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Out-of-State PERS Retirees: Please Send Money

June 30th, 2011 by dk

Lawmakers lack modesty. After wielding the heavy hammer of legislation day in and day out, they lose the capacity to think small. I’ll bet shot putters make lousy table tennis players. The ball is too light for them.

So I can understand why nobody has characterized Oregon House Bill 2456 as nimble. 

The bill in its original form would have eliminated a “tax remedy benefit” for out-of-state retirees receiving Tier 1 benefits from Oregon’s Public Employees Retirement System. The bill aimed to lessen benefits for about 15,000 recipients by an average of almost $5,000, saving the state $36 million a year and reducing the retirement fund’s long-term liability by $450 million.

Originally, common sense was on its side. Out-of-state retirees can’t claim they need relief from Oregon income tax when they no longer pay Oregon taxes. It seems only right. But that brings us back to the “might factor.” (Pun intended.)

The new law might well have attracted the only force yet devised to undo a law without the consent of lawmakers — a lawsuit. Judges have curtailed other attempts to change PERS payments, reasoning that terms of a contract cannot be renegotiated after the fact.

Common sense started on its side. Now it’s on its head.

House Bill 2456 in its final form closes the barn door after the animals have escaped. It would apply only to the handful of Tier 1 public employees who haven’t retired yet, or who don’t quickly retire once they hear about House Bill 2456. It will apply only to those who continue working for the state in 2012.

Wield a hammer, dodge a hammer — that’s the life of a Salem lawmaker. I do not lack a lawmaker’s modesty, so I’ll offer my own proposal.

Every month, 15,000 PERS retirees walk to their mailbox and retrieve a check from the taxpayers of Oregon. They might hope for a letter or postcard telling them they are missed in the state where they did their work, but those notes undoubtedly come with less regularity. My “We Miss Your Tax Remedy Benefit” program would change that.

Oregon exports $50 million (give or take) of public pension benefits every month. Those recipients cannot pay Oregonians to cut their lawn, pour their coffee, clean their house, or teach their grandchildren. Because they are out of state, they don’t get to experience how roads, bridges, public safety, education, employment, and social services are struggling from lack of funds. They might forget what their money could be used for back in Oregon. So we should remind them. Every month.

Under my plan, any non-profit organization, local government body or state agency that wishes it had more money can prepare a letter making their case directly to these 15,000 retirees. Printing and postage for each pitch letter would be paid by the organization asking for support.

Each out-of-state Tier 1 PERS recipient would then receive each month a bulging packet of pleas from across the state, along with their retirement check. No legislation required.

Private business retirees also could include notes, describing what they would do if their benefits had been padded with an extra few thousand dollars a year. I’ll bet they’d jump at the chance! They’d probably even volunteer to assemble these packages each month, saving the state any labor costs.

And just to be sure we make this as fun to receive as it is to send, Governor Kitzhaber will instruct the Oregon Department of Revenue to place the PERS check inside a randomly chosen fundraising letter each month. That way the retirees will have incentive to open each envelope in their “(Please) Care Package” from Oregon. They will enjoy reading about all the good their money could do for Oregon, if only they were still here. Inside one of those letters would be their monthly check from the state.

It will be like an Easter morning egg hunt every month, as they wade through letters from Oregon well-wishers, each expressing in their own way: “Wish you were here! (Or at least your unneeded tax remedy benefit.)”


Don Kahle ( writes a weekly column for The Register-Guard and blogs.

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