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State leaders mull imperfect solution for schools, PERS

Just about every interested party has found — or soon will discover — something to detest in a state budget plan that is making its way through the Legislature and that promises a substantial increase in school funding.

• Public employee unions already are scorning proposed changes to the Public Employees Retirement System, and are planning a legal challenge if these reforms are passed.

• School boards and administrators, on the other hand, are warning that the proposed PERS reforms fall far short of what’s needed to prevent them from having to cut school days or lay off teachers in the coming year.

• Meanwhile, business people and higher-income individuals are quite wary of the as-yet-undefined “revenue enhancements” that once again will target the same people who’ve been required to pay additional taxes in Oregon for the past several years.

The details of the budget plan, authored in part by Sen. Richard Devlin of Tualatin, have become less cloudy in the past two weeks — and as clarity has increased, so has the intensity of opposition to certain elements in the plan. From our viewpoint, however, any budget roadmap that has created so many enemies must have something going for it — namely balance.

A first step toward PERS reform

We agree with critics who think the proposed PERS reforms are too tepid. We also are concerned that Democrats who control the Legislature appear determined to raise taxes — once again — on business people. This state already has one of the highest tax rates on upper-income earners in the nation, and yet the Legislature feels compelled to return to the same well. Eventually, this fascination with taxing the “wealthy” will damage the economy as business people choose to live elsewhere.

Our concerns about this budget proposal, however, are tempered by reality. The PERS reforms proposed earlier by Gov. John Kitzhaber would have done more to slow the cost of a retirement program that is diverting too much money from schools and other services, but the governor’s plan isn’t likely to get support from his fellow Democrats in the Legislature.

The more pragmatic plan now being pushed by Devlin and other legislators would produce $455 million in PERS savings — as opposed to Kitzhaber’s $800 million. Both proposals include caps on cost-of-living increases for PERS retirees, but the legislative plan is more graduated.

Devlin also argues, with some persuasiveness, that his approach is more likely to withstand the unions’ legal challenges. Even if that proves to be untrue, the legislative plan is less risky, since it places a bit less emphasis on the state’s ability to prevail at the Oregon Supreme Court.

Imperfect, but realistic

On the positive side, the budget proposal developed by Devlin and Rep. Peter Buckley, who are co-chairs of the Joint Ways and Means Committee, would make important investments in local schools. At a funding level of $6.75 billion, K-12 schools would begin to recover from recent years of damaging cutbacks. The $6.75 billion number won’t cure all that ails schools. In the Beaverton School District, for example, the $6.75 billion funding level translates to an estimated $5 million in reductions for the 2013-14 school year, which could include further cuts to teaching positions and even larger class sizes.

The co-chairs’ budget is an imperfect solution to a complex problem. However, it does continue the work started in 2003 to rein in the growth of PERS, and it certainly leaves open the probability that such work will need to continue over the next two or three legislative sessions.

Critics of this budget — and particularly the PERS proposals — can complain about whether it goes too far or not far enough, but in the end the Legislature must do what is possible. We believe the co-chairs’ budget has the greatest chance of actually becoming law and establishing a funding floor for public schools while also protecting higher education, human services and public safety.

Legislators should press ahead with this budget outline, knowing that when everyone is dissatisfied, they must be getting closer to an equitable solution.



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