Oregonian: Business Group Moves Forward on Pension Cuts Ballot Measure

A business coalition seeking to tackle Oregon’s pension crisis took another step toward putting two reforms on the ballot in November.

The group, PERS Solutions for Public Services, submitted 1,000 signatures to begin the process of drafting ballot titles for Initiative Petitions 22 and 23. Former Gov. Ted Kulongoski and Chris Telfer, a former Republican legislator from Bend, are the initiatives’ chief petitioners.

Ultimately, to put the initiatives on the November 2020 ballot, the group must collect 112,020 signatures for each measure by July 2020.

Initiative Petition 22 seeks to give newly-hired public employees the option of choosing a 401(k)-style retirement plan financed by matching contributions of 6% of salary each by employees and their employers. Alternatively, new hires could choose to stick with the pension plan, but without the supplementary individual account they get today. They also would be required to contribute 6% of their salary toward the cost of future pension benefits, starting July 1, 2021.

The other potential ballot measure, IP 23, would require the Oregon Legislature to study a new 401(k)-style plan for new hires and submit recommendations to implement it by 2022. It would require existing and new employees to pay one-third the cost of their pension benefits moving forward, which would range between 2.8% and 6% of pay depending on their job classification and membership tier.

Tim Nesbitt, a former labor leader, now consults with the Oregon Business Council, which backs the reform coalition. He said the organization has always preferred a legislative solution to PERS’s funding crisis, and supported this year’s passage of Senate Bill 1049. Among other provisions, the new law instituted employee contributions to the pension fund, but at a more modest level than contemplated in the ballot measures.

The new law requires public employees hired before Aug. 28, 2003 to contribute 2.5 percent of their pay to the pension. Those hired after that date must contribute 0.75 percent of their pay.

Nesbitt said the business organization’s board met Wednesday and decided to move forward with the process of drafting ballot titles while it sees if the projected savings from the new law materialize, whether it gets challenged in court and how the state’s fiscal picture shapes up.

“We don’t expect to make a final decision on whether to proceed to the ballot until early 2020,” Nesbitt said. “The whole purpose here is to protect funding for public services, and I wish that were better appreciated by those who are saying ‘no’ to any form of reform.”

Public employee unions have discussed a court challenge to the employee contributions now mandated by the law. Melissa Unger, executive director of the Service Employees International Union 503, said earlier this week that a challenge is still being actively considered.

John Larson, leader of the state’s teachers’ union, shot back after hearing the petitions were filed, saying the measures “would yet again slash retirement benefits for educators, firefighters and other public employees.

“People who work to serve our communities don’t deserve these continued attacks on their financial security,” he said, “and Oregonians don’t support these policies.”

He argued the measures would “hit lowest income workers the hardest,” listing bus drivers, cafeteria workers and janitors.

If backers decided to go forward with a ballot measure, it would likely be an expensive campaign, and it’s unclear how much support there is in the business community to finance such a fight.

“I don’t know,” Nesbitt said. “It depends on how things play out. What I said to the OBC board yesterday was that this should not have continue to be your project. It shouldn’t be that the business council has to take the lead.”