In 1971, the Oregon Attorney General reversed 25 years of prior law, including the opinion of the prior Attorney General, and held that legislators could join PERS. Based on that ruling, the 1975 legislature passed a law that allowed legislators to join PERS retroactively. Ever since, most legislators have joined PERS and they have aggressively changed the PERS laws for their personal benefit and the benefit of all other PERS members.
In 1983, the PERS legislators put Oregon’s judges into PERS. This insured that any lawsuit involving PERS would be decided by PERS members. Once the legislators and judges were in PERS, Oregon’s non-PERS citizens, who are required to pay for PERS, were no longer involved in making PERS decisions.
These two changes explain why PERS members have been guaranteed that their retirement benefits will never be affected by economic downturns. If a downturn occurs, such as the one we are currently in, the PERS legislators have passed laws that require all tax money to be used to fund PERS first. Our governments are allowed to provide the services they were created to provide if, and only if, there is any money left after PERS has been funded.
This reality became painfully clear on September 24, 2010 when the PERS Board announced that the employer PERS contributions would double for the 2011 – 2013 biennium. That increase is required to prevent PERS benefits from being reduced. This increase will cause at least one billion dollars in additional tax money to go to PERS. Education, public safety and all other government services will be cut back to pay this additional $1,000,000,000. If you have any doubt as to the truth of this statement, when was the last time you heard a government agency say it would reduce its employees PERS benefits in order to maintain services? If you have heard of this happening in Oregon, let me know. I have never heard of it happening.
Government officials often attempt to justify the payment of PERS first because of union contracts. That, however, is just a convenient, self-manufactured excuse. While union contracts do have that provision, the people of Oregon are represented in those negotiations with the unions by State management employees. Those State management employees will receive the same PERS benefits as the union members they are negotiating with. The “union contracts” are nothing more than PERS members negotiating with other PERS members to see how much money the non-PERS citizens of Oregon will to pay to PERS.
The changes made to the PERS laws since 1975 are the product of an unconscionable promotion of self-interest by the PERS legislators. Those legislators have violated their public trust and they must correct the inequitable situation they have created. If they do not, they just might reap the whirlwind.