11/12/2009: Jack Bogdanski, a tax lawyer at Lewis and Clark, has somehow obtained a copy of a draft report by former Secretary of State Phil Keisling on PERS. It’s a disaster. Employers are going to have to double, perhaps triple their contributions to the fund. Taxpayers may be hit up for additional revenue beyond that. UO’s cost per employee will soar:
By 2013-15, what one observers calls Oregon’s pending “PERS Tsunami” could literally “wash away” more than $2 billion in taxpayer funds that today are being used to provide actual government services – e.g. K-12 teachers and college professors, health care and early childhood education, building roads and repairing aging infrastructure, etc.
It’s not a good read.
10/24/2009: Ted Sickinger at the Oregonian does a lot of good reporting on PERS. I’m no economist, but a lot of strange things seem to be going on with their investment strategy – they have a politically appointed board which can and does overrule the staff about investment decisions. And when that board’s investment consultant starts making careful analytic justifications for investments like “I think (the CEO) has ice water running in his veins” you don’t need to understand Black-Scholes to think maybe they are just doubling down on a loss, with other people’s money. And of course there has been the slew of longtime legislators that Kulongoski has appointed to short term admin jobs to jack up their retirement payouts, and the similar shenanigans at UO with John Moseley, Lorraine Davis, et al. Those payouts have to some from somewhere. In this article Sickinger writes that state agencies may need to increase their contributions by 50% in the next few years to keep the fund solvent. This will add about 10% to UO labor costs. There goes Lariviere’s proposal to raise faculty salary’s to somewhere above 81% of Missouri – though we’re guessing Provost Bean will somehow find the money to give the senior administrators another round of hidden raises.