PORTLAND, Ore. (AP) - Members of the business community, along with a former Democrat governor and former Republican lawmaker, have filed two prospective ballot measures that would aim to rein in the Oregon public pension system's growing deficit and runaway costs.
The Oregonian/OregonLive reports the first potential ballot measure would give new hires the option of a 401(k)-style retirement plan financed by matching contributions of 6 percent of salary by employers and employees. New hires could choose that new plan or the pension system - but not both, as employees get today.
The second initiative would require the Legislature to study a new 401(k) style retirement plan for new hires and submit recommendations to implement it by 2022. Meanwhile it would require existing and new employees to pay one-third the cost of their pension benefits moving forward, which would range between 2.8% and 6% of pay.
For now, the initiatives launched Thursday serve mostly as negotiating leverage in a legislative session where Democrats want to pass new corporate taxes to fund schools, but have yet to detail how they will ensure that money makes it into the classroom, and not pay for the rapidly escalating pension costs that are hitting public employers across the state.
The measures are viewable here.
Former Democrat Gov. Ted Kulongoski and former GOP state Sen. Chris Telfer of Bend are the chief sponsors of the initiatives. Tim Nesbitt, a former Kulongoski aide and one-time labor leader, said he received a grant from the Oregon Business Council to launch the initiative effort, Oregon Public Broadcasting reports.
Nesbitt told OPB he hopes the measures spur the Legislature to take action on pension costs. But he said he is also working to assemble a broad coalition that could take the issue to the 2020 ballot.
State Sen. Tim Knopp, R-Bend, a longtime advocate of major PERS reform, told NewsChannel 21 on Thursday, "I support their bi-partisan effort. If the Legislature fails to act on fair and affordable PERS reform, the people of Oregon will need to reform PERS at the ballot in 2020."
News release from Unified Business Oregon:
UNIFIED BUSINESS SUPPORTS PERS/PENSION INITIATIVES FOR 2020 BALLOT
UBO Director Ogden, a former elected Mayor, says government is at a pension tipping point
TUALATIN, OR. – Today, Executive Director Lou Ogden announced that Unified Business Oregon supports all three pension measures working their way through the citizens' initiative process. Ogden, the former 24-year Mayor of Tualatin, said that state, local, and school district budgets are at a tipping point where pension obligation costs will eclipse revenues in a manner which will cripple the delivery of critical services to citizens.
"Our organization applauds Governor Kulongoski and Senator Telfer for stepping up to lead on PERS reforms," Ogden stated. "They to have set aside party differences to come together to do what's right for all Oregonians, and we'll be there to help."
Ogden noted the time for PERS reforms are now. He highlighted an Oregonian article that shows 68,000 PERS members are retirement-eligible. "Before tens of thousands of workers wave out in retirement, and before new employees come in under the current defined benefit system, it would be better to hit the reset button on pensions, ensuring we have a retirement system in the future that doesn't create new, unfunded liabilities for generations to come."
The initiatives Kulongoski and Telfer introduced today would create a 401-K style pension system with shared contributions between government employers and employees. Both initiatives are statutory, requiring 112,020 valid voter signatures.
The other measure, IP 13, sponsored by former State Representatives Mark Johnson and Julie Parrish, along with Oregon Board of Education member Kim Sordyl, isn't specific to PERS, but would create a constitutional provision disallowing any state or government entity from borrowing to pay pension obligations.
"These measures do what's right for taxpayers in working to get us out from under future unfunded liabilites. But they also honor employees in that any retirement plan offered should be paid in full in the year the pension liabilities are incurred, not kicked down the road into an unknown fiscal future. That gives everyone surety in the system."
Ogden was dismayed that the Legislature let all meaningful PERS bills die at the first hearing deadline last week. "Voters shouldn't have to sign petitions to get PERS fixed. They elect representatives to do the heavy lifting on complex policies. But fixing our pensions, particularly before the next recession, is just too important, so we appreciate the work being done by former elected leaders to solve the problem."