Lawmakers Weigh In On Cincinnati Reform Deal


Cincinnati and its public worker unions last week approved a series of pension reforms that will see the city contribute millions more to the pension system annually. In exchange, workers and retirees will see cuts in their COLAs, and some workers will be held to a less generous benefit formula.

The Cincinnati Enquirer asked for opinions on the reforms from three city council members. Here’s what they said:

David Mann

“Everyone is taking a haircut, including the city. I don’t know that there was any other choice. The only issue I have is where the $38 million will come from. But in terms of the overall problem, that is relatively minor. This is really good news.”

Christopher Smitherman

“This is the biggest issue the city faces. It’s not one of the issues on the public’s radar, but it is a huge deal for taxpayers. This deal brings certainty to the problem. The mayor’s experience with the Collaborative Agreement allowed him to have the vision to apply that experience to the pension.”

Yvette Simpson

“I’m happy there is a resolution, but there are lots of questions. Why do we have to infuse $38 million when don’t know where that money is coming from? Why are we borrowing money to put into the pension system?”

Cincinnati Mayor John Cranley also gave his comments:

“It was important to do this now,” Cranley said. “”We can’t have the city’s credit — which is also the city reputation — continually at risk by not tackling this problem. State Auditor David Yost basically said he was going to look at putting the city on fiscal watch if we did not get this resolved by the end of the year. He has been in contact with judge and me all year. That would have been a catastrophic blow to our reputation nationally.”

Under the reforms, the pension system is projected to be 100 percent funded within 30 years.


Photo credit: “Downtown cincinnati 2010 kdh” by kdh – Own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons –

Oregon PERS Reforms: The Supreme Court Will See You Now


Two major reform measures are finally ready for their day in the Oregon Supreme Court.

Public employees are challenging the 2013 reforms –which reduced the state’s unfunded pension liabilities by $5 billion by cutting COLAs and scaling back benefits – on the grounds that the measures broke contracts protected under the state’s constitution.

This week, both sides submitted their written briefings to the Supreme Court. Reported by the Oregonian:

Monday marked the deadline for written briefings to the Oregon Supreme Court, where public employees are challenging the legality of two pension reform bills enacted last year.

The laws reduced retirees’ annual cost of living increases and eliminated a benefit bump-up for out-of-state retirees that don’t pay taxes in Oregon. As such, they helped staunch the precipitous rise in required contributions to the system since the 2008 financial crisis decimated the fund’s investment portfolio and opened up a $16 billion funding gap.

Oral arguments will be held Oct. 14. Each side will have one hour. After that, public employers, the governor, lawmakers, employees and retirees can hold their collective breath, with a decision anticipated during expected in time for the 2015 Legislative session.

A quick breakdown of what we can expect each side to argue, from the Oregonian:

The Legislature referred any challenges to the bills directly to the Supreme Court to expedite the legal decision process. Public employees appealed the changes, arguing in briefs filed earlier this summer that the benefit changes violate the contract clauses of the Oregon and U.S. constitutions and amount to an illegal taking of private property without compensation.

The state and public employers maintain that the cost of living adjustments, contrary to previous decisions by the court, is not an immutable part of the contract. And even if it is, they maintain it can be changed, as the Legislature has done previously.

Likewise, they argue that the extra payments to cover beneficiaries’ state tax liabilities aren’t part of the contract and can be eliminated for out-of-state retirees who don’t pay Oregon taxes.

Legislators briefly weighed enacting another round of pension reforms this year, but they decided against it.