Businesses And Elected Officials Differ Sharply On Oregon's Pension Costs

By Jeff Mapes (OPB)
Portland, Oregon Dec. 6, 2016 1:45 a.m.

One thing was certainly clear at the Oregon Leadership Summit on Monday: Business leaders and the state’s top elected officials are sharply divided over the state’s public pension system.

Related: Measure 97, PERS Divide Candidates For Oregon Treasurer, Secretary Of State


Oregon business executives used this year’s event at the Oregon Convention Center in Portland to once again push to reduce rising pension costs. They say the state's Public Employees Retirement System will jump from 16 percent of payroll to 30 percent over the next six years if nothing is done.

The business leaders said they are willing to support new taxes — but only if the governor and legislators tackle PERS.


Gov. Kate Brown cast cold water on that idea.

“I’m telling you, if your only solution is to cut teacher salaries and renege on our promises to retirees, then this conversation will not go very far," Brown said in a terse, seven-minute speech at the summit.

Brown noted business interests were successful in defeating a proposed corporate tax initiative — Measure 97 — that would have raised taxes by $3 billion a year. She said she now wanted to hear from business leaders on what they would accept.

House Speaker Tina Kotek, D-Portland, and Senate President Peter Courtney, D-Salem, also urged business leaders to work with them on a plan. Both Brown and Kotek also said that rising PERS costs only account for about one-fifth of the state's $1.7 billion budget shortfall in the next two-year budget.

But business leaders said the pain of PERS goes far beyond the state budget. They said it also affects school districts and local governments.

Tim Nesbitt, a former Oregon AFL-CIO president and aide to former Gov. Ted Kulongoski, outlined an approach for cutting PERS that would not reduce the take-home pay of government workers. But it would leave them with smaller 401k-type accounts when they retire.

He said the proposed changes would "enable the state's cities, schools, universities and counties to minimize PERS cost increases that will otherwise decimate their budgets."