BEND, OR -- Oregon’s Supreme Court struck down some of the cuts made to the Public Employees Retirement System Thursday, creating holes in the budgets of every public agency in the state. The reforms were approved as part of the 2013 “Grand Bargain” when lawmakers tried to funnel more money to school budgets during the recession.
Bend-La Pine Schools Superintendent Ron Wilkinson tells KBND News he was anxiously awaiting the court's decision, but hoped it would go the other way. "We’re disappointed with their decision, but we’ve always known there was a possibility they would rule to reject part of the reform. We knew we couldn’t anticipate what that would mean, so we’ve been progressing with our budget formulation using the rates given to us by PERS, realizing that there’s a time in the future we’ll have to make some adjustments to deal with that."
Wilkinson says it’s too early to tell just how much – and when – it will impact the district’s budget. "The actual rates we pay for PERS are set by the PERS board, and they’ve already set the rates for the 2015-17 biennium," he says. "Unless they chose to come back together and change those rates, we expect those rates to remain the same for this biennium and the adjustments would be made at the beginning of the 2017-19 biennium." Although, Wilkinson says there is precedent to change the contribution rate mid-biennium.
With the budget turmoil, Wilkinson isn't blaming public employees. "I get upset when I hear people blaming the PERS employees, as somehow they’re responsible for this mess. They’re not the ones who set the system up. They came to work; they were told ‘here’s the system you’re part of.’ And they’ve done their part and they’ve performed well over the years. So I work hard to make sure it isn’t pitting one against the other, in that regard." Wilkinson adds, "The bottom line is that we have a system that’s out of balance and the real effort of the legislature is to bring it back in balance so it, by itself, doesn’t become the cost-breaking that makes it so that class sizes have to go up and we’re not able to do the same job in educating kids as we’d like to do." On Friday, the state Legislative Fical Office released an estimation of the impact on public schools. Its report shows the ruling could cost K-12 schools as much as $358 million in the 2017-19 biennium.
In Redmond, Superintendent Mike McIntosh issued the following statement:
"The Redmond School District is disappointed that the Supreme Court did not uphold the constitutionality of the 2013 legislature’s reforms to PERS. This decision will have no impact on the proposed 2015-16 budget that we presented to our Budget Committee last evening, April 29, 2015. The employer rates have been set for the 2015-2017 biennium and, as we understand, are not subject to change until July 1, 2017. At this point in time, we do not know what the impact of the Court’s decision will be on future rates. What we do know is that those future rates will be higher than they otherwise would have been if all, and not just some, of the reforms were upheld. The District’s proposed 2015-16 budget includes a $1.4 million reserve for PERS increases which we intend to maintain for the next two fiscal years. When we understand more clearly the future PERS rate increases, we will propose how to utilize that reserve to mitigate any negative impact rate increases may have on our educational staffing and programming."