LETTER submitted to the Corvallis Gazette-Times by John Detweiler: On March 29th, the Sunday Oregonian ran a headline "PERS falls into a familiar chasm" with the sub-headline " The public pension is billions short again; barring a stock rally, your tax dollars will fill the breach". The accompanying graph shows assets of $37.1 billion and a shortfall of $18 billion. The next day PERS came out with a fact sheet,
which can be found at: www.oregon.gov/PERS/index.shtml, which tells us that the fund was valued at $42 billion at the end of February 2009.
The sheet does not tell us what the shortfall is; but it does tell us that unfunded liabilities are amortized over 20 years, allowing time for markets to recover, and that the current funding shortfall is due to lower investment returns, not a large increase in system liabilities as was the case prior to the 2003 PERS Reform.
In May 2009, Corvallis is going to vote on establishing an urban renewal district (URD) and paying for it with tax incremental financing that diverts money from general government. We know that life expectancies are increasing requiring changes in social security. Do we dare assume that PERS will not require similar changes or that markets recover quickly enough to amortize lower investment returns over 20 years? Corvallis may be faced with a PERS induced tax increase. It is not prudent to divert tax money to the URD when we are facing these kinds of unknowns. Vote against the URD.
John H. Detweiler; www.peak.org/~detweij
Tuesday, March 31, 2009
PERS shortfall should influence 'no' vote on URD
Subscribe to:
Post Comments (Atom)
2 comments:
I think you've missed the point...
The URD does not divert tax money, in that it is "tax increment financing"...so it only sets asides increases in tax revenue for the district during the period. It sets aside that money to invest in redevelopment, both public and private, with the goal of increasing the tax base, and returning not only more tax revenues at the sunset of the district, but a signficantly more vital economy. In addition, the URD for corvallis comprises less than 5% of Corvallis/Benton County Revenues, and the taxing districts affected are all in favor of the proposed URD.
Secondly, what does the URD have to do with PERS? One is state funding, and the other is local tax levy money, which goes to completely different uses.
The proposed Corvallis URD is economic development done right, for the health of corvallis, and the health of downtown.
Via email:
I think Katherine missed the point in that she has forgotten that
the last time PERS had an unfunded liability, it was made up with bonds
issued by those who had PERS employees.
--
John H. Detweiler
Post a Comment