Saturday, December 24, 2005

Portland's Free Lunch

Portland's pension system for police and firefighters is a one of a kind in the United States. The system is pay as you go, so the tax payers price tag rises in direct proportion to current cost outlays. Someday the costs will overwhelm the city budget and massive infusions of taxes will be needed to keep the system afloat. A panel on independent citizens estimated that the unfunded liability of the system will be 8.4 billion dollars in 40 years. That's billion with a 'B'. When voters approved the property tax limitation Measure 5, the Portland Police and Fire Pension Fund was exempted from the 1.5% property tax limitation. That means that liability keeps on building outside the property tax limitation and the taxpayer is on the hook for it.

The Portland Police Pension System is also unique in that the Disability Board has a high proportion of system members sitting on the board and voting on whether to approve disability requests for their brethren. This is a recipe for misuse. Members accused of misconduct routinely file for disability payments and will be assured of receiving them at a much higher rate than other public employees covered by PERS. Then too, a previous Chief of Police and Mayor would be conveniently absent when controversial disability requests would come up for a vote. I can't say the fix was in, but it certainly seems that way. It is encouraging to see that the current Chief and Mayor haven't stooped to this skullduggery.

The commission's independent panel has recommended overhauling the pension system and having all new police and fire employees covered by the state PERS system. The Portland Police Association has totally rejected the panel's recommendations and has offered no alternative. It's too bad the Association isn't willing to help fix a system that is bound to fail sooner if not later.