A Message from Executive Director Tim Nesbitt on the passage of Senate Bill 1049

The passage of SB 1049 will take some of the burden of crushing PERS costs off of students in our classrooms and all Oregonians who depend on and pay for public services. That is why we were pleased to see its enactment by the legislature and look forward to its signing by the Governor.

We were gratified to see lawmakers, at long last, recognize the toll that rising PERS costs will take on staffing for services at all levels of government in Oregon. SB 1049 responds to that challenge with a modest course correction for a system whose costs are on a steep and unaffordable trajectory. In that regard, passage of the bill was an important first step toward more responsible management of the system’s costs and benefits.

Also, contrary to the statements of some opponents, SB 1049 was not a vote to break promises to public employees. Rather, it was a vote that affirms and protects all retirement benefits earned to date and will help to sustain the PERS pension program for the future. SB 1049’s reforms follow the model that most states and many private sector unions have implemented to protect pension benefits during the past decade. For these reasons, we are confident that its reforms will be upheld if challenged in the courts.

We remain concerned, however, that the modest cost-sharing formulas of SB 1049, though important in principle, may be insufficient in practice to control future costs, especially with the extension of the period to pay off the system’s liabilities. For that reason, we will be watching closely how the reforms contained in SB 1049 play out over the next few years and how PERS costs can be better managed to sustain services for Oregonians.