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By Janie Har March 16, 2012

Did Oregon add 9,000 state workers while revenue dropped by $4 billion?

PolitiFact Oregon enjoys receiving the newsletters of Rep. Dennis Richardson, R-Central Point. He’s written about China, federal timber reimbursements, and most usually, state spending. He is co-chairman with Rep. Peter Buckley, D-Ashland, of the House side of the Joint Ways and Means Committee.

Richardson’s newsletters often include statements worthy of a fact check, such as this one about state workers receiving a catch-up raise in 1981. (Inflation was so high then it wasn’t really a catch-up.) A recent newsletter made us wonder, once again, about the size of state government:

"The rising costs of state payroll expenses must be brought in line with the state’s revenue resources. According to Public Employment Retirement System (PERS) records, in 2006 Oregon had 38,000 employees and by 2011 the number of employees had increased to 47,000," he wrote. "Oregon finds itself in a conundrum. While 9,000 state employees were added to the state’s payroll, Oregon’s revenue forecasts dropped by more than $4 billion."

Numbers. Drool. Are those employee figures correct? Did the revenue forecast really drop by $4 billion? And, most importantly, is it fair to juxtapose the two?

Richardson said in a voicemail left at PolitiFact Oregon Central that Democrats built a government that we can no longer afford. "They expand government because their philosophy is that government can help more people," he said. "Mine is that that may be true, but you run out of money after a while."

In his newsletter, Richardson cited the Public Employees Retirement System, which produces a report every year that lists the number of employees for public employers in Oregon. Richardson correctly cites the numbers attributed to the State of Oregon.

But we decided to go further, because we’ve always been puzzled by the number of workers in state government.

We pulled figures from the retirement system, and also from the Department of Administrative Services, which handles the executive branch of state government, and the Oregon University System. We tried to get the best apples-to-apples comparison, asking the agencies to weed out temporary workers and to focus on people eligible for retirement.

We came up with a very odd table.

Agency 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 % inc. DAS 30,849 31,046 32,383 32,994 33,795 33,124 7 OUS 13,460 13,590 13,807 14,234 13,720 15,136 12 Total 44,309 44,636 46,190 47,228 47,515 48,260 9 PERS 37,973 42,906 41,872 44,377 46,105 46,739 23

See the problem? If you add the executive branch and higher education numbers, the number of employees increased 9 percent, or nearly 4,000 people from fiscal year 2006 to 2011. If you look at the retirement system figures, it increased 23 percent, or by 8,800 people.   

Also, note that the 2005-06 retirement system number is much lower than that provided by the executive department and university system. Part of the reason for the discrepancy, says PERS spokesman David Crosley, is because university employees can opt for another retirement plan. Otherwise, he said the agency could not not explain the difference in growth.

Let’s turn to the revenue shortfall. Richardson is correct that the revenue that the state estimated it would bring in dropped by $4 billion in that time, from $19.2 billion in March 2008 to $14.8 billion today.

But we also want to point out that for all of 2007 and much of 2008, the forecast hovered around $19 billion. The forecast released in November 2008 was the first to show a drop, and then revenue tumbled from bad to worse.

The executive branch went up, then down, in hiring from mid-2008 to mid-2011, with an overall growth of 0.3 percent. The real increase was in the number of university employees over the same period, 6 percent growth.

Why? Well, when jobs are scarce, more students go to school. And when more students enroll, colleges and universities need more people to teach. That 6 percent growth in hiring corresponded with an enrollment growth from 86,500 to 96,960. (The Office of Economic Analysis has detailed posts on the topic.)

And while some of these new hires may end up in Oregon’s retirement system, remember that they’re financed in large part by student tuition, which isn’t state tax money.   

Finally, we’re going to throw one last batch of numbers at you, this time from the Legislative Fiscal Office, which tracks all branches of state government as well as the universities.

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LFO 2005-07 2007-09 2009-11 2011-13 FTEs 47,900 49,600 51,700 50,500

We give you this additional information not to make your head hurt, but to give you different ways of viewing growth in state government. The increase in "full-time equivalent" budgeted positions is 5 percent, which is not as high as the 23 percent growth recorded by PERS.

We contacted Richardson one last time, and shared our findings. He said he doesn’t have insider information as to why some numbers are higher or lower. But it doesn’t matter to him. The larger point holds: Government is not doing enough to limit costs when revenue is down. State universities, he said, could use technology and other tools to deliver classes more efficiently rather than increase tuition.

"They should not be doing more of the same," he said.

We can’t fault Richardson for using one set of figures to highlight growth, even though other sets suggest the growth has not been as steep. For some taxpayers, that we have more than 48,000 employees in state government and state universities is probably horrifying enough.

Richardson’s underlying point that employment grew during a recession is accurate. In fact, the number of state and university employees is higher than that reported by the retirement system, as of June 30, 2011.

But we downgrade our ruling for two reasons.

The university system, state executive branch, and legislative fiscal office do not report the same magnitude in employee growth that’s reported by the retirement system. The 2005-06 starting point is low when compared with the other sources. We’ve asked the retirement system to explain, and they cannot find an answer.

Also, if some of the increase can be attributed to increased demand at state universities -- where students in large part pay for the new hires --  it seems unfair to blame it all on Democrats’ inability to save. At the very least, that’s an important detail readers should know.

For those reasons, we find his statement that the state added 9,000 employees while revenue dropped $4 billion to be partially accurate, but missing important details. We rate the statement Half True.

Our Sources

Dennis Richardson, "Crisis in Oregon Budget Rebalance?" Feb. 17, 2012
Oregon Public Employees Retirement System: An Agency of the State of Oregon, "Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2006," Dec. 15, 2006
Oregon Public Employees Retirement System, "Actuarial/Financial Information" (web site)
Email from Mark McMullen, Oregon’s Office of Economic Analysis, Feb 23, 2012
Emails from Amy Velez, spokeswoman Department of Administrative Services, Feb. 23, March 16, 2012
Email from Diane Saunders, spokeswoman Oregon University System, Feb. 24, 2012
Voicemail from Dennis Richardson, Feb. 24, 2012
Email and interview with Dennis Richardson, March 12, 2012
Interview with Jay Kenton, Vice Chancellor for Finance and Administration, Oregon University System, March 7, 2012  
Emails from David Crosley, spokesman PERS, Feb. 27, 29, March 15, 2012
Interview with David Crosley, March 14, 2012
Oregon Legislative Fiscal Office, "Budget Highlights 2011-13 Legislatively Adopted Budget," August 2011
Oregon Legislative Fiscal Office, "2009-11 Budget Highlights Update," March 2010
Oregon Office of Economic Analysis blog, "State Education Employment," July 21, 2011
Oregon Office of Economic Analysis blog, "More on Public Sector Employment," July 20, 2011
The Oregonian, "Oregon fears even deeper cuts," Oct. 21, 2008  
Office of Senate President Peter Courtney, "Courtney says forecast signals start of work for 2009 session," Nov. 19, 2008
Office of Gov. Ted Kulongoski, "Governor Calls for Across the Board Reductions to Balance 2007 Budget," Nov. 19, 2008
Office of Gov. Ted Kulongoski, "Statement by Governor Ted Kulongoski on September Forecast," Aug. 28, 2008
Office of Gov. Ted Kulongoski, "Statement by Governor Ted Kulongoski on Revenue Forecast," May 29, 2008

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