Monday, February 18, 2013

Oregonian Editors and Oregon Overspending

The Oregonian editorial "Big PERS benefits, small state economy" presents the case that Oregon is overspending for PERS retirement benefits. The editors note: "In Oregon, a Prius economy is towing a PERS yacht."

The editors point out that Oregon has about the same retirement funds debt as Washington and Colorado but with a much lower personal income base.

But, one could say the same about many areas of Oregon government spending. Take for instance public spending for K-12 education.

Oregon spends more per student in public K-12 education than either Washington or Colorado. Significantly more. In 2010 Oregon spent an average of $9,624 per K-12 student (p. 112), whereas much richer Washington spent $172 less per student ($9,452) and Colorado spent $771 less per student ($8,853). This despite the fact that Oregon's total personal income (as noted in the Oregonian chart above) is only $135 billion compared to Washington's $279 billion and Colorado's $206 billion.

In other words, Oregon is spending more per student in public K-12 education than either Washington or Colorado even though Oregon personal income averages about 15% less per person than Colorado's or Washington's.

Of course, it's not only in public education, but in many other areas of government spending that Oregon is not only trying to keep up with its much richer neighbors, but overspending compared to them.

Almost three years ago, John Tapogna, ECONorthwest president quoted in today's Oregonian editorial on Oregon's PERS overspending problem, warned that in view of Oregon's stagnant economy the state might need to look to Idaho* as its model for public services rather than much richer Washington state.

That fact is inconvenient. The Oregonian editors favor reeling in spending on PERS but not other government funded services that provide poor service for more money than richer states spend. There is not a word here about Oregon living within the economic means of its citizens--except as regards PERS. The editors have wielded a good argument, but awkwardly for them, it has a much broader application that they have chosen to ignore.
*Commenter Ten Mile Island reminds me that Idaho, though spending significantly less than Oregon per student in K-12 public education (at $7,106 per student in 2010 only 3/4ths of Oregon's $9,624 spending), still gets slightly higher educational scores.

Not only in science, but in math too.


Ten Mile Island said...

Maybe this was in the link, but isn't Idaho spending about 2/3rds per pupil compared to Oregon?

And getting better scores?

T. D. said...

Thanks, TMI! I updated the post to reflect your point.

MAX Redline said...

And in the PPS system, per-pupil spending is close to $12,000. 1/3 of students drop out. Of those that remain, graduate, and attempt to attend college, half find that they need to take remedial math and English classes in order to enroll.

T. D. said...

Max, what do you think the chances are that the Oregonian would tie huge PPS spending to a the state taxpayer Prius towing a PPS yacht?

Thanks for the additional info both on spending and poor performance.