just want to vent. You kept using those pesky FACTS in your answers, and it seemed to anger them even more.

I remember back in the 1980s when we were presented with PERS benefit increases as an option to pay raises, one of the arguments was, "if PERS investments do well, consider how much better your retirement benefits will be."

People in the private sector told me several times what a terrible deal that was for us and how we got hosed. Those are the same people who are now livid because the benefits at least provide a living income.

Givebacks are pointless. Once you start down that road, there's no end. If all PERS retirees' pensions were cut to $1.79 a month, it would be $1.78 too much for many of the complainers and they'd still fight for more reductions.

The Legislature won't be able to change the system to our detriment unilaterally because of contract law--as we've already seen several times. The system isn't bankrupt or anywhere close, nor will it ever be.

What we need to think about isn't "how do we cut PERS benefits," it's "how do we make retirement benefits better for others in the private sector." There could be a sort of modified PERS (a "PrivateERS") using the principles of aggregating funds so as to have more pull when investing, allowing portability, and sharing contributions between employers and employees--with an employer pickup left to negotiations

TruthSeeker said...

BHerbert makes allot of sense.

mrfearless47 said...

I agree with the sentiment that instead of trying to pull down PERS retiree or member benefits, we ought to work towards getting better benefits for all. Unfortunately, this isn't going to happen anytime soon because the libertarians are already playing in the health care arena and are trying to prevent any sort of meaningful health care reform. If we can't get health care reform through and provide better or some care for 46 million people who don't have any, why would you expect any sort of movement that would improve retirement benefits for the private sector. Egads! Socialism! Run for the hills. (just kidding of course). But this is the logic that seems to dominate discourse on any of these subjects. We have the politics of envy at work here.