The following article was published in the Bend Bulletin on March 26, 2012.
Bend’s budget problems can be traced to PERS requirements
By Daniel C. Re
Published: March 26. 2012 4:00AM PST
In The Bulletin on March 3, reporter Nick Grube wrote of the pessimistic outlook some city officials have for Bend over the next five years. The article described how infrastructure projects will require drastic increases to utility bills and that the city cannot afford to hire more police officers and firefighters, which has resulted in a longer response time to calls for assistance. Police Chief Jeff Sale is quoted as saying that eventually the only way the police department can continue to operate will be to reduce services — it will get to the point where if someone steals your property, the police will do nothing unless the thief also physically assaults you.
What the city officials are saying is true, but it is important to recognize that the PERS funding priority imposed on the people of Oregon by PERS legislators in 1989 has substantially contributed to this problem.
According to the city, the 2009-11 Bend personal services budget — which covers employee salary and benefits — was $99 million. That included $66.3 million for salaries and $10.9 million for PERS. The balance was for employee insurance and payroll taxes.
For the 2011-13 biennium, the city reduced its employees by 12 full-time equivalent positions. But, despite having fewer employees, the city’s 2011-13 budget for personal services increased by $4.2 million. That amount includes $64 million in salaries — a $2.3 million reduction — and PERS payments of $15.5 million, up nearly $4.6 million. Insurance and payroll taxes also increased by $2 million.
The entire 2011-13 increase in the personal services budget goes to PERS. Not one cent goes for services. When city officials say the financial future for Bend looks bad, what they mean is that it looks bad for non-PERS residents of Bend, and they are absolutely right.
Non-PERS members will be forced to pay more and get less because Oregon law requires PERS be paid first. Services to the people can only be provided with what’s left after PERS is paid for. This same problem exists for every other Oregon public employer, with like results. That is why school districts are forced to cut back on educating our children. They have no choice. And it’s going to get much worse.
The PERS employer rates are projected to increase significantly in July 2013. That increase will result in more reductions in government service so that PERS can be fully paid.
This PERS problem did not exist before 1971, the year legislators were first allowed to join PERS. Today, every branch of Oregon’s government is controlled by PERS members, and no PERS law can be changed without consent of PERS members. While funding public employee benefits first is a legitimate political option, it is so only if approved by the people who must pay for those benefits. The people of Oregon have been excluded from making PERS laws since 1971.
The current laws have been made by PERS legislators who were acting in their own financial self-interest. When the people of Oregon exercised their constitutional right to change the PERS laws in 1994, Oregon judges — who were forced into PERS in 1984 by the PERS legislators — invalidated those changes.
The Oregon Supreme Court recognized, in Burt vs. Blumenauer, that the legitimacy of a chosen governmental policy rests on the consent — if not consensus — of the governed and that excessive or questionable efforts by government to manufacture the consent of the governed calls the legitimacy of its action into question. Clearly, the legitimacy of the PERS laws made after 1970 is questionable.
Oregon needs professional, fairly compensated public employees, but all Oregonians must have a meaningful voice in determining what they will be required to pay for public employee benefits and what priority those benefit payments will have. The current PERS laws have been made exclusively by PERS members and they must be changed.
— Daniel C. Re lives in Bend.
Published Daily in Bend Oregon by Western Communications, Inc. © 2011