The Mudroom

PERS Strings

Guv Watch

By Randy Gragg February 2, 2010 Published in the March 2010 issue of Portland Monthly

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Image: Thomas Pajot

FORMER Oregon Secretary of State Phil Keisling has an inconvenient truth for state workers. In a chilling recent white paper, Keisling estimates that the economic crash has left Oregon’s Public Employees Retirement System (PERS) in need of over $1 billion—yup, billion—from public employers by 2013 to cover its future obligations to retirees. Keisling refers to the impending PERS crisis as a “tsunami.”

How do the gubernatorial candidates plan to help public employees and taxpayers weather the wave?

Republican Allen Alley is big on reform—but small on details. “We must act to preserve the retirement benefits of the over 300,000 hardworking state employees who served our state well,” Alley says. “We need to create a sustainable system that ensures benefits for future retirees.” Alley’s Republican rival, Chris Dudley, failed to respond to calls, but on his website Dudley talks about the “containment” of PERS—as if it were a noxious weed—and seems to pit retirees against current teachers. “As pension costs associated with education rise, less money can be spent on teacher salaries and benefits, school infrastructure, and extracurricular activities,” the site reads.

Meanwhile, the Democratic approach has been a shoulder shrug. “Everybody’s retirement plan has taken a hit because the economy isn’t good,” Bill Bradbury says.

John Kitzhaber contends that the fund will remain actuarially sound in the long term, but says the real question is how to deal with the short-term deficit. “We’ve got to look at the trade-offs between laying people off and cutting public services or benefits.” Anybody got a life preserver?

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