PSU study: State needs revenue to battle PERS costs

U.S. currency in one hundred dollar denominations are displayed for illustration purposes, in Washington, Monday, March 31, 2014. (AP Photo/J. Scott Applewhite)
U.S. currency in one hundred dollar denominations are displayed for illustration purposes, in Washington, Monday, March 31, 2014. (AP Photo/J. Scott Applewhite)

PORTLAND, Ore. (AP) – A new study from Portland State University suggests that a rise in compensation costs for Oregon’s public employees could lead to a reduction in the number of people providing key public services.

The Oregonian/OregonLive reports that according to a study from PSU’s Center for Public Service, compensation costs are outpacing projected revenue growth. Without new revenue from somewhere like new taxes, state government employers will have few options other than reducing their workforce by as much as 10 percent.

The study found that the cost increases are largely driven by the spike in employers’ required contributions to the state’s underfunded pension system, which are expected to double as a percentage of payroll over the next five years.