When it comes to advocating for their children’s schools, Oregon families are a force of nature. They organize bake sales, car washes and auctions for a fundraising cycle that never ends. They give up national holidays to rally at the state Capitol for more education dollars. And from local school board meetings to legislative hearings, they testify about overcrowded classrooms, understaffed libraries and bottom-tier graduation rates that show just how poorly Oregon is serving its students.
Their effort and energy may finally pay off. Lawmakers and business interests are studying corporate tax proposals to raise as much as $2 billion more per budget cycle to buy Oregon students a longer school year, more mental health counselors, special education instructors and other investments. With tax-friendly Democratic supermajorities in the Legislature, education advocates are hopeful that such an infusion of cash could finally help Oregon’s schools turn the corner on mediocrity.
But if they want such investments to stick, parents should consider focusing their advocacy work on the spending side of the equation — particularly, the need for reforms to the Public Employees Retirement System. With a $27 billion unfunded liability in the PERS fund, public employers face steep increases in how much they will have to contribute for the next several budget cycles.
And even $2 billion in new money on top of record revenue in Oregon’s red-hot economy won’t be enough to save school districts from the massive public pension debt crushing them and other public employers.
In fact, in the 2019-2021 budget cycle, schools’ required pension contributions will claim a quarter of the new revenue that the Legislature is looking to dedicate, The Oregonian/OregonLive’s Mike Rogoway reported. By 2023, that goes up to 40 percent — and will continue to rise through the decade if the state fails to adopt significant steps to reform the system and curb employers’ contributions. That doesn’t even factor in the PERS costs for higher education institutions, state agencies or other public employers which will be taking a heavy toll on those budgets as well.
And while Gov. Kate Brown is searching for a way to protect those new dollars from being sucked up by the pension debt, she’s yet to unveil any viable plan that achieves that.
So much for the grand vision of what Oregon schools can be.
Broaching pension reform is no easy task when the most promising solutions require cutting future benefits for teachers and other public employees. And certainly, the governor and legislative leaders, who are expected to lead in crises of this magnitude, have shown little appetite to seek those changes from public employee unions, who rank among their largest and most loyal donors.
But that’s why education advocates, PTAs and families whose primary concern is students — not donors — must take up the mantle, sort fact from fiction and push for change. They should resist the simplistic falsehood that being pro PERS reform is the same as being anti-teacher. They should recognize that the promise of additional revenue means little when only pennies on the dollar will make it into the classroom. And they should recognize that the only way out of Oregon’s pension mess is for everyone — businesses, taxpayers and public employees — to share in the pain so that students, low-income Oregonians and the state’s most vulnerable can be protected as much as possible.
It’s worth clarifying a few common misconceptions many have about PERS. Fact: While Oregon must honor promises made to employees and retirees for work they’ve already completed, they can change benefit levels for work going forward, as both the Oregon Supreme Court and legislative lawyers have made clear. That leaves a lot of possibilities for legislators to make changes, including a slate of reforms offered by advocates.
Fact: While newer employees receive a more modest retirement package than earlier employees, they still receive a generous retirement package that includes both a guaranteed monthly pension as well as a 401 (k) type plan. That’s a combination that only 13 percent of employees in the private sector get, according to the Bureau of Labor Statistics. Rather, private-sector workers typically get only a 401 (k).
Fact: Oregon teachers and other public employees do not contribute their own money to the pension fund — unlike public employees in other states. While many employees pay 6 percent of their salary to their 401(k)-type account, that does not go to the pension fund. That’s a key distinction. One proposal pushed by PERS reform advocates would redirect that 6 percent into the pension fund — easing the contribution that employers have to make and leaving more dollars for the services and programs that Oregonians and Oregon students deserve.
Fact: As required PERS contributions increase — taking an additional $10 billion of tax money over current levels from public employers’ budgets over the next eight years — school districts will have little choice but to cut school days, lay off teachers and other staff or a combination of both. While newer employees can rightfully say they aren’t the cause of the unfunded liability, no one will escape the fallout of decades’ worth of poor policymaking. Even if teachers successfully resist any retirement changes, they will be paying for it in the form of layoffs, larger class sizes or less support staff.
Portland Public Schools families are already seeing what runaway PERS and other costs mean for schools. Despite expecting $35 million more than it received this year, the district announced it is facing a shortfall for the coming year. The plan? Dip into reserves, cut school days, reallocate teachers and increase class sizes, as The Oregonian/OregonLive’s Eder Campuzano reported.
Predictably, the news shifted parents’ fundraising efforts into hyperdrive as school communities — or at least those who can afford to — attempt to drum up the cash to ward off staffing changes. But this fractured approach to funding education is neither sustainable nor fair to communities that lack the resources of higher-income neighborhoods.
Those are the schools that most need lawmakers to come through with both new revenue and a PERS fix that keeps those investments secure. Families should do what they do best and work together for that common goal.