Pension Reform: Think State Employees Get Too Much in Washington? Look at Oregon

Rodney Tom, the Democrat who joined with Republicans to take over the state Senate, is pushing a bill that would scrap the state pension system for new and younger state employees, and replace it with a 401K plan. Labor groups roundly criticized the bill at a hearing on Monday. Jeff Johnson, executive director of the Washington Labor Council, called it "just another attack on the middle class."

But it's not hard to see where Tom is coming from when he talks about taxpayers "footing the bill" for a much more generous retirement plan than they'll ever get themselves. Washington taxpayers, however, might take a little comfort from looking at a new study coming out of Oregon.

Portland State University's Center for Public Service just came out with a draft summary of its findings from a study comparing state pension plans in Oregon, Idaho and Washington. The study looked at three common state jobs: teacher, accountant and police officer.

For teachers and accountants, the study found that Washington and Idaho employees contributed 2.5 to 3.5 times more money over the course of their career than their Oregon counterparts. Police officers in Washington and Idaho contributed even more--up to 4.5 times what officers in Oregon did. The less employees pay, of course, the more the state chips in, meaning taxpayers in Oregon are even more on the hook than Washington's.

The study is feeding into a debate already underway about possible reforms to Oregon's pension system. The Oregonian cited the findings in an editorial saying that to do nothing would "saddle future generations with the cost and consequences of a broken system." Oregon Gov. John Kitzhaber, a Democrat, has several reform proposals he is pushing and legislators have put forward more of their own.

The debate is already heated, and might get even more so. "If this gets ugly, if people try to make this into something about public employee bashing, I'm gone," Kitzhaber told The Oregonian. "I'm not going to do it."

Here in Washington, Tom is going out on a limb with his bill, of which he is the only sponsor. The testimony at Monday's hearing was largely negative. Tim Welch, public affairs director for the Washington Federation of State Employees, says that some of the speakers pointed to a salient fact about our state's plan: Unlike Oregon's, or the plans in a lot of other states, "our pension system is very healthy." We're not running a deficit; there is enough money to pay out future retirees.

All that is going to make it harder for Tom to get anywhere with his bill. But he's apparently got a strategy in mind. He told The Olympian that the bill may wind up as fodder for the horse trading that goes on in the final days of session. "I think it's an end game [situation] where there's going to be things they want and these are important things that we want. We'll have to see, you know, whether the trade makes sense for both parties," he said.

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