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Monday, April 18, 2011

Chump Change

As things are going right now, the only negative PERS bill to gain any traction in this legislative session is the ill-advised HB 2456 (see below for several posts and a lot of comments about this bill).  The bill is now up to a dash 7 revision.  As modified, it will now affect any PERS member eligible for the income tax subsidy who retires after 12/31/2011.  If you don't live outside Oregon and don't plan to live outside Oregon once you retire, the bill has no impact.  But if you live outside Oregon and plan to stay outside Oregon, the bill could cost you anywhere from about 1-3% of your final gross pension benefit.  Members eligible for the income tax subsidy have worked some or possibly all of their eligible time prior to October, 1991.  There is, of course, one more dire possibility for certain inactives.  If you worked for a PERS employer only prior to October 1991, then you will lose 9.89% of your gross benefit.  Few fit this profile, so it probably isn't worth worrying about.

The revisions involve notification to potentially affected members, as well as a mechanism to switch the subsidy back on if a retiree moves back to Oregon, and off if an Oregon resident leaves Oregon for domicile elsewhere.

This bill, which has generated a tremendous amount of hostility, misinformation, and ill-will (see again my commentary in the posts below), has been scheduled for another work session and probable referral to the House Ways and Means Committee on Wednesday.  The sad thing here is that this pissant bill will probably save the state pennies, not real money.  The Legislative Fiscal Office will have it's financial impact statement on Wednesday, when we will probably discover that the bill will net the state all of about $10 million (if even that) over the biennium  This is truly chump change, given the amount of work involved in enforcing it.  Add more to the PERS and Revenue workloads with no money to pay for the decreased efficiency of both agencies that results.  Pathetic!

7 comments:

Harvey said...

Welcome back Professor. Hope Florida gave you some sunny relief from the ongoing rain here in the Beaver State. Thanks for the update. Two questions. First, as a current PERS retiree, having worked solely for a PERS state employer prior to October 1991(employemt began 12/1971), is there a hidden "gotcha" in the bill for me and similarily situated retirees? Or is it just for those who are "inactive" and havent retired as yet? Second, Will the Legs committe members get a "net" estimate on what really will be garnered from "savings" from the bills enactment when all the PERS,Dept of Revenue administrative/enforcement mechanisms are calculated into the mix? Seems OPRI and the PERS Coalition should be hammering home the miniscule cost/benefit of this bill.

mrfearless47 said...

As a current retiree, you have nothing to worry about. The bill, as proposed has no hidden "gotchas" that I've been able to find. I haven't seen the dash-7 amendments, but nothing I've heard from anyone says that this bill will have any impact on anyone already retired. It is only for those active and inactive members (not retirees!) who retire after 12/31/11. Hope this helps. As for the "net" estimate, I truly doubt that we'll ever see that published. Just like Measure 66 and 67, the estimates of revenues generated were wildly inaccurate when real information started coming in. Expect no less this time around. As for the cost/benefit of this bill, it seems as if it doesn't matter to anyone. It appears that all anyone wants to do is to "ding" some group of PERS retirees for something that can't be litigated. PERS Coalition and OPRI seem not to be interested in making this point, as it may be futile.

MollyNCharlie said...

The emergency clause in the -7 amendment looks to me like it applies mostly to the 60 day period allowed for direct appeal to the Oregon Supreme Court. This gives an extremely short time to to make the expedited appeal. Particularly hard on those targeted by this measure.

peg

Harvey said...

I appreciate the analysis and assurance,pending final draft and god knows any amendments should it get to the floor for a vote. I would hope in any case that our Cowboy Gov. veto the sob if it gets to his desk. That's the least he could do given the support he got from labor. Meanwhile I will still be tracking this and again writing to my Rep and Senator.

mrfearless47 said...

The dash 7 amendments are now posted on the oregonpers.info website under Legislation. It is the top item. You want to read it to reassure yourself that it either does or does not apply to you. I can tell you, but you'd be better off establishing this for yourself. This is likely the version referred to the Joint Ways and Means Committee.

Andrew said...

The fiscal impact statement has been out since 4/22: http://www.leg.state.or.us/comm/sms/fis11/fhb2456a04-22-2011.pdf mrfearless:I would appreciate your illuminating the numbers. The impact statement says that the bill would reduce benefits by only $225,000 over the 2011-13 biennium - which not only is chump change, but represents a net loss given the over $400,000 start up costs. I don't see any long term projections. Is this there more fiscal impact information that is forthcoming, or is this all that Ways and Means has to go on?

mrfearless47 said...

@Andrew. There isno other fiscal information ways and means gets. The bill is a NY et loser in the first biennium, and probably will net very little positive gain in subsequent years. This bill has become a symbolic bit of desperation for the legislature. The threat of litigation that will turn in favor of members and retirees is so strong that there appears to be little that can be done to Pers members/retirees.