Dear Mr. Sickinger:
As a public employee, I’ve been fascinated with the huge amount of attention the Oregonian has paid to our pension plan over the past several months. It seems that nearly every other Sunday, there is a first page, above-the-fold article authored by you on the need to “reform” PERS. “Reform” appears to be synonymous with reducing benefits and not with “how can we stabilize the system with everyone’s needs in mind?” By way of example, you have repeatedly referred to eliminating the 6% pickup as “reform.” Please, let us call it what it is: a pay cut, a compensation reduction.
Indeed, almost nowhere in your articles do I see anything but list after list of ways in which PERS can be stabilized, almost all of which amount to hits on the overall compensation of public employees. Seven of the eight fixes you have proposed in Monday and Tuesday’s papers are of that type. The eighth involves extending the repayment.
Not one of your proposals involves asking taxpayer – and every public employee is also a taxpayer sharing that burden – to shoulder any of the cost of the gap. Not one of your proposals recognizes that 68% of the problem is the debt incurred to the benefit of already-retired individuals. Not to cause a schism between past and present public employees, but I would appreciate it if you told me why current employees have any more obligation to Tier I retirees than do taxpayers as a whole? And how much of the remaining 32% is attributable to Tier I, which ended almost two decades ago? My understanding is that all but 4 or 5% falls into that category. What you have not mentioned – what the City Club report conceded – is that Tier II is 96% funded and OPSERP (which the State dared not call Tier III) is 100% funded. The obligation to every public employee who has entered the system since the early 1990s is almost entirely dealt with. PERS is the eighth best funded state employee retirement system in the nation. The City Club report obscured that when it deliberately did not disaggregate Tier I and Tier II in its analysis, creating the impression things were still far more problematic than they actually are.
Another matter you barely mention is that the “deficit” on which you base this analysis is a snapshot in time. As recently as four years ago, before the current economic downturn, the $16 billion deficit of which you now speak was less than $1 billion. And, with continued improvement in the economy, we can expect the current deficit to shrink considerably. Between 2001 and 2007, the gap between obligations and needs kept closing. It can happen again. Certainly improving economics should be accounted for.
Now let’s talk about those employees whose benefits you propose cutting in various ways. I haven’t seen many – if any – talked to in your articles. You have stuck to the antiseptic numbers, so your readers won’t see there are people behind those figures. The people working now – largely Tier II and OPSERP – will never retire with the “luxurious” pensions your newspaper continues to describe. The average is $24,000 or so. Even with social security, this is not going to put state workers into beachfront condos and Jaguars on the taxpayer dime. It would be nice if your newspaper, if it is making any effort at balanced reporting, sent you to talk to union members and union representatives. But I haven’t seen that story yet. I hope I will.
Your articles, the Oregonian’s editorials and even our governor have talked about eliminating the 6% pick up as a key “reform.” Again, let’s at least be honest and call it a pay cut. Let’s also remember the history. It was a proposal in 1979 in lieu of raises in a period when inflation was running, 10, 11, 12% per year. It was fairly bargained and fairly related to the cost of workers. It was a concession by the unions.
Workers have bargained for a pension of specified value. Although deferred compensation, they’ve already worked for it their entire careers. They are entitled to it. You can’t hire a painter for $10,000 to paint your house then, when he’s up on the ladder 90% done yell up to him “I’ve decided only to pay you $5000.” That is what most of your “reforms” amount to.
The workers you now suggest should take this cut have taken four years of furloughs, seen pay frozen as often as not over the last decade, and earn considerably less in Oregon than their private sector counterparts in most job areas. There comes a point where government will not be able to attract the qualified workers it needs. Apparently, capitalist theory – that one gets what one pays for – applies only until one goes to work for the government, then is suspended, according to the Oregonian.
None of this is to deny there is a problem. But I do suggest that you, the Oregonian and the City Club have overstated it. And I do suggest that you have failed to provide the whole picture. Talk to the workers. Use fair language instead of calling every hit to those workers a “reform.” And then let’s have a conversation with all participants at the table. I ask that the Oregonian bear its obligation as a paper of record in this State to present all views on this important subject.