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Chair's Blog

A milestone for Oregon: PERS reform boosts education, small business October 2013
By Gregg Kantor

Oregon reached a milestone this week. On Wednesday, the Legislature approved a deal that will put a significant dent in the cost of the state’s Public Employees Retirement System (PERS).

As a longtime supporter of PERS reform, the Alliance believes the PERS/revenue package approved by the Legislature will be a big boost for public education and many Oregon businesses, and we joined with partner business organizations across Oregon to support the package that ultimately was passed. We particularly applaud Governor John Kitzhaber and Democratic and Republican legislative leaders for working tirelessly to arrive at this package and then put together the votes to get it passed. At the end of the day, a majority of legislators did the right thing for Oregon and said yes to addressing an issue that has plagued the state for decades.   

The new PERS reform will reduce the state’s unfunded PERS liability by some $4.6 billion, and alleviate the continued upward pressure on PERS rates facing virtually every unit of government in Oregon. The biennial savings are expected to be almost $1 billion, and that is money that can go toward such important public services as education, law enforcement, social services and economic development. Most importantly, it eliminates the pressure on government entities across Oregon to choose between raising taxes or cutting staff and services in order to find the dollars to pay for increasing retirement-related costs.

With education as one of our top priorities, we were especially supportive of this package because of its positive impacts on the state’s public school system. The package will reduce one of the most significant cost drivers impacting Oregon schools, enabling districts across the state to add back many teaching positions and school days lost over the last few years. For Portland Public Schools, the PERS/revenue package translates to enough money for 180 teachers, for Beaverton 131 and for North Clackamas 53 (to see the impact on districts across Oregon, click here). This is a huge improvement for an education system that is lacking the resources essential to preparing the next generation of workers.

We are also pleased to see that the revenue component of the plan brings much needed tax relief to small businesses across Oregon that file as S-corporations or LLCs. We believe this will lead to a focus on new business investment and grow much needed jobs in every corner of our state. We would have preferred that the revenue bills that were part of this effort included no tax increases on any segment of the business community, but we recognize that the deal that was struck, on the whole, was good for Oregon and needed to move forward.

Change like this doesn’t come easily. There was huge pressure on the Legislature to vote no on this package of bills, especially from existing PERS retirees and public employee unions.  We don’t deny that the this reform has a human impact, but even with the changes – which primarily are limits on the annual PERS cost-of-living increases -- Oregon’s public employee pension plan remains very generous.

At the end of the day, it was strong and courageous leadership that got these bills passed. Please take a moment and thank those leaders, Gov. John Kitzhaber, Senate President Peter Courtney (Sen.PeterCourtney@state.or.us), Senate Republican Leader Ted Ferrioli (Sen.TedFerrioli@state.or.us), House Speaker Tina Kotek (Rep.TinaKotek@state.or.us) and House Republican Leader Mike McLane (Rep.MikeMcLane@state.or.us).

Next up: A special session to deal with the Columbia River Crossing, another Alliance priority. We will keep you informed as that issue progresses.

Thank you to all of our members who reached out to state leaders over the past several months as this package was developed. I encourage you to reach out again and say thank you for their work on this important and needed reform.

On another topic: As you probably know, the Alliance board of directors voted in September to support marriage equity for all Oregonians. This is consistent with positions the Alliance and its predecessor organization, the Portland Chamber of Commerce, have taken in support of equity.

Because there is no marriage measure currently approved for the ballot, we have not endorsed a specific ballot title or campaign and, at this point, we are not participating in a campaign. We did, however, say we would look at participating in a business-led effort to support the marriage equity movement. We will keep members informed if such an effort evolves.
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