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PERS reform essential to moving the other legislative pieces this session

The 2017 session of the Legislature has just begun and lawmakers are already behind schedule.

Don't think so? Then you haven't spent an hour, as we did last week, with Senate President Peter Courtney, who already is warning his colleagues that they shouldn't make any plans for Disneyland until well after the Legislature's scheduled adjournment in early July. He thinks they could be there much longer.Feb. 1 editorial

Courtney's public pessimism may be a strategic move to create a sense of urgency among his fellow lawmakers. If so, we hope it works.

There are four big issues facing lawmakers as they stare at a $1.8 billion shortfall in the 2017-2018 biennial budget:

• Analyzing potential budget cuts.

• Financing a long-deferred transportation package

• Reviewing possible savings in the Public Employees Retirement System

• Crafting and passing a plan to raise revenue (that includes taxes).

Finding agreement on any of the four will be tough. But the job is made even more difficult because they are all linked.

The good news is that Courtney and House Speaker Tina Kotek wisely instructed the chairpersons of the joint budget-writing committee to identify what the state spending plan would look like without new revenue.

It's not a pretty sight. Cuts hit education, public safety and health care programs.

That got everyone's attention in Salem and showed lawmakers what will happen if they don't come up with more money.

And that's where the bad news comes in.

Revenue measures must start in the Oregon House and it appears the session will start without a House bill drafted to do that. There's not even agreement on what elements would be in such a bill. In fact, the two groups that must agree on any meaningful plan — business and labor — had not, as of this week, even been in the same room to discuss the topic.

That's not Courtney or Kotek's fault.

Gov. Kate Brown has all but disappeared from this discussion, already eyeing a 2018 re-election campaign where she'll need support from the labor unions who will be asking for big tax hikes on business.

That leaves Kotek and Courtney to do the hard work.

Both met with our editorial board last week and while neither asked us our advice, we're offering it anyway:

Kotek needs to allow a legislator in the other chamber, Sen. Mark Hass, to run the revenue show this session. The Beaverton Democrat has been working this issue for a couple years and has the respect of both Republicans, as well as business and labor.

Any successful budget deal must include some controls on state expenses. But we have repeatedly said the state does need more revenue. While we were outspoken in our criticism of the corporate sales tax proposal voters rejected in November — we also made it clear that businesses will have to ante up. Hass is best-positioned to find middle ground.

Courtney, meanwhile, needs to swallow his pride and let state Sens. Betsy Johnson (D-Scappoose) and Tim Knopp (R-Bend) fully explore PERS reform options. He and Kotek, like Brown, are not eager to incur the wrath of the public employees unions. But there is clearly an opening to roll back benefits for future employees and potentially some wiggle room to reducing the cost of making good on the promises made to current employees.

PERS reform is essential to moving the other legislative pieces this session. If nothing is done, ballooning retirement payouts will continue to eat up even larger shares of the discretionary money needed to fund schools and social services.

Sure, Johnson and Knopf did an end run around Courtney by holding some initial hearings last fall outside the normal legislative process. He needs to get over it, empower them to fully explore the issue, and listen to their recommendations, even if he doesn't like them.

If Johnson and Knopf succeed, it will make it easier for Hass to turn to businesses and get them to pony up more tax money.

That, in turn, will reduce the need for budget cuts and also create some rare bipartisan momentum that will be needed to get a transportation package — and a balanced budget — passed without extending the session into August.

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