Oregon’s Public Emplyee Retirement System is in the red. It’s $22 billion short of funds needed to pay for pensions owed to government employees and retirees. This unfunded liability is borne by state and local governments – and ultimately all taxpayers.
In addition to the total debt, payments for PERS are rising each budget cycle, taking an ever bigger bite out of tax-funded budgets for schools, police, health care, housing, and virtually every service that state and local governments provide. This PERS’ burden will double in four years, from $2 billion in the 2015-2017 cycle to more than $4 billion in 2019-2021. It will reach $10 billion by 2029.
Oregonians foot this bill. In 2010, the cost of covering PERS pensions through taxes amounted to $500 per year for the average Oregon household. Now PERS pensions cost each household about $1,500 per year. By 2022, the cost will pass $2,000 per year – and keep climbing.
This shortchanges public services. Every dollar spent on rising PERS costs is a dollar that cannot be spent to employ more teachers, firefighters, or other public servants. It’s a dollar that can’t be used to reduce class sizes, lengthen the school year, or add more career and technical education programs. Without action, PERS will consume all of the increased tax revenue that comes from a growing economy.