OREGON AFSCME

e-lert #2 ¥ Feb. 5, 2010

Edited by Don Loving, Council 75 Public Affairs Director

We have PERS news, Special Session news, a way to double your contribution to Haiti relief and more — start reading! J

* * *

SPECIAL SESSION — We are in the midst of a legislative Special Session that is expected to last the month. The passage of Ballot Measures 66 & 67 back on Jan. 26 means lawmakers are not in full crisis mode during this session, and it remains to be seen exactly how "newsy" it is. We do have a few early tidbits for you in this e-lert.

During the session the best way to contact a member of the Council 75 lobbying team — Joe Baessler, Mary Botkin, Ralph Groener or Janice O'Malley — is either via e-mail or on their cell phones. If you go to the Oregon Legislature tab on our website's front page you'll find links to each lobbyist's e-mail and their cell numbers. That tab also includes a handy e-mail link for each of Oregon's 90 state legislators.

* * *

OVERRIDDEN — Oregon AFSCME was part of a large coalition of both Democrats and Republicans supporting an override of the governor's veto of SB 897, which did several "housekeeping" fixes to PERS.

AFSCME was primarily concerned about two provisions in SB 897. One is the measure's edict that PERS is responsible for errors if it miscalculates a retiree's benefit level. There have been situations in the past where the agency gave a retiree wrong information and even paid too much in benefits, then demanded the retiree pay it back. Now PERS is on the hook for such mistakes. AFSCME was also very supportive of the portion of SB 897 that allows a PERS retiree to sit on the PERS Board of Directors. The current board make-up calls for one "employee designee," but that person has to be an active, current member. Under SB 897, that person could be a retiree.

"Reality is people know more about the system after they've retired than they do while they're still working, and a retiree would have more time to devote to the position," said Botkin, Oregon AFSCME's longtime point person on PERS.

The House will vote on the override soon; it is expected to pass there as well. The vote in the Senate was 27-1. Sen. Fred Girod (R-Stayton) was the lone "Nay" vote, and he did so "in protest of how the Oregon Investment Council is investing the PERS money," not because of SB 897 per se.

* * *

PERS IS NOT SINKING — Since we're talking about PERS anyway, let's jump away from the Special Session for a moment. There have been several gloom and doom reports in the mainstream media recently regarding anticipated PERS employer contribution rate increases. Then if you peruse the "readers comments" sections so popular now online, written by (mostly) uninformed individuals, you'd think the whole PERS system was ready to collapse any day. That's simply not true.

Adding to the considerable misunderstanding and misinformation is the fact that the state's retirement system works on a considerable time lag; that is, the exceedingly bad investment year of 2008 won't be fully felt by employers until 2011. And while the news certainly isn't good, it's also not nearly as bad as many are making it out to be.

PERS Coalition attorney Greg Hartman notes the Jan. 29 PERS Board of Directors meeting drew a full house, with many there to see what the board would do regarding employer rates in wake of the extremely poor stock market returns from investment year 2008. As anticipated — and as supported by the unions — the board adopted a graded approach that will "smooth" or moderate the increases over time. As a result, the increase in employer contribution rates on July 1, 2011 should average around 3.5 percent. Hartman notes this decision was based in part to the excellent earnings by the fund in December 2009 (4 percent). Hartman added that individual employer rates can very widely from the average and that the impact of various employer "side accounts" will also be considerable.

PERS Board Chairman James Dalton made a point of emphasizing that "employer contribution rates are going up substantially and everyone should be aware of that." Based solely on the projections done by the PERS actuary, Dalton is correct. However, these projections often miss reality by an enormous margin.

Hartman points to the recently concluded investment year for 2009 as a prime and as-current-as-possible example. PERS' 2009 investment return came in at 19.5 percent — substantially better than any predictions or models had anticipated. Yet Hartman says that result should not shock anyone.

"Historically bad investment years have been followed by good ones," said Hartman. "Yes, we still have some additional catching up to do on the investment side. But the bottom line is that 2008 put a big funding dent in PERS — and any other stock market-based fund — and depending on how long it takes the market to recover, we could see significant increases in employer contribution rates ... or not. Only time will tell."

Hartman noted the PERS board decided not to make any distribution to the contingency reserve and distributed everything on a pro rata basis. As a result the rate guarantee reserve will go from a negative $987 million to a negative $421 million, another indication of a substantial upswing in the midst of several newspaper editorials claiming the PERS sky is falling.

"Cutting that number by $566 million, that's very good progress in just one year," said Hartman. "We've said for years that PERS is a long-term entity. For all of the angst we hear here, it's recognized as one of the best-funded public employee pension systems in the nation. It's built to absorb some ups and downs. No fund in the country could fully absorb the dismal year that was 2008, but PERS has bounced back well in just one year. There's no need for panic in the streets."

* * *

OK, back to the capitol ...

LOCAL CONTROL — Baessler testified this week in support of SB 1042, which would eliminate the current state prohibition that disallows local governments from adding their own tax increases to cigarettes and other tobacco products. The measure is sponsored by Sen. Laurie Monnes Anderson (D-Gresham) and is endorsed by Local 88 (Multnomah County), a union that represents hundreds of county health employees seemingly always under the gun for cutbacks.

"Our position is simply that local governments should be able to make their own decision about additional taxes above the state tobacco tax, just like gasoline," said Baessler. "Of course, the big tobacco companies don't like the idea."

* * *

CAMPAIGN FINANCE REFORM — Baessler, also the Council's point person on elections and campaign finance reform, does not expect to see any major legislation on those topics during the short session.

"There are things we'd like to do, but they will take time to study and examine," said Baessler. "There are rumblings about this or that right now, but I think we'll see little this month and a more comprehensive campaign reform package in the 2011 session."

One measure sure to see the light of day, either this month or next year, is a bill prohibiting campaign literature in the form of fake ballots. The "No" side on the recent Measure 66 & 67 campaign put out a piece so similar to the ballot that a handful of them were actually returned to elections offices as ballots by people.

"At the least, you'll see some heavy restrictions and required disclaimers on those types of things," said Baessler.

* * *

CREDIT CHECKS — Botkin is in the middle of a fight to "fix" SB 1045 so it meets union muster. In general, AFSCME likes the measure — it would eliminate employers from using credit checks as a basis for hiring employees.

"There was very compelling testimony from a man who had been a convenience store clerk and lost his job 18 months ago," said Botkin. "As he told the committee, 'I lost my job so I can't pay my bills; now I can't pay my bills because I don't have a job. What do I do?' He made an excellent point."

But there's a provision within SB 1045 that would exempt "public safety employees" from the prohibition.

"It's mostly the sheriffs association saying that if someone has filed for bankruptcy in the past it goes to their 'overall character' in some way," said Botkin. "In this economy, we don't think years-old financial mishaps should preclude people from getting jobs, public safety or otherwise, so I'm trying to get that piece out of the bill because we want to support the general concept."

* * *

NO TO BPAs — If you are a Northwest native, when you hear the initials "BPA" you think Bonneville Power Administration, the federal agency that deals with the Columbia River dams, electricity and such. But there's another BPA under scrutiny at the capitol right now — bisphenol A. It's a dangerous chemical found in some bottles, "sippy cups" and formula canisters, and SB 1032 would ban it from Oregon.

Four Oregon AFSCME local unions have taken an official stand on BPAs by supporting SB 1032: Local 3580 (Metro), Local 3336 (DEQ), Local 132 (Child Care Providers Together) and the aforementioned Local 88. O'Malley testified on SB 1032 representing those four locals, AFSCME as a whole and herself as a relatively new mother.

"I felt betrayed to find out this chemical could be in my baby's containers," she told the committee.

O'Malley says 90 percent of such containers do not have BPAs, which have been linked to a variety of health issues, ranging from cancer to ADHD. Even in small doses, O'Malley said it's hard for children's bodies to break it down and there are problems with infants still-developing organs.

"It's the cheaper products that have this problem, and there's just no reason to place our children in danger," she said. "While many companies are voluntarily banning its use, a statewide prohibition would protect all Oregon families. We are particularly concerned with BPAs in products at various 'dollar store' outlets, which are frequently shopped by lower income people who can least afford health issues with their children."

Opposition is coming from grocers and local can manufacturers, which O'Malley says makes little sense. Grocers, she notes, simply sell what their wholesalers sell them, so if all bottles and such are BPA-free, it won't affect their sales. And Oregon-based can manufacturers don't make infant containers anyway, so they are not directly impacted either.

* * *

'EARNED TIME' DEBATE — A longtime Oregon AFSCME activist gave heart-wrenching testimony this week on HB 3508, a measure that would increase possible "earned time off" in the state prison system by 10 percent.

Longtime Council 75 members may recall the tragedy suffered by the family of Michael Brown, a Port of Portland police member at Local 1847. In 2003, his 18-year-old daughter — Cassandra "Cassie" Brown — was murdered and her body dismembered then dumped in the Willamette River by a male acquaintance. Under HB 3508, Cassie Brown's murderer could get out another 10 percent sooner for so-called "earned time."

"This isn't a policy bill, it's about saving the Department of Corrections $6 million," said Botkin. "We need to cut where we can, we all understand that, but in the big picture, $6 million isn't a lot of money and people like Cassie's murderer don't deserve to get out quickly."

Botkin said HB 3508 comes down to a balance between earned time and victim's rights. She said AFSCME wants to make sure any earned time is truly "earned," and "not some automatic sentence reduction based on the need to save DOC money. That's not good public policy."

* * *

HELP FOR HAITI — Union Plus is matching donations dollar-for-dollar for Haiti earthquake relief with a $100,000 commitment. Oregon AFSCME members can maximize the power of their contributions by visiting www.UnionPlus.org/Haiti and Union Plus will automatically double contributions made to the AFL-CIO Solidarity Center's Earthquake Relief for Haitian Workers Fund. That means $10 becomes $20, $25 becomes $50, and $100 becomes $200. There's also now a direct link in the upper right corner at the Oregon AFSCME website.

* * *

CALENDAR ODDS & ENDS — Local 132 (Child Care Providers) is staging a rally on Tuesday, Feb. 9 in the "galleria" area of the capitol directly behind the information kiosk. The rally is to heighten awareness of the funding crisis faced by Employment Related Day Care (ERDC), which is under the gun financially again and will be cut drastically on July 1 if the Legislature does not find additional dollars ...

There will be a candidates' forum in Pendleton on Saturday, Feb. 13. Among those to be interviewed are Rep. Bob Jenson (R-Pendleton) and Rep. Greg Smith (R-Heppner), who are both being targeted by the Oregon Republican Party with primary election races as "payback" for their support of the legislative measures that eventually became Ballot Measures 66 & 67. Contact LeAnna Duchek in the Pendleton office for more information.

# # #