Kitzhaber pushes pension cuts in proposed budget
SALEM, Ore. (AP) - Gov. John Kitzhaber will propose an increase in funding for Oregon schools, but the money wouldn't be enough to cover rising costs.
Kitzhaber is scheduled to release his budget proposal on Friday. A summary released by his office on Thursday says he'll recommend $6.15 billion in K-12 school funding over the next two years. That's an increase over current funding, but it's not enough to maintain the current level of service in schools.
To bridge the gap, Kitzhaber hopes lawmakers will cut benefits for retired public employees.
Kitzhaber's budget also assumes that the Legislature will change criminal sentencing laws to leave the prison population virtually flat over the next decade.
Copyright 2012 The Associated Press.
Start by cutting his pension and benefits! Cut all of the special benefits that the legislators have given themselves! This is just another effort to take from those that have earned it so he can give to those that haven't earned anything.
kitzhaber did this last time he was govenor, ,he almost broke the state with his wild idea,s.  the people of Oregon screwed up electing him again,,it,s time for the old recall. how much will he get after he retires? a bunch ,i,m betting
It is not right to cut the benefits of those already retired. Those benefits were an agreement made to those working prior to their retirement. State government needs to live by it's contracts, agreements, and promises. If you are going to make pension changes, create a new tier for new public employees. Also, reduce the guaranteed returns from investments from 8% to a more realistic level of 5% to 6%. The majority of public employee retirees' income is not exorbitant.
How about we cap the multi-million dollar salaries of football coaches and only allow the first $100,000 go towards their retirement benefit. That might be part of the solution.
To all you naysayers, let me say that everyone, I MEAN EVERYONE, lives off of other peoples' money. If you a private sector worker, who pays your salary. The people who allow the company to make money by buying their products some of whom just might be state workers and teachers. And how to you think you get your car and health insurance rates and the money they pay out when you get into an accident or get ill. All those other people who put their money into the pool to subsidize other peoples' benefits. Think you've paid or will have paid enough money into Social Security and Medicare to take care of retirement. No, you live off the earnings of those still in the work force. So get off your high horse and realize that everyone gets benefits from everyone unless perhaps you live in a log cabin in the wilderness and hunt and fish for your food, don't have plumbing and electricity, and don't ask for fire and police protection and die when you can nolonger survive on your own.Â
This measure may have it's merits. There are a great number of PERPs getting 6 figure retirement incomes. It's not right that someone who retired making $50,000 is now getting $180,000. This kind of gross bargaining incompetence from the state and greed from the Unions has to be ended. Also, the 8% annual increase is just outrageous and out of touch with the common layman who, at best, may get 3 to 4% annual increase. This retirement money comes, for the most part, from the taxpayers. The PERPs have no right to glut off the slavery of Oregon's hard workers. There is good change that needs to take place now. In the long run, more PERPs will enjoy some retirement benefit.
 @None Source, please?
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@None Where on earth did you find someone who made $50,000 a year retiring on $180,000. Even in its boom years, PERS retirees only retired on a little over 100$ of their salary - not over 300% as you claim. And even then, some like myself, have to pay back $17,000 for PERS accounting mistakes. Also, state workers pay taxes as well. So to imply that state workers eat at the trough of every tax payer but themselves is erroneous and insulting. I agree there must be some changes to PERS but grossly mistating facts and making insulting accusations doesn't help.
Absolutely, cut benefits for public employees who are already retired. After all, what can they do about it? It was only a contract on behalf of the citizens of Oregon and we know they don't give a flying %$#% for those who spent years serving them.
 @Nobody Paying for an honest days work is one thing. Balancing the retirement benefits of government employees on the broken backs of the rest of the private sector is another thing entirely. We (the private sector) were not invited nor were we involved in any decisions during the shady back room deals made by democrat politicians and big union bosses for these gold plated retirement plans (PERS).  Â
@last boyscout @Nobody You were invited in the form of elections where the majority could have voted in Republican governors and representatives. But you weren't able to accomplish this so quit whining.Â
 @Playanekes Too suggest that the earth in it's long long long history of existence hasn't both frozen and warmed beyond human compatibility would be foolish. To suggest that American's by driving Chevrolet's and Fords can cause either extreme (by human standards) to happen is beyond imagination. You shouldn't let your religion (ecology as faith) get in the way of reality.
@last boyscout @peckishpete gotta give him that. The view from the clock tower is that the left wing spent eight years warning us that Bush was going to suspend the Constitution and cancel the 2008 election. Fact. But, that doesn't negate the royal screwing we get by big international oil (Saudi? come on!) or the preponderance of evidence for global warming, man made or not. You shouldn't let your politics get in the way of science.
 @peckishpete The instant liberals quit whining about: global warming, the rich, big oil etc....You guy's quit, and I'll do the same. I remember 8 long years of 'Bush sucks' by your side, so, get over it.
This won't fix anything. The Oregon Supreme Court has said (a number of times) that you can't change the benefits of those already retired. This is incredibly stupid. The retired Tier 1 people in PERS will sue, and win.
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Kitzhaber is such an idiot.
 @Derek2mk The supreme court decision DID say that there were elements of existing retiree's benefits that were not a contractual obligation. There is room to move, but not much.
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Simple solution: terminate the $3.9 Billion in Corporate Welfare in the current budget.
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Oh wait . . . the private sector insists that it needs those bribes to stay solvent.
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Anyone who complains about the government trough while holding the Private Sector up as a panacea is very delusional.
 @ShallowEnder Great idea, but you know perfectly well that democrats will NEVER agree to cut their pet subsidies to: Big Abortion (Planed Parenthood), Big Solar, Big Wind, OPB, PBS, Global Warming Grants etc...etc...You know they won't cut those programs, ever.Â
 @last boyscout  @ShallowEnder >'You know they won't cut those programs, ever. '
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When the well runs dry, nobody will get any water.Â
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The USPS is going to be (In my guess) the next fatality of union-inspired pension programs. Eventually, without a sizable influx of taxpayer money, the money that the federal government has to keep subsidizing them with is going to end up on the chopping block.
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The end result will be a massive downsizing of the organization as a whole. Be it 3 day a week delivery, or contracting out services, there will be serious layoffs. This will result in even less money being paid (by employees) into the pension programs, which will mean even more taxpayer money needed to sustain it.... repeat ad nauseam until insolvency.
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Once that happens, the unions will scream like pigs dragged to the slaughterhouse, and it will end up in court to decide if taxpayers have to fund the program. If history is any example, we will. The USPS will be dissolved (or privatized), and the pension program is all that will remain under US funding.Â
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Now, the one UP side I see to this theorhetical is that the new Obamacare program will probably be what the USPS pensioniers will end up on.Â
 @last boyscout I happen to agree generally with your statement, but those amount to a very small portion of the $3.9 Billion.
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OPB no longer gets subsidies from the state, although they contract to provide Emergency Notification services in many counties (such contracts can be viewed as a subsidy, but that's a fringe thing as we are talking about thousands of dollars, not millions.)
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I know you're a private sector business man (as am I), so you should be in arms about the tax credits that get handed out to big business while small business gets nothing. Intel and Nike and their exemptions/deductions/subsidies are good examples. when did you hear about a mom and bob print shop getting a special tax break from the state?
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I have done a lot of business with the state, but I no longer contract with Oregon since a current legislator actually threatened me because an audit didn't find what he expected it to. I built my business on integrity, and I won't allow myself or my employees to be manipulated and abused by partisan pukes (left and right) to find what they "expect".
 @last boyscout  @Playanekes Most retirees on PERS do not get an exorbitant retirement. Most retirees on PERS are not in management positions, but are in positions receiving an average wage.
 @ShallowEnder  @last boyscout > Intel and Nike and their exemptions/deductions/subsidies are good examples.'
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In FY 2008, Intel had roughly 16,000 employees, with an annual payroll of about 1.8 billion. Furthermore, it is estimated that the company (in Oregon) has spent almost 9 billion dollars on infrastructure, construction and facilities improvements. 90% of that money is spent with local contractors.
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Above and beyond that impact, it is arguable (I would go so far as to say it is a hard fact) that the majority of growth in Hillsboro (Orenco Station) has been directly tied to the Intel campus. Without those tax incentives, they would have ended up somewhere else.Â
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No, I'm sorry, Hillsboro and Oregons decisions regarding Intel tax incentives were sound decisions.Â
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Now, Nike is a whole other can of worms. Phil Knight is protected on high by his buddies on the Beaverton city council, and his fellow Duck fans in the Oregon legislature. Â
 @Playanekes I have family in the military, and I put them miles above any, any state worker not directly involved in law enforcement, medical or firefighters. No PERS employee should get a penny more than any military retiree having spent the same number of years in the employ of the government.
 @Playanekes  @last  @ShallowEnder Play, why do you feel it's necessary to call people names and hurl insults in order to make a counterpoint?
@last boyscout @ShallowEnder we have state and government employees deployed in Afghanistan and Iraq, or rescuing hikers, people trapped in their homes, crime victims. My wife works for the state and votes conservatives. Maybe the fact is that jack-wagons like you who make blanket assumptions about people you don't even know are why so many people have utter contempt for the right wing these days. I sure as hell won't vote for people who make generalizations as lame, insensitive, ignorant and false as yours.
 @ShallowEnder So as long as 'Jersey Shore' remains popular among the voting age, we're eff'd. Just look at what sells on TV, there is no chance of electing a viable candidate. Again, with the mentality and self indulgence of the average voter, we are screwed.Â
 @last boyscout I personally think that your argument is ignoring a reality. People vote their self interest, that's the American way. What we need is a moderate who makes a convincing case that the self-interest of those masses is actually common ground. And I really believe it is. You just have to get people thinking medium to long term. And it can be done (Jesse Ventura is an example. Elected despite ridicule from left and right and most of the media, He left office voluntarily with rockstar approval ratings of over 75% while cutting Minnesota government by 10% in both expenditures and headcount).
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The media, which thrives on hard conflict, wants the polarity, partisanship, and sound byte sloganeering to continue. It's cheaper for them to cover (Read News corp's estimate of costs if as real third party ever arose in the US), and it gets better ratings to put a Tea Party doofus on the screen against a mega-liberal nimnul.
 @ShallowEnder So with so many voters living off the government teat, how can we ever expect to elect someone with the integrity and baIIs to make the deep cuts necessary? Every welfare recipient, every union member,every state and government employee will vote against such a candidate.Â
 @ShallowEnder I am a strong proponent of tax reform, and I submit that a large component of that reform is going to have to be a close look @ tax subsidies to coorporations. A couple of thoughts, though...
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>'Anyone who complains about the government trough while holding the Private Sector up as a panacea is very delusional.'
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I'm curious if your definition of 'private sector' includes things like photovoltaic cell manufacturing, bio-diesel production & wind farm subsidies? All 3 of those 'private sector' businesses are HEAVILY (obscenely, disproportionately) subsidized. Both at a federal and state level. I would assume that it simply has to, since your statement;
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>'the private sector insists that it needs those bribes to stay solvent.'
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is most accurate in all three of those 'private sector' business models.
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Secondly, there is simply NO way around the reality that government sponsored pension models (read:PERS), specifically tier 1 PERS is unsustainable. The program is bleeding the Oregon (as well as many different comparably structured public and private union-inspired pension models) to death.
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The typical talking points immediately come back to comments about executive bonus and/or pension programs. Many of which are valid points. BUT.... Not a single one of them change (distract, perhaps, but they certainly don't change the facts) the reality that some people are going to have to get over the entitlement idealism and accept some serious pension reforms if the state of Oregon, and many different federal agencies (USPS, for example) are going to survive.
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With some CA municipalities as examples, the grim reality is that the other option may very well come down to a decision for PERS pension recipiants between 'some' or 'none'. Â
 @MarkKpic Additional thought: any subsidy to a private company is, to me, is irrational. The policy goal is irrelevant. If "Green" energy is so important, create a public entity corporation and fund it.
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i don't see the logic of a subsidy for "job creation" that pays more then $20,000 PER JOB to create jobs paying $25-$50K. That's the "public trough" in action.
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 @ShallowEnder And this is one area that we are 100% in agreement on.Â
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While some subsidies may be called for in specific instances (Intel in Hillsboro, for example), more often than not they are simply examples of 'pet' projects of government.Â
 @MarkKpic Properly invested and fully funded pension are sustainable. I know because I have one for my employees. Conservative investments (bonds at fixed interest) and full funding are the key. I didn't hear lot of doom and gloom when they cut the required contributions from public entities in half in 2005 or in 2006 when the system was reported 108% funded. (Imagine the situation if Dennis Richardson (R-Roseburg) had gotten his way and that 8% "overage" had been "returned" to taxpayers!!)
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PERS is way too deep in equities (hence the massive hit in the crash), and the eight percent guarantee to tier one is a problem in any down market.
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I think the situation can be remedied, but it will take time. And the issue of contractual obligation can't be overstressed. I think a cap on future payouts of $7500 a month is in order. (Belloti's windfall nauseates me.)
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Note that the hires since 2003 are not in PERS, but in a glorified 401K scheme. They're the ones who will be left holding the bag someday.
 @ShallowEnder >'Properly invested and fully funded pension are sustainable.'
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That's a dramatic overgeneralization. While there are some that may be sustainable, Tier I (and, IMO, tier 2) are not examples of such an entity. They are only 'sustainable' because of the liability incurred by OR taxpayers every time the guaranteed growth (an absolutely unheard of in the private sector) of the fund for those specific tiers.
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>'Conservative investments (bonds at fixed interest) and full funding are the key. '
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You can end run around it any way you'd like, the reality is that ANY 100% guaranteed rate of return on a mutual investment portfolio is something that simply does not exist in the private sector. That is where union-inspired programs bankrupt the host organizations. It is what doomed GM, it is putting the USPS on the verge of insolvency, and it is what will be the downfall of PERS. Which, unfortunately for the 90% of taxpayers who are not PERS bennificaries, will cause the financial implosion of Oregons state Government.Â
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>'I think the situation can be remedied, but it will take time. And the issue of contractual obligation can't be overstressed.'
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Which is a polite way of saying, irrelevent if it forces the shutdown of 10% of state services, and the termination of tens of thousands of state employees, don't even try to touch our pensions. It's one of the few times that I am inclined to agree with the GOP montra about entitlement mentality being the biggest budgetary problem with government budgets.Â
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>'I think a cap on future payouts of $7500 a month is in order.'
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..and I think that ALL employers (private OR public) have no business in pension or retirement programs. Farm it out to a private financial firm.Â
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>'Note that the hires since 2003 are not in PERS, but in a glorified 401K scheme.'
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As (IMO) they should be.Â
So..... Not only does the Governor believe that the Oregon Constitution and voter approved judicial penalties system are invalid (when opposed to his 'personal beliefs'), he also writes state budgets with fantasies as cornerstones?
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I simply cannot wait to see who the OR GOP runs against this guy in '14. As unbelieveably bad as he has been, the 'D' next to his name gives him the PMA. Unless the GOP candidate can make significant inroads into rural/urban border counties, Gov Kitzhaber will end up getting reelected because of union-sponsored party line voting habits of public employees. Multnomah Co is a wash. There's too many zombies to cull the herd.
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Just a suggestion for the OR GOP candidates, start in Washington & Clackamas Counties NOW. Perhaps, just perhaps, with a 2 year head start, you will be able to pull enough votes away from the urban status quo to unseat this clown. Â
I'm enjoying this. I really am. I'm enjoying watching Liberalism fail and with it go's union greed and the whole PERS scam. It's finally come to a point where the rest of us in the private sector that have been supporting all of you on our backs for decades are out of cash. I'd say time to go get a real job, but there are none to be found.
@last boyscout After this election,the results didn't point to a faliure of liberalism.Liberals from the President on down.
 @noneofyourbizzness  @last He was referring to how liberalism and its policies goes against common sense and much like socialism against human nature.
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It sets up an environment where those who want to be lazy can and will and those who work hard to make a better life for themselves get penalized for it.
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When it gets so out of balance like it is now then the system starts to fall apart which it is.
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Look at every liberal state in the country and you see complete financial failure in the works. Most are because they promised outrageous benefits to government workers that we not funded over time. So now every city and state is paying for 2+ work forces and as costs go up the only option is to cut the current work force since they have a legal contract with the retired ones.
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Or like many cities (6 now) in California you go bankrupt and hope the courts let you out of your legal contracts...
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Both sides but especially the dems have done great job of really really F#$#ing up our country for their children and grand children.
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Sadly Obama is now wasting all his time on taxing the rich which solves about 7% of the federal spending problems just like Obamacare which helped only about 15% of the people and hurts everyone else.
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So once again the liberals rather then solving the hard problems go after the small issues like taxing the rich to make the sheeple feel good even though it does nothing to solve the problem. It will however likely keep them in office since the sheeple appear to not be smart enough to see what they are doing...
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Tina Kotek and others have already signaled nothing substantive will occur with PERS. Kitzhaber still wants to heavily subsidize solar, biofuels, and other alternative forms of energy that are not financially viable on their own. Schools always want more money but they have not addressed the real problems which are: poor performance, lack of parental responsibility, and elimination of waste.  And Kitzhaber is ducking the real question on prisons: Why do Oregon's prisons cost 50% above the national average per inmate?Â
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Maybe if Kitzhaber wants a budget that works he should first get his prioities straight and get a government that works.
Wooohoooo.
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I have to wonder who the unions are going to blame. Bush? That is so last decade. The Republicans? They have not had any power in this state for decades.
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I guess they will have to blame the Democrats since they were the ones in charge all these years.
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I can only hope this continues for years. Cutting off the money supply is the only way to force government to cut back.
 @RalphCramden Did you sleep through 1994-2006 when the Republicans ran the legislature? Last time I checked, that was the group that actually passes the laws and passes the budget.
 @ShallowEnderÂ
You need to do some research before you post. The Democrats have controlled the legislature in Oregon for decades. Every now and then the Republicans gain control of one house or the other but Oregon is a very blue state.
 @RalphCramden Nah, the democrats will never accept responsibility.
A good read about how salaries, retirement benefits and unions bankrupted a cityHow a vicious circle of self-interest sank a California cityhttp://www.reuters.com/article/2012/11/13/us-bernardino-bankrupt-idUSBRE8AC0HP20121113
 @NGerblanskyÂ
One can only hope that these so called "heros" find themselves out of any pension money as the city dissolves into chaos.
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Hopefully California goes down with them as more and more California cities collapse under the weight of PERS and the state has to take over.
@RalphCramden @NGerblansky If you want to know where Oregon is headed, just look at California. We are just about a decade behind. California's property tax limitation (Prop 13) was passed about a decade before Oregon's Measure 5 and then Measure 50 came later. California cities and counties started spinning off special districts to unburden themselves while keeping their revenues. The special districts formed included new tax bases so the only loser in the short-term was the taxpayer. Then both cities and districts started pressuring the state for more revenue sharing.  Then an economic downturn severely reduced state revenues along with local government revenues. Californians started raising taxes and a few cities who are deep in debt filed for bankruptcy. Meanwhile, no one has any proposals that even begin to address the fundamental structural problems of government and taxation.Â
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Sound familiar?Â
 @I812    @NGerblanskyÂ
I look forward to the financial failure of California. It will prove that socialism, high taxes, and over regulation don't work.
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They will take down the rest of the US when they do go but then we can get back to basics and start all over.
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The scary part is what the US will look like post financial collapse. For that reason I am well prepared to go it alone.
Where's all the people that claimed it was a "conspiracy theory" that the government was coming after pensions?
 @Jamie The amusing thing is... the state workers helped vote this retread back in over a polysci and econ major.