Reports last week drew gasps over a huge leap in employer contributions for the public employee retirement system. But even those reports fell short of the actual impact on taxpayers.
State and local governments pay an average 10.6 percent of payroll into PERS. That average now is headed to almost 20 percent. In addition, many governmental bodies pay an additional 6 percent into PERS due to past agreements in which the "pickup" was substituted for a pay increase.
The state, Yamhill County and city of McMinnville each pick up that additional 6 percent. McMinnville School District paid the bounty for a number of years, but traded it in 1994 for a 6 percent pay hike.
All of this takes place while Oregonians hold their breath for the Oregon Supreme Court to rule on constitutionality of the 2003 Legislature's PERS reforms. If those laws are not upheld, PERS rates will skyrocket even higher.
The PERS board may yet decide that the 9 percent increase, enacted to cover investment losses a few years ago, can be implemented in two stages - half in July, half in 2007. Most local budgets are being built on the premise that the board, which meets this month, will authorize a phased-in increase.
PERS has the unenviable task of cleaning up the mess from a former board that made irresponsible, even unconscionable decisions. Its actions, over the years, allowed many public employees to retire with monthly pension checks equal to and exceeding their highest working wage, driving up costs to taxpayers at every level of government.
Optimists thought the situation was resolved. This huge increase belies that optimism, and a court edict could destroy it.
Public employees deserve fair pay and pension. But Oregon taxpayers deserve governmental programs that don't drain resources from essential services.
Some say that without more taxes, public budgets will be balanced on the backs of our children, our elderly and our needy. But in fact, the services for those people are being compromised by the demand for excessive amounts of money to be swallowed by PERS.
