A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System. https://www.wweek.com/news/2018/10/04/current-and-former-oregon-lawmakers-file-ballot-initiative-to-block-further-pers-debt/
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
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Here’s how the issuance of so-called “PERS bonds” are supposed to work: the borrower issues bonds that pay, for example, four percent interest. The borrower takes the proceeds of the bond issuance and invests them in stocks and private equity and earns, for the sake of argument, eight percent. That four percentage-point difference between borrowing costs and investment returns can then be applied to paying down PERS obligations. (And of course the exercise can fail if investment returns turn out to be less than the cost of borrowing. That has happened.)
The initiative Parrish, Johnson and Sordyl filed yesterday seeks to do two things: It would calculate the PERS system’s unfunded liability (which is currently about $22 billion) as of Dec. 31, 2022 and freeze it at that level. (The unfunded liability is the difference between assets set aside to pay future pension obligations, i.e. savings and investments and the actual future liability). Second, the initiative would prohibit borrowing to meet PERS obligations, forcing government entities to pay their pension obligations out of current budgets.
Parrish and Johnson, who served on the Hood River School Board for seven years, both voted for pension reforms in Salem. Sordyl has regularly spoken out about the need to get more money to into K-12 classrooms.
“We cannot continue to tax and borrow our way out of pension obligations,” Parrish says. “Fully funding pension obligations in the budget cycle in which the liabilities are incurred gives retirement surety to public employees.
“They will have the security that any dollars we put into their retirement are 100 percent available. But it also gives every government entity the ability to plan and budget, and taxpayers surety that they’re not on the hook for billions of dollars of unfunded pension liability going into the future.”
The petitioners now need to gather 1,000 signatures in order to begin the ballot title drafting process. If they meet that threshold, they then need to gather about 118,000 signatures to qualify for the 2020 ballot.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
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Here’s how the issuance of so-called “PERS bonds” are supposed to work: the borrower issues bonds that pay, for example, four percent interest. The borrower takes the proceeds of the bond issuance and invests them in stocks and private equity and earns, for the sake of argument, eight percent. That four percentage-point difference between borrowing costs and investment returns can then be applied to paying down PERS obligations. (And of course the exercise can fail if investment returns turn out to be less than the cost of borrowing. That has happened.)
The initiative Parrish, Johnson and Sordyl filed yesterday seeks to do two things: It would calculate the PERS system’s unfunded liability (which is currently about $22 billion) as of Dec. 31, 2022 and freeze it at that level. (The unfunded liability is the difference between assets set aside to pay future pension obligations, i.e. savings and investments and the actual future liability). Second, the initiative would prohibit borrowing to meet PERS obligations, forcing government entities to pay their pension obligations out of current budgets.
Parrish and Johnson, who served on the Hood River School Board for seven years, both voted for pension reforms in Salem. Sordyl has regularly spoken out about the need to get more money to into K-12 classrooms.
“We cannot continue to tax and borrow our way out of pension obligations,” Parrish says. “Fully funding pension obligations in the budget cycle in which the liabilities are incurred gives retirement surety to public employees.
“They will have the security that any dollars we put into their retirement are 100 percent available. But it also gives every government entity the ability to plan and budget, and taxpayers surety that they’re not on the hook for billions of dollars of unfunded pension liability going into the future.”
The petitioners now need to gather 1,000 signatures in order to begin the ballot title drafting process. If they meet that threshold, they then need to gather about 118,000 signatures to qualify for the 2020 ballot.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
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Here’s how the issuance of so-called “PERS bonds” are supposed to work: the borrower issues bonds that pay, for example, four percent interest. The borrower takes the proceeds of the bond issuance and invests them in stocks and private equity and earns, for the sake of argument, eight percent. That four percentage-point difference between borrowing costs and investment returns can then be applied to paying down PERS obligations. (And of course the exercise can fail if investment returns turn out to be less than the cost of borrowing. That has happened.)
The initiative Parrish, Johnson and Sordyl filed yesterday seeks to do two things: It would calculate the PERS system’s unfunded liability (which is currently about $22 billion) as of Dec. 31, 2022 and freeze it at that level. (The unfunded liability is the difference between assets set aside to pay future pension obligations, i.e. savings and investments and the actual future liability). Second, the initiative would prohibit borrowing to meet PERS obligations, forcing government entities to pay their pension obligations out of current budgets.
Parrish and Johnson, who served on the Hood River School Board for seven years, both voted for pension reforms in Salem. Sordyl has regularly spoken out about the need to get more money to into K-12 classrooms.
“We cannot continue to tax and borrow our way out of pension obligations,” Parrish says. “Fully funding pension obligations in the budget cycle in which the liabilities are incurred gives retirement surety to public employees.
“They will have the security that any dollars we put into their retirement are 100 percent available. But it also gives every government entity the ability to plan and budget, and taxpayers surety that they’re not on the hook for billions of dollars of unfunded pension liability going into the future.”
The petitioners now need to gather 1,000 signatures in order to begin the ballot title drafting process. If they meet that threshold, they then need to gather about 118,000 signatures to qualify for the 2020 ballot.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
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Here’s how the issuance of so-called “PERS bonds” are supposed to work: the borrower issues bonds that pay, for example, four percent interest. The borrower takes the proceeds of the bond issuance and invests them in stocks and private equity and earns, for the sake of argument, eight percent. That four percentage-point difference between borrowing costs and investment returns can then be applied to paying down PERS obligations. (And of course the exercise can fail if investment returns turn out to be less than the cost of borrowing. That has happened.)
The initiative Parrish, Johnson and Sordyl filed yesterday seeks to do two things: It would calculate the PERS system’s unfunded liability (which is currently about $22 billion) as of Dec. 31, 2022 and freeze it at that level. (The unfunded liability is the difference between assets set aside to pay future pension obligations, i.e. savings and investments and the actual future liability). Second, the initiative would prohibit borrowing to meet PERS obligations, forcing government entities to pay their pension obligations out of current budgets.
Parrish and Johnson, who served on the Hood River School Board for seven years, both voted for pension reforms in Salem. Sordyl has regularly spoken out about the need to get more money to into K-12 classrooms.
“We cannot continue to tax and borrow our way out of pension obligations,” Parrish says. “Fully funding pension obligations in the budget cycle in which the liabilities are incurred gives retirement surety to public employees.
“They will have the security that any dollars we put into their retirement are 100 percent available. But it also gives every government entity the ability to plan and budget, and taxpayers surety that they’re not on the hook for billions of dollars of unfunded pension liability going into the future.”
The petitioners now need to gather 1,000 signatures in order to begin the ballot title drafting process. If they meet that threshold, they then need to gather about 118,000 signatures to qualify for the 2020 ballot.
As if to remind Oregonians why the upcoming election matters so much, the board that oversees the state’s public pension system will meet Friday to adopt employer-contribution rates for the next two years. Prepare to hear cries of “ouch” from government offices and school districts across the state.
The Public Employees Retirement System finances pension obligations with investment earnings supplemented by contributions from the schools, cities, counties and state agencies that employ PERS beneficiaries. Because the PERS investment fund, even when booming, doesn’t generate nearly enough money to support the system fully, the PERS board periodically adjusts the percentage of payroll individual agencies and districts must contribute to make up the difference.
On Friday, the board will consider adopting new rates for the biennium that will begin July 1. Here’s what the change will look like for some local employers:
The city of Bend will see its contribution rate for longtime public employees with comparatively rich Tier 1 and Tier 2 benefits jump from 20.7 percent of payroll to 24.9 percent of payroll, a 20 percent increase. Contributions for newer employees on the less-generous OPSRP plan will jump from 12.1 percent of payroll to 16.2 percent of payroll, an increase of almost 34 percent.
Bend’s public school district will see Tier 1 and Tier 2 contribution rate jump from 18 percent of payroll to 22.8 percent of payroll, an increase of over 26 percent. And the rate for OPSRP employees will rise from 12.7 percent of payroll to 17.3 percent of payroll, an increase of 36 percent.
With these increases, Bend’s school district will have to hand PERS millions of dollars every year that would otherwise be used for something else. Like, say, hiring teachers. Unfortunately, the pain will continue. The pension system’s actuaries expect a similar increase systemwide for the 2021-2023 biennium.
Is it any wonder Bend-La Pine Superintendent Shay Mikalson lamented in a preface to this year’s district budgetthe Legislature’s “pending and compounding PERS crisis?”
If fixing, or even mitigating, Oregon’s ongoing PERS crisis were simple or politically easy, it would have been done years ago. Because it is neither, concerned taxpayers should look to support candidates who are serious about addressing the problem. Electing them is no guarantee of success, as just about any reform to the system will face legal challenges. But electing PERS do-nothings will guarantee the continuation of the status quo.
