Senate passes PERS cost containment bill, approves $9 billion State School Fund
Sen. Fred Girod said the looming Public Employees Retirement System rate crisis demanded action now or Oregon would face worse problems down the road. (Photo by Jake Arnold, OSBA)
Public pension reform barreled down the tracks Thursday, passing the Senate.
Senate Bill 1049 would alter Public Employees Retirement System rules, lowering average employer rates about 5.4 percentage points. It would also decrease some public employee retirement benefits.
Senators from both parties struggled with the need to fund public services weighed against supporting workers who provide them.
“This is probably one of the hardest votes you will take in a lifetime,” said Sen. Fred Girod, who carried the bill.
Girod, R-Stayton, summed up the political sides: If you are on the left, it is unfair to workers; if you are on the right, it doesn’t go far enough. Girod said he agreed with both positions but the math dictates action.
“In short, we have a severe problem with PERS,” he said. “We are either going to have to do major layoffs or the plan is going to go insolvent.”
Sen. Tim Knopp, R-Bend, called the bill the best opportunity to salvage the system. He said it would save school districts millions of dollars, enough statewide for more than 1,800 teachers.
“This bill takes the best of the bad options,” he said. “There are no good options.”
Sen. Lew Frederick, D-Portland, said he supported the bill with “incredible regret” because if the state doesn’t do something, rising PERS costs will continue to take money from classrooms.
Sen. James Manning Jr., D-Eugene, also spoke of the pain of pitting public workers’ benefits against students’ needs.
“My heart is broken today because my back is against the wall,” he said. “I have two worlds that are colliding today.”
OSBA Executive Director Jim Green testified last week in support of the bill, calling it a needed cost containment measure for students’ sake.
The bill passed 16-12, with politicians who rarely find themselves on the same side voting together.
The amended bill zipped through committees Tuesday and then hit the Senate floor Thursday. A rules suspension allowed it to be moved up from its Friday agenda spot. Senators grumbled on the floor that they hadn’t had time to prepare remarks.
The bill is expected to come up in the House next week. Vote counters are scrambling to figure out which way the House leans, but behind-the-scenes deals on other legislation will likely sway the outcome.
If it passes, Gov. Kate Brown is expected to sign it.
In other business, the Senate also passed the $9 billion State School Fund. It now goes to the governor.
The State School Fund exceeds Legislative Fiscal Office current service level estimates for most districts. It includes a $200 million top-up from the recently passed Student Success Act, which created a new business receipts tax to support education.
Sen. Betsy Johnson, D-Scappoose, voted for the Student Success Act on the condition the Legislature offered substantive PERS reform. She voted for the PERS bill without comment.
- Jake Arnold, OSBA
jarnold@osba.org