The House Business and Labor Committee today suspended its rules and passed out HB 2456 unanimously and sent it on to the Ways and Means Committee with a "do pass" recommendation. The suspension of rules took place because the Legislative Fiscal Office still did not have the "fiscal impact statement" done for this bill. It doesn't take a genius to figure out why the LFO hasn't got the analysis. The simple fact is that HB 2456-7 saves virtually no money after all the costs of enforcement and collection are factored in. The House Business and Labor Committee spent a fair amount of time to get the bill into its current form and effectively wasted more valuable time on a bill that, in the end, saves the state almost no money - probably barely enough to print the changes to the Oregon Revised Statutes. It affects future retires eligible for the tax subsidy (only those with service time before October 1991) who do not live in Oregon and pay Oregon Income taxes. It is hard to estimate how many will move out of state, especially with this looming over their heads, and the mechanisms set up to enforce the bill are cumbersome at best. All I can say is that I hope that Ways and Means sees the stupidity of this bill and decides that it isn't worth the paper it is printed on. And they say that "idle minds are a terrible thing to waste". This proves the wisdom of that axiom.
12 comments:
One bright side to this. Think of the damage they could have done this session. If this all there is, they've actually shown some restraint and good judgment.
This at least gives them a chance to show that "something" was done to fix a PERS "mess" that doesn't really exist.
I left ohsu in 89-90 and was vested at the time. i currently live and work in Oregon and was not planning on retiring for several more years, despite being eligible. i may have to leave the state for future employment; should i be seriously considering applying for my state retirement before the end of the year?
I left ohsu in 89-90 and was vested at the time. i currently live and work in Oregon and was not planning on retiring for several more years, despite being eligible. i may have to leave the state for future employment; should i be seriously considering applying for my state retirement before the end of the year?
@ed. It sounds like 100% of your service is before October 1991. If so, you are risking 9.89% of future benefits by NOT retiring. You can wait to retire by 12/1/11, but if you wait any longer and retire AND move, your benefit will be subject to the potential of a 9.89% cut for the period you live out of Oregon. Personally, if I were old enough, it would take a couple of extra years of earning to offset the loss of 9.89% in annual benefits.
The Salem Statesman journal reporter Dennis Thompson has just "discovered" this fact. I cannot believe how many reporters write up a story without doing the necessary background research. I've been pointing out the emptiness of this bill since the revision happened about 2 weeks ago. The "savings" will be nominal and could possibly go negative when the workload of PERS and Revenue go up. Talk about a low yield, high cost bill wasting taxpayers' money. But, yes, the Legislature can announce that they "did" something about PERS. Now if only they would do something about the Big Banks and Investment firms.
Please help me with my understanding of potential impacts of moving out of state after retirement.
I am a current state employee, started in 1978. So lets figure 13 years before 1991.
So would the calculation be:
(13 yrs/ N yrs under PERS) x .o989 = potential loss if living out of state?
@Bob. That's the approximate calculation. Just keep in mind that they calculate your benefit first and THEN they add the adjustment. You will never lose your original calculated benefit, only the subsidy they would add on to the benefit for paying Oregon Income tax on the portion of your pension earned prior to October 1991. Hope this helps.
MrFL - thanks for the info on the potential impact of HB 2456. Looks like about a possible 3% hit in my case, should I move out of state. Good to have some info for planning. Thanks!
Mr FL - That's helps a lot in my understanding of a potential impact from HB2456. Thanks!
Thanks for posting the information on the actual calculation of the impact. I started in April of 1983 so by my calculations I would see an impact of about 2.9%.
Is that correct? I also understand that this -.2.9% would be applied to the adjustment over and above my calculation and not to my actual calculation. Is that correct as well?
Does the bill allow credit for the income taxes I currently pay to the state I live in? I also still own property in Oregon and pay annual income taxes. Any credit for that?
@misterchuck. No credit for other income taxes paid outside Oregon. I'm a bit confused by your last sentence. I understand you still own property in Oregon, but wouldn't you be paying property tax, not income tax on the property (unless it is rental property). If the latter is the case, then you must be filing an Oregon Income Tax return in addition to whatever other return you file. Your status will be determined by whether the Department of Revenue considers you an in-state or out-of-state resident for income tax purposes.
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