HOT AIR SOCIETY
BY TON Y CORCOR A N
Can you fix PERS?
THE BELLOTTI EFFECT IS NOT FOOTBALL LINGO!
J
ust to be clear about my biases: I despise The Oregonian editorial board
because it despises public employees and it misrepresents Oregon politi-
cal reality because of it. And I’m also a retired Public Employees Retire-
ment System (PERS) parasite, as my friends refer to me.
Ever since Oregon Democrats won control of both chambers of the
Legislature in 2007, The Oregonian incessantly accuses Dems of monolithic
control of the state without Republican input. That’s pure bullpucky!
The latest example, a recent paean to Dennis Richardson, concluded: “The
election of a Republican to the secretary of state’s office provides at least a little
balance to Democratic dominance in the rest of state government. … Certainly,
Oregon staunchly remains under one-party rule, a phenomenon that’s unhealthy
no matter which party is in charge.” What a crock!
With the exception of 2009, Democrats have never controlled 60 percent of
the seats in the House since the supermajority requirement to move tax measures
was imposed. Let’s be honest, the majority party can’t pass anything, whether it’s
a budget or a transportation plan or PERS reform without the assistance of the
minority party. And minority parties always whine about being ignored. I should
know; I was the minority whip in the House and the Senate for four of my five
sessions.
Obviously, with the start of the 2017 legislative session, we need to talk about
PERS. It can’t be ignored given the looming state general fund deficit and increas-
es in PERS rates for schools, state and local governments. I co-chaired the 2003
senate PERS committee that successfully passed five major reforms (bipartisan,
BTW). Our Supreme Court upheld four of them.
As a current PERS retiree, my monthly benefit information is public record. If
you’re curious, look it up. Hint: It’s less than my monthly social security benefit.
That’s why I’m still driving a 15-year-old Toyota pickup.
PERS began publishing the names and monthly benefit amounts of PERS
retirees as the result of a public records lawsuit in 2011. Back then, I thought
to myself: Holy Golden Years, Batman, PERS is gonna have a big PR problem!
Sure enough, The Oregonian subsequently reported former UO coach Mike Bel-
lotti’s retirement pay — $41,000 a month. That’s nearly $500,000 a year, or
about a $10 million actuarial liability if the 60-year-old lived for 20 more years.
The Bellotti Effect.
Bellotti was identified as the all-time highest paid PERS retiree — at the time.
But even back in 2011, I prepared for a steady stream of reports like this, as Tier
One PERS members retired. Sure enough, last August the R-G reported that Dr.
Johnny Delashaw, a former neurosurgeon at Portland’s Oregon Health & Science
University supplanted Coach Bellotti as the state’s top public pension recipient.
Delashaw received an annual benefit of $660,000 a year from PERS. That’s 23
percent higher than Bellotti’s annual benefit of $500,000.
Anyway, there’s one of the problems with PERS. The system was never de-
signed for payouts like this. How do you fix it? Maybe you change the definition
4
January 12, 2017 • eugeneweekly.com
of “state salary” for the purpose of the retirement calculation? But you can’t go
retroactive; just ask the courts. Retirement plans are contracts; a deal’s a deal.
The coach and the neurosurgeon exemplify the problem. In Bellotti’s case
benefits were calculated using the “full formula” method, which considers three
factors — salary, years of service and a multiplier of 1.67 percent for Tier One
employees. PERS averaged his highest three years annual salary at about $1.35
million.
But the UO listed Bellotti’s 2009 “base salary” as only $299,999. The other
million came from endorsements by Nike and the Oregon Sports Network, ticket
sales incentives and other perks which meet the defini-
tion of PERS “salary” under Oregon law.
The university handled this outside
money as a transfer of its own reve-
nue; the endorsement money was
included in Bellotti’s university
pay and his benefit calculation.
The UO says the payments were
channeled through the university
to avoid conflicts where coaches
were negotiating endorsements that com-
peted with the university’s own deals.
Who’da thunk in 1945, when PERS
was created, that 70 years later public
college coaches or university neurosur-
geons would get half or more of their
salaries from shoe companies or drug com-
panies?
I’ll be following a bipartisan PERS work
group headed by Senators Betsy Johnson
and Tim Knopp exploring some proposed
solutions. The bad news is that what
they’ve come up with so far doesn’t ad-
dress the current rate increases. Stay
tuned.
EW columnist and former legislator Tony Corcoran
will kick off the Blackberry Pie Society’s 2017 speak-
ers series, “Think Again,” with a discussion of issues
facing the upcoming 2017 Oregon legislative session
from 6:30 to 8 pm on Tuesday, Jan. 17, at the Cottage
Grove Armory, 628 E. Washington Street in Cottage
Grove. The event is free and open to the public, and
refreshments will be available. For more info, contact:
Blackberry Pie Chairperson Leslie Rubinstein at 541-
521-2887 or blackberrypie@gmail.com.