Keep Oregon’s Promise

by Steven Demarest, President of SEIU Local 503 OPEU

As the Oregon Legislature prepares for its 2017 session, the big thing on everyone’s mind is the $1.7 billion revenue shortfall. This shortfall is the result of healthcare costs shifting from the federal government to the state and the increasing unfunded liability for PERS. To make sure that we protect services, provide people health care, have the schools our kids deserve, and provide a secure retirement for public employees, we need a balanced, long-term solution. But some politicians in Salem and corporate CEOs are only interested in making cuts that will hurt families in Oregon. One such cut could be directed at Oregon’s Public Employee Retirement System (PERS).

When we’re talking about cuts there is always a choice: Either we balance the budget on the backs of Oregon’s families, or we raise new revenue by addressing our lowest-in-the-nation corporate taxes. I believe the choice is clear. Oregon should be investing in education, health care, and other critical public services, not making cuts while big corporations get away without paying their fair share.

It’s also true that we need to work with leaders in the Legislature to address the PERS unfunded liability — the unfunded liability is the mismatch between the plan’s obligations and current assets. As public employees, SEIU members want to be part of creating a balanced, long-term solution. After all, it’s our retirement plan and we need it to be healthy.

Let’s start the conversations with two core principles:

  1. No PERS change should be illegal. We’ve been down this road before. In 2013, the legislature passed a package of bills that would have covered the unfunded liability by reneging on promises made to public employees. The State Supreme Court rightly ruled the bulk of those changes illegal. This means that proposals in 2017 cannot renege on promises the state has already made.
  2. The unfunded liability is a long-term funding problem that requires a balanced, long-term solution. Proposals should include new revenue, reductions in cost to employers, and changes to ensure that current employee’s benefits are sustainable. Some proposals, like diverting the 6% employee contributions to reduce the unfunded liability, are simply pay cuts in disguise and do not reflect a balanced, long-term approach.   

It’s also important for us to understand where the unfunded liability is coming from:

  • 70% comes from benefits being paid to retirees
  • 16% comes from future obligations to Tier One members who have not yet retired
  • 9% comes from future obligations to Tier Two members who have not yet retired
  • 5% comes from future obligations to OPSRP members

We have cut the retirement benefits of public employees to the point that most (53% of public employees are OPSRP members) have a nearly sustainable retirement package. Further cutting the benefits of current and future employees, or introducing a fourth tier, would do little to address the bulk of the unfunded liability problem. It would, however, reduce public employees’ retirement security.

Click here to learn more about PERS and hear stories from the
people who are fighting to Keep Oregon’s Promise

At the end of the day, when we talk about PERS, we are talking about firefighters, snow plow operators, cafeteria workers, child welfare specialists, park maintenance staff and the many other public employees who keep the state running and care for those that no one else will care for. These are hard jobs done by workers who make big contributions to Oregon, and I want to live in a state that values them and invests in them.

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