Up Sucker Creek

Up Sucker Creek
Photo Courtesy of the Lake Oswego Library

Wednesday, September 21, 2016

Pretend Everything's Really Swell

But Oh My, Beware!

The City has a time bomb ticking.  Public Employee Retirement System costs are growing.  According to The Oregonian, disaster isn't in the future, it is now.

Which candidates for mayor and city council are willing to face this issue head on instead of hiding from reality with feel-good propaganda, or concerned but not too worried reassurances.  Why doesn't the City Manager educate the Council about the impending costs and what they will do to the budget?

Does Employee Unions' support have anything to do with it?  I'm open to other suggestions here.

The Oregonian, September 21, 2016. By Ted Sickinger 
'This is becoming a moral issue':  Officials face truth behind Oregon's soaring pension costs

The numbers are bleak. Oregon's pension system owes billions of dollars more to retirees than it has, and the last major attempt to fix the problem was shot down in courts.

This month, cities, school districts and others will find out how much more they'll pay to help prop up the system. Higher pension costs could come at the expense of funding for other needs, including social services, infrastructure investments and education programs.

Experts openly acknowledged they're understating the magnitude of Oregon's problemThey're relying on optimistic assumptions about investment returns. And they're holding down required pension payments below what's needed to keep pace with the debt, to avoid eviscerating school and government budgets across Oregon.

"We're beyond crisis," Katy Durant, chair of the Oregon Investment Council, said in an interview after last week's meeting. "We should have been addressing this 20 years ago and it's just been building. It's a little bit like a Ponzi scheme. Sooner or later it's going to catch up with you."

"This problem is not going away," said John Thomas, a Eugene benefits consultant who chairs the pension system's board. "It is what it is. The math is the math...It's getting to a point now that it's difficult for people to accept what these numbers are."   

As it stands, pension payments cost government agencies and school districts across the state about $2 billion every two years, and they're panicking about the $885 million, or 44 percent jump, in required payments over the next two years.

That's just next biennium," PERS Director Steve Rodeman, said at the meeting. "There's going to be one just like that in the next biennium and very similar to that, under almost any scenario, in the one after that." 

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