As we get deeper into the 2019 Legislative Session, a familiar specter is back: the runaway costs of the Public Employees Retirement System.
The cost of the PERS unfunded liability stands at roughly $26.6 billion. Facing that behemoth, the Legislature is looking for tax increases on the business community and Gov. Brown may look to raid SAIF funds to subsidize the costs. Chief among those efforts is the Joint Committee on Student Success Subcommittee on Revenue, which is seeking $2 billion in taxes, supposedly to fund K-12 education.
But as you may have seen in other OBI newsletters, our partners at the Oregon Business Plan completed an analysis showing how PERS increases will eat up the proposed $2 billion tax idea. Instead of the funds going to students, as promised, it could more likely end up paying down PERS.
Newspaper columns in The Oregonian, and Corvallis Gazette-Times promoted the OBP report, noting PERS could use up a quarter of the new funds within the next two-year budget cycle. But the cost of PERS hits even harder in years to come. The analysis showed PERS could consume up to 80 percent of the revenue over the next 12 years.
With that looming specter, OBI and its partners aren’t sitting idly by.
In late February, the PERS Solutions for Public Service launched its website, PERSSolutions.org. This informative website is a tool to help us spread the word about why PERS costs are a problem and how those costs impact Oregonians.
Meanwhile the team at OBI has been working to keep PERS in the debate when it comes to proposed taxes and fees in the Legislature. We’ve urged the student success revenue subcommittee to consider a value-added business activity tax option, as an alternative to a gross receipts tax, which has strong opposition among many businesses. . And OBI partnered with 22 business organizations to sign a letter emphasizing reigning in PERS costs and other important issues in the tax discussion.
PERS reform and cost control is needed to ensure Oregon stays on-budget, and to keep the business community and employers investing in our state. We’re advocating the Legislature address PERS costs now to keep the specter from returning in the next session.
We work hard on these fiscal issues, but what really makes a difference is when legislators hear from all of you. I hope you are all getting emails from Brighter Oregon, the advocacy arm of our fiscal initiative.
Since the Legislature convened in January, we have generated more than 6,000 emails to lawmakers urging them to focus on cost control, especially PERS reform, and balanced tax policy. If you are not getting these emails, please go to the Brighter Oregon website to sign up. Another good resource, is the OBI website, where you can find information about all 90 lawmakers.
As always, don’t hesitate to contact me if you have thoughts about our directions and priorities. I like to hear from you. My email is email@example.com.