Hy·poc·ri·sy in action: Oregon Senate Committee approves appointments by Gov. Brown that will undermine PERS

PERScartoon

Oregon legislators of both parties, with some help from Gov. Kate Brown, took care of their own today (Nov 13) and set up a raid on an already burdened PERS in the process.

The Senate Committee on Rules and Appointments, meeting in a packed Hearing Room B at the State Capitol, approved Gov. Brown’s appointment of two state senators, Richard Devlin (D-Tualatin) and Ted Ferrioli (R-John Day), to high-paying positions on the Northwest Power and Conservation Council.

committeeHeAringSen. Devlin (L) and Sen. Ferrioli (R) appear before the Senate Committee on Rules and Appointments

The Council is a federally funded panel that provides policy and planning leadership on regional power, fish and wildlife issues. Though the Council is a regional body with representatives from four states (Oregon, Washington, Idaho, Montana), Oregon members are considered state employees and take advantage of state benefits, including PERS.

As members of the Legislature, Devlin and Ferrioli are each paid an annual salary of $24,216. At the committee meeting, Ferrioli acknowledged that his new job will be a “lucrative position”. As members of the Council, they will each make $120,000 a year.

Neither man noted that the appointments will also mean big retirement rewards.   Conveniently for Devlin and Ferrioli, they have each been appointed to three-year terms. Lifetime retirement benefits under PERS are designed to provide approximately 45 percent of a state employee’s final average salary at retirement. Final average salary is generally the average of the highest three consecutive years or 1/3 of total salary in the last 36 months of employment.

That means Devlin and Ferrioli will likely end up exploiting PERS for big payouts, potentially rewarding them with hundreds of thousands of extra dollars in benefits. This when PERS is already overwhelmed with billions of dollars in unfunded actuarial liabilities (UAL) and a task force appointed by Brown has just released a report outlining drastic measures that could be taken to partially address the problem.

johnmitchell2

Attorney General John Mitchell

“Watch what we do, not what we say,” President Nixon’s Attorney General, John Mitchell, told the press at the start of Nixon’s presidency in 1969.  Oregonians should do the same with the constant blathering of Gov. Brown and legislators about PERS’ deplorable financial condition and their determination to address the problem. Words, just words.

Just Say No! Stop Gov. Brown from helping former legislators cash in on PERS

GovBrownFastOne

What, me try to pull a fast one?

Oregon’s Senate Rules Committee needs to straighten up and fly right when it considers proposed appointments by Gov. Kate Brown one week from today.

Brown has nominated Sen. Richard Devlin (D-Tualatin) and Sen. Ted Ferrioli (R-John Day) to the Northwest Power & Conservation Council, a federally funded panel that provides policy and planning leadership on regional power, fish and wildlife issues.

The Senate Rules Committee is scheduled to consider the nominations on Nov. 13. It should just say no.

If the two men, neither of whom have power and conservation expertise, are approved for the Council positions, not only will they each make $120,000 a year, but they’ll likely end up exploiting PERS for big payouts. That’s because their pensions will be calculated using their new high salaries, potentially rewarding them with hundreds of thousands of extra dollars. This when PERS is already overwhelmed with billions of dollars in unfunded liabilities.

I remember when smug Enron executives tried to intimidate Oregon Public Utility Commissioners in an effort to secure approval for Enron’s takeover of PGE. Commissioner Joan H. Smith blasted the Enron people at a hearing for assuming Oregonians were simple-minded country bumpkins . “Do you think we all just fell off a turnip truck,” she said.

Gov. Brown must think the members of the Senate Rules Committee just did.

Members of the Senate Interim Committee on Rules and Executive Appointments


Chair Senate Majority Leader Ginny Burdick
Vice-Chair Senate Republican Leader Ted Ferrioli
Member Senator Lee Beyer
Member Senator Brian Boquist
Member Senator Arnie Roblan

 

Double dealing with PERS: enough of Gov. Brown’s shenanigans

kate-brown-10x8-d383f11824f1b171

What, me two-faced?

What one hand giveth, another taketh away.

Gov. Kate Brown knows how it works.

Just as a task force she appointed puts out a report on how PERS’ massive unfunded actuarial liability (UAL) might be reduced, Brown appoints two legislators to jobs that will drain PERS of hundreds of thousands of dollars.

The Task Force, which Brown charged with identifying options to generate additional funding to reduce the PERS UAL by up to $5 billion over the next five years, issued its report yesterday (Nov. 1). Ideas put forward in the report to generate revenue for PERS , which would impact all Oregonians, include:

  • Privatize state universities
  • Sell surplus port and airport property
  • Sell additional Common School Fund land assets
  • Expand the types of gaming the Oregon Lottery offers and direct revenue from these new options toward PERS
  • Impose a charge for new water rights based on market prices.
  • Sell or do an IPO of SAIF
  • Institute more aggressive foreclosures on properties with property tax and other liens (“Cities could use their own discretion to use the streamlined process (in order to make sure they don’t evict 85-year old grandmothers,” the report notes.)
  • Increase OLCC’s flexibility to operate the spirits business to maximize profits; Increase alcohol licensing fees and excise taxes on beer and wine; impose a surcharge on all distilled spirit (liquor) sales in Oregon, calculated as a percentage of the retail sales price (e.g., 1%, 5%, or 10%).

While all this revenue-raising analysis is going on, Gov. Brown is proposing to undermine PERS’ financial health by conspiring with Sen. Richard Devlin (D-Tualatin) and Sen. Ted Ferrioli (R-John Day) to enrich the legislators, fleece PERS and drive up the costs of PERS payers, such as schools and local governments.

As I’ve pointed out previously, on Oct. 23, Brown nominated Devlin and Ferrioli to the Northwest Power & Conservation Council, a federally funded panel that provides policy and planning leadership on regional power, fish and wildlife issues. The Senate Rules Committee is scheduled to consider the nominations on Nov. 13.

The council positions come with a $120,000 annual salary, substantially more than Devlin and Ferrioli have been making from their legislative salaries.

Furthermore, as The Oregonian’s Ted Sickinger reported this past week, both men will likely end up raiding PERS for big payouts.

The jobs “…will allow both legislators to double dip, turbocharge their public pensions, or both,” Sickinger reported.

As Sickinger explained it:

“Ferrioli already draws a $33,083 annual pension from the Public Employees Retirement System. That benefit stems from 6½ years working for the Oregon Department of Veterans Affairs in the late ’70s and early ’80s…And because he is already at retirement age, he is allowed to double dip, continuing to collect it while working full time at the council.

Meanwhile, Ferrioli is eligible for a separate pension for his 20 years of legislative service. And if his Senate colleagues confirm him to the new position, that pension will be calculated using his new higher salary and the extra years of service he earns at the power council, according to PERS.

It’s unclear how much service credit Ferrioli earned during his years at the Legislature, given the part-time work. But assuming he sticks with the job for the first three-year term, the new salary could quintuple his legislative pension, which could translate to hundreds of thousands of dollars in extra benefits over the course of his retirement (emphasis mine). And he could start drawing that while continuing to work at the council.

Devlin, too, could see a similar multiplier in his legislative pension if confirmed. He, too, has 20 years of legislative service and is eligible to start drawing his pension. But if he holds off, the new salary and service at the power council would balloon those benefits after three years.”

This brazen attempt to exploit PERS when it is already suffering from billions in unfunded liabilities needs to be cut off at the pass.

If they want to maintain their reputations as public servants, Devlin and Ferrioli should either decline the Council appointments or they should refuse any additional PERS benefits that may arise because of them.

And Gov. Brown and the Legislature need to put a stop to this practice of raiding PERS to enrich former Legislators. It’s time to stop taking Oregonians for rubes.

 

 

 

 

Abuse of Power: Gov. Kate Brown’s PERS Payoff

Kate Brown

Why is Gov. Kate Brown laughing?

Co-conspirators Gov. Kate Brown (D), Sen. Richard Devlin (D-Tualatin) and Sen. Ted Ferrioli (R-John Day) have concocted a bipartisan scheme to enrich the legislators and fleece the Public Employees Retirement System (PERS).

This while a task force appointed by Gov. Brown has been trying to determine the best ways to slash the the crushing PERS debt by $5 billion. The task Force’s report is expected to be submitted on Nov. 1. The PERS Board has predicted that if solutions aren’t found, PERS costs could rise from 17 percent of state and local government annual payrolls to 34 percent in 2021. That would be likely to force worker layoffs.

And you thought Oregon was a corruption-free state.

On Oct. 23, Brown nominated Devlin and Ferrioli to the Northwest Power & Conservation Council, a federally funded panel that provides policy and planning leadership on regional power, fish and wildlife issues. The Senate Rules Committee is scheduled to consider the nominations on Nov. 13.

Neither legislator will bring any expertise in regional power, fish and wildlife issues to the Council. Devlin, 65, is a retired corrections officer and private investigator. Ferrioli, 66, is a retired public relations executive.

But their lack of expertise is not the most egregious issue. It’s their exploitation of the public purse.

First, the council positions come with a $120,000 annual salary, substantially more than Devlin and Ferrioli have been making from their legislative salaries.

Second, as The Oregonian’s Ted Sickinger reported this past week, both men will be raiding PERS for big payouts.

The jobs “…will allow both legislators to double dip, turbocharge their public pensions, or both,” Sickinger reported.

This is how Sickinger put it:

“Ferrioli already draws a $33,083 annual pension from the Public Employees Retirement System. That benefit stems from 6½ years working for the Oregon Department of Veterans Affairs in the late ’70s and early ’80s…And because he is already at retirement age, he is allowed to double dip, continuing to collect it while working full time at the council.

Meanwhile, Ferrioli is eligible for a separate pension for his 20 years of legislative service. And if his Senate colleagues confirm him to the new position, that pension will be calculated using his new higher salary and the extra years of service he earns at the power council, according to PERS.

It’s unclear how much service credit Ferrioli earned during his years at the Legislature, given the part-time work. But assuming he sticks with the job for the first three-year term, the new salary could quintuple his legislative pension, which could translate to hundreds of thousands of dollars in extra benefits over the course of his retirement (emphasis mine). And he could start drawing that while continuing to work at the council.

Devlin, too, could see a similar multiplier in his legislative pension if confirmed. He, too, has 20 years of legislative service and is eligible to start drawing his pension. But if he holds off, the new salary and service at the power council would balloon those benefits after three years.”

This brazen attempt to exploit PERS, which Brown, Devlin and Ferrioli know is already in deep trouble, needs to be cut off at the pass.

If they want to maintain their reputations as public servants, Devlin and Ferrioli should either decline the Council appointments or they should refuse any additional PERS benefits that may arise because of them.

Gov. Brown needs to stop taking Oregonians for rubes. It’s time to put a stop to this abuse of the system.

 

 

 

 

 

Gov. Brown’s Hiring Freeze: Too Little, Too Late

brownhandsraised

Finally.

More than two months after Senate Republican Leader Ted Ferrioli of John Day called for a hiring freeze in Oregon’s public sector, Democratic Gov. Kate Brown has signed an executive order imposing a hiring freeze.

But it will only last until June 30 of this year. Too little. Too late.

In deciding on a hiring freeze, Brown’s no bold innovator. She’s following what more responsible states and businesses have done before.

Gov. Asa Hutchinson of Arkansas, in an effort to strengthen state finances, imposed a state hiring freeze last year that whittled 1,161 employees from the payroll.

Nebraska Gov. Pete Ricketts, whose state missed revenue forecasts last fiscal year and is forecasting a miss again because of declines in farm income, also put on a hiring freeze for state employees. “As Nebraskans, we don’t spend money we don’t have,” Ricketts said.

Businessess pull back when they face financial challenges, too.

Macy’s, faced with unfavorable earnings, decided to shut down 68 stores and cut more than 10,000 jobs.

In December 2011, then Gov. John Kitzhaber, who was also facing budget troubles, ordered a hiring freeze. But when Gov. Brown released her recommended budget for 2017-19, she chose not to do the same.

In fact, with Oregon facing a $1.6 billion budget shortfall in the 2017-19 biennium, buried in the Governor’s initial budget was a proposal to actually increase the state government workforce from 38,737 in 2015-17 to 39,412 in 2017-19. That’s an increase of 675 full-time equivalent employees.

“Using the cost information from the Legislative Fiscal Office, this 1.7 percent increase would cost the state more than $120 million in compensation costs for the 2017-19 biennium,” according to Facing Reality, a Cascade Policy Institute report.

“A prudent step of a hiring freeze would free up resources and ward off some of the pressure to increase taxes, fees, and charges,” the report said.

An ever-expanding state is not sustainable without ever-increasing taxation.   If Oregon is to responsibly manage its finances, an across-the-board rigorously enforced hiring freeze, with stringent requirements for exceptions and restrictions on hiring contractors, should be imposed for the entire next biennium.

Surely the governor and Legislature, with a state workforce that’s already at 38,737, can find ways to meet the state’s needs by adjusting the workload and assignments of that workforce.

Take a leap folks. Do the right thing.

 

 

Over the top: Oregon’s $10 million State Senate election

“There are two things that are important in politics,” U.S. Senator Mark Hanna said in 1895. “The first is money and I can’t remember what the second one is.”

Candidates for Oregon’s state Senate showed the truth in that observation in their 2014 races, which led to campaign spending of $10 million. That’s right, $10 million to decide the winners of just 16 Senate seats in a state with a smaller population than Kentucky.

Oregon Senate

Oregon Senate

That’s $10 million, enough to cover the annual tuition and fees of 1026 students at the University of Oregon.

But wait. There’s more. Candidates in 3 of those 16 races ran unopposed and candidates in 7 others were in such uncompetitive races that the victor won by more than 15%. That leaves just 6 seats with real races.

Here are the 6, with the expenditures by each candidate and the winning margins:

Screen Shot 2014-11-22 at 5.42.14 PM

Of the 6 competitive races, the Democrats won 4 and the Republicans 2, giving the Democrats more solid control of the Senate.

Based on filings with the Oregon Secretary of State, the committees of all the candidates for the 16 Senate seats spent a combined total of $7,816,657.33 in the primary and the general elections.

The most expensive race in terms of candidate committee spending expenditures was the one between Bruce Starr and Chuck Riley with total expenditures of $1,794,346.39. That made it the most expensive State Senate race in Oregon history.

Bruce Starr (L) and Chuck Riley

Bruce Starr (L) and Chuck Riley

On top of these candidate committee expenditures, the Senate Republican and Democratic Party Leadership Funds spent a bundle.

Figuring out how much they spent beyond the spending of the candidate committees gets a little tricky here. That’s because some of the money spent by the Senate Leadership Funds came from contributions by candidate committees. These contributions also show up as expenditures by the candidate committees, so counting them also as expenditures by the Leadership Funds would be double counting. Therefore, in order to accurately figure out additional spending by the Leadership Funds you have to subtract the money they received from the candidate committees. Got it?

In the case of the Senate Democratic Leadership Fund, the contributions it received beyond donations from the candidate committees include $50,000 from Everytown for Gun Safety (former New York Mayor Michael Bloomberg’s operation), $100,000 from the Democratic Leadership Campaign Committee (A Washington, D.C.-based group that works to win state legislative seats and chambers for Democrats), and $50,000 from the Oregon Priorities PAC.

Michael Bloomberg

Michael Bloomberg

After the election, Everytown for Gun Safety, which also contributed $75,000 to the successful State Senate campaign of Chuck Riley-D and $250,000 to Gov. Kitzhaber, boasted of its campaign influence. “…the election of Rep. Sara Gelser (who received $186,014.40 from the Senate Democratic Leadership Fund) to the state Senate signals a pro-background check majority in 2015, which clears the most significant roadblock in Everytown for Gun Safety’s work over the past two years to pass a background check bill there,” Everytown said.

The extra expenditures by the Senate Democratic Leadership Fund, beyond contributions it received from candidate committees, totaled $1,140,387.53.

In the case of The Leadership Fund for Senate Republicans, major contributions, beyond donations from the committees of the candidates running in 2014, included $15,000 from the Oregon Sportsmens Association PAC, $45,000 from the Oregon Family Farm Association PAC, $25,000 from the Taxpayers Association of Oregon PAC and $20,000 from the Pacific Seafood Group Employee PAC.

The Republican Leadership Fund, just like the Democratic Leadership Fund, also received substantial sums from current state senators not running in 2014. Friends of Ted Ferrioli, for example, raised $305,298.28 in 2014, then turned around and donated $213,500 of that to the Republican Leadership Fund.

Using the same formula as with the Senate Democratic Leadership Fund, the extra expenditures by The Leadership Fund for Senate Republicans totaled $1,222,851.

Add it all up and you have $10,179,985.80.

And that doesn’t even count money spent by other groups in support of Senate candidates, including some so-called dark money which will never be disclosed.

Clearly, Oregon is headed for the big time. The question: what are the big contributors going to expect as a return on their investments?