The week has passed with no additional news on the fate of PERS in the Legislature. Two days of "high level" discussions at the Governor's mansion with leaders of both parties produced nothing of substance, and have managed to leave PERS members and all agencies receiving money from the State of Oregon on tenterhooks. The failure of the Ds, the Rs, and the Kitzrobber to reach any sort of budget and PERS agreement increases the likelihood of either a session running into July and/or a special session when all the parties have cooled off and start to feel pressure from their constituents.
I remain puzzled by one issue. The Ds and Rs paint their disagreement as one between additional tax revenues and additional cuts to PERS. Obviously the Rs want additional (read draconian) cuts to PERS, while the Ds "only" want $200 million in additional revenue. The Rs want $7 billion for schools, but again with no mechanism in the money (or the money from SB822) to insure that the funds actually make it to the classroom before being skimmed off by administrators, superintendents and other highly compensated individuals. This seems to be foolish and even if the schools were to get all they asked for or at at least all they wanted, what would stop them from coming back in 2015-17 for even more.? We all know that the schools, in particular, have an insatiable appetite for more money, yet astonishingly little additional money goes to the people who need it - classroom teachers, classroom assistants, new books, more modern curriculum, etc. But let's assume that this is the central wedge issue between Rs and Ds. More PERS cuts for more school dollars, while the Ds want more revenue and lesser (or no more) PERS cuts. Assuming this is the case, and also assume that the Kitzrobber was correct when he stated that, with the May forecast, the state has enough money to meet current budget needs and could adjourn and go home. If this is true, why are the Ds still meeting with Rs. Why not go home and let the Rs rest of their lack of accomplishments in this session. Why not let them twist in the wind?
The answer, it seems, rests in what isn't being stated, what's blowing around in the idiot wind. The elephant in the room isn't PERS right now. The elephant is the nearly $2 billion in revenue generated by the renewal of the Hospital Provider's tax. This tax, first approved in 2003 (if I recall correctly), is worth $1.3 billion in revenue to Oregon from providers and Federal reimbursements. It was slated to sunset at the end of fiscal 2012, but is being continued indefinitely if approved by the Legislature. The Oregon House approved the continuing resolution in mid-May by a 54-5 vote, but the bill is currently stalled in the Senate, undoubtedly because of R reluctance to support it unless they get additional PERS reform. Since it is a revenue bill, it requires a 60% supermajority to pass. The Ds have a shaky 16-14 majority in the Senate and would require 2 R votes to pass the resolution, assuming all Ds hold firm (which itself is questionable).
So, it is disingenuous, in the extreme, to suggest that the differences between the Rs and Ds is over the budget. The budget is set. The Rs want another $250 million or so for the schools, and they want to get it by cutting PERS by $1.3 billion. The math doesn't work out there. The Ds want another $250 million in taxes for what? Who can't use additional revenue? In any case, the issue is really about PERS versus the hospital tax, not PERS versus the Ds desire for an additional $250 million in taxes on corporations and affluent individuals and senior citizens who have medical expenses.
Neither side seems willing to budge at the moment; all the signs point toward a stalemate. After Tuesday's meeting, in which Tina Kotek walked out, there are no further meetings scheduled. The Ds can't just vote the current budget and go home because the hospital tax lingers there without the required two R votes. Whatever happens, it doesn't seem to be happening quickly or at all. I'm betting on continuing budget resolutions to keep government functioning past the end of the biennium, June 30, a possible adjournment, and then a special session to finish the budget later in the summer, about the time legislators are planning to take their summer vacations. You better send spouses and kids away now legislators. It is going to a long, hot, summer for the rest. Don't blame anyone but yourselves. You're all greedy, and you reap what you sow. Enjoy your vacations in Salem.