Oregon schools face $358 million cost from PERS ruling

Thursday ‘s state Supreme Court ruling on a Public Employees Retirement System lawsuit could cost Oregon’s K-12 schools as much as $358 million in the 2017-19 biennium, according to official estimates.

The state Legislative Fiscal Office reached that figure by estimating that PERS rates school employers pay would rise by an average of 5.5 percent in 2017-19. Additionally, state government PERS employer rates, excluding K-12 schools and local government, would rise an estimated $319 million for 2017-19.

Unless the state Legislature takes action, those projected rate increases would continue to add significant costs to schools and other government agencies well past 2019, the fiscal office projects.

Jim Green, deputy executive director of the Oregon School Boards Association, said Friday he is hopeful that legislators will act swiftly to mitigate the financial blow schools are facing for 2017 and beyond.

“Figures of this magnitude have a direct effect on the quality of education Oregon schools can offer,” Green said. “Unless we can find a solution – and soon – our schools will face the very real prospect of teacher layoffs and cutting school days.

“Oregon cannot afford to shortchange its students. Our state economy depends on a thriving education system.”

State Rep. Knute Buehler, R-Bend, said the decision reinforces the state’s need for growth-focused policies. Here’s his statement, issued Friday:

Representative Knute Buehler released the following remarks:

“The state Supreme Court decision to overturn much of the cost-saving PERS reforms, regrettably, will result in more tax dollars funding retirement costs and less tax dollars for educating and learning in Oregon.

“Class sizes will likely go up and the length of the school year will likely go down. This is a terrible situation for our school districts and local governments in Central Oregon and across the state.

“Given the legal limitations we now have on meaningful PERS reforms, it is now more critical than ever for Oregon to grow its economy so we can better afford the government that past policy-makers and the courts have enshrined in law.

“We need policies that foster growth – economic growth, private sector job growth, wage and family income growth. We need to restore Oregon’s shrinking middle class.

“A combination of stimulating economic expansion and restraining out-of-date and unnecessary state spending – setting priorities – can help us meet the challenge of PERS costs, which continue to cannibalize funding for education, health care and public safety. We need to work smarter, not just bigger.

“I remain committed to supporting policies that allow all forms of businesses to thrive in Oregon – from start-ups to major corporations; I remain committed to policies that can help grow family incomes and Oregon’s middle class.

“More people with good paying jobs in Oregon will create more revenues to fund state services, including previously-promised retirement benefits.

“Unfortunately, the current priorities in Salem – under this governor and legislative leaders – are focused far more on placing new burdens on employers than making it easier for them to invest, expand and hire.

“Our challenge is simple: We need to grow the size of economy if we want to maintain and improve both the level and quality of government services we need as a state,” Buehler concluded