A career in education offers a truly unique opportunity to positively impact the future of our state. Working with our youth is a truly rewarding experience. It is particularly satisfying to be a part of young people reaching their dreams.
However, teaching can be very stressful. Public officials demand higher graduation rates and test scores, while parents expect lower class sizes and comprehensive elective programs. More students are arriving at our doors less prepared to learn, requiring significant resources to address behavioral challenges. These factors cause stress and anxiety, often resulting in fewer people pursuing and maintaining careers in education.
There is an answer to address these concerns. We need more trained adults with more kids.
Changes like this would require a significant reinvestment in education. Although Gov. Brown and the Oregon Legislature should be applauded for their current efforts to raise $2 billion in additional revenue for education and critical services, they face a significant challenge in implementing necessary cost containment measures. The primary cost driver for schools is the Public Employee Retirement System, also known as PERS. Without changes to PERS, it is possible 80 cents on every new revenue dollar will go to PERS costs over the next ten years. Clearly, we have a major problem that has reached a crisis point.
The problems with PERS are very complex. Discussions quickly become emotional since PERS reform efforts often pit public employees against the private sector. This is counterproductive. At some point, Oregonians need to come together for the sake of our kids. We need to stop fixing blame and starting fixing the problem.
A starting point is to accept the facts:
- School districts spend about 84% of their money on personnel costs. We are a people business. Some 20% to 30% of these costs are PERS related. This percentage will continue to grow in the coming years.
- The state, schools and local governments now owe $26 billion to the PERS system. This amount is the Unfunded Actuarial Liability (UAL), otherwise known as legacy costs. This is the amount public employers owe for benefits earned by public employees and retirees.
- Veteran public employee costs, (Tier I and Tier 2) consist of the majority of the UAL debt. Newer employees receive less generous pensions in a third tier, Oregon Public Service Retirement Plan. (OPSRP) OPSRP employees consist of approximately 60% of the Oregon workforce.
- The Oregon State Supreme Court has consistently upheld the concept of honoring existing contracts. Thus, PERS changes “cannot go backward.” Current retirees and employees cannot lose benefits they already earned. However, changes can be made moving forward.
Clearly, we have a situation that is untenable. It will require leadership and sacrifice for Oregonians to course correct. There are several ideas to begin the discussion. These ideas, and others, can be found on www.PERSsolutions.org.
- Transfer a portion of the UAL debt to the state rather than local municipalities. Explore bonding capacity.
- Create a “Work Back/Payback” program for employees to retire and work back with a portion of their salary and benefits redirected to pay down the UAL.
- Explore options with the employee 6% contribution to pay down the UAL that is fair and protects OPSRP employees.
In closing, we encourage all Oregonians to take the first step to address our PERS crisis: listen, learn, and value the perspectives of others.
Mark S. Mulvihill, Ed.D IMESD Superintendent
Kelly Bissinger IMESD Board of Directors Vice-Chair
