Wheeler, Buehler are best suited to promote realistic changes to PERS
September 26, 2012
The Daily Courier’s endorsements for two top state spots in November go to a duo we feel can publicize and promote realistic changes in the overly generous Public Employees Retirement System.
Knute Buehler, a Republican and Bend orthopedic surgeon, wants to use the office of secretary of state to call attention to the burden PERS puts on cities, school districts and others.
Treasurer Ted Wheeler, a Democrat running for re-election, has already recommended common sense changes to reduce PERS costs. The most obvious one is to cut payments to some retirees who live out of state. They are being compensated for Oregon taxes, yet don’t pay them.
Ballots for the November, mail-in election will go out in mid-October.
Pension costs are a big, important issue in almost every state. Stock market losses in recent years, particularly 2008, have turned them into a crisis in states such as Oregon that guarantee a certain level of benefits. This forces taxpayers to pay more into pension funds to offset losses suffered by retirement accounts.
The Wall Street Journal stated in its weekend edition that the states still have a $900 billion gap between assets and obligations. This is despite the fact most states have reduced benefits and/or raised contribution requirements for employees since 2009.
Despite its importance in Oregon, PERS and its impact aren’t publicized, much less handled, on the state level these days. Buehler, using his audit function, intends to shed light on PERS’ impact on the hundreds of public employers across the state.
Kate Brown, his opponent and the incumbent, hasn’t done this and isn’t likely to give the issue the attention it deserves. That’s because public employee unions have traditionally been big financial supporters of hers. Buehler’s campaign also points out Brown, then a legislator, voted against what PERS reforms the state did enact, in 2003.
Wheeler’s proposal that the state take away money for Oregon taxes out-of-state retirees don’t pay would save about $35 million a year. Wheeler has proposed other changes, too, including capping the annual cost-of-living increases granted to retirees as a portion of their income. Wheeler has also implemented rules to cut down on the wining and dining of investment officers in his office by corporations and others looking for investment by the state.
Wheeler’s opponent, Tom Cox, is a Portland management consultant who ran for governor as a Libertarian in 2002. Republicans ran a successful write-in campaign for him in the May primary when no Republicans filed.
Cox, too, is interested in reforming PERS, but his plan isn’t realistic, at least not at this time. He wants to turn it into a defined contribution program that pays out only what its investments earn. That would, essentially, turn PERS into a 401(k), like most in the private sector have. That could greatly reduce costs, but would have to pass a Legislature filled with PERS recipients who haven’t shown much desire to reform PERS. Besides, even if passed, it would likely apply only to new hires.
Our picks to handle PERS: Wheeler for treasurer and Buehler for secretary of state.