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The Oregonian: Health care and retirement make Oregon teachers pricey
Author: By Ted Sickinger, The Oregonian
Posted: June 12, 2017

Read the article in The Oregonian

High health insurance and retirement costs make teachers more expensive in many Oregon school districts than in Vancouver or Boise, according to a new study by Portland State University's Center for Public Service.

And that disparity is likely to worsen as public employers' retirement costs in Oregon jump higher in the next five years to bail the state pension system out of its $22 billion funding deficit.

The study comes at a time when Oregon legislators are looking to trim both health care and retirement costs for public employees in their efforts to close a $1.4 billion budget shortfall. It is the latest of several studies from the Center for Public Service looking at public employers' compensation costs

The study examined total employer compensation costs for K-12 teachers in five Oregon school districts (Portland, Beaverton, Hillsboro, Lake Oswego and Salem-Keizer) and compared them to two districts in Washington (Vancouver and Seattle) and one in Boise,Idaho.

The costs included salary, health insurance, retirement costs and paid time off. The study compared them at three separate stages in teachers' careers: entry level with a bachelor's degree, a mid-career teacher with a master's degree, and a 30-year teacher with a master's and additional graduate credits.

Total compensation costs differed little among the five Oregon districts and were comparable to Seattle's, the study found, but were 20 to 30 percent higher than in Vancouver or Boise. 

Entry-level salaries were comparable across all districts but Seattle, which paid 10 to 15 percent more than the others. Seattle's tech boom has made it one of the most expensive cities in the nation.

Salary differences among more experienced teachers were more pronounced across the regions studied, but salaries accounted for the smallest portion of the differences in total compensation costs.

The biggest driver was employer-paid health insurance, which was consistently highest in Oregon. The study said the cost of that coverage ranged from $13,569 in Hillsboro to $18,713 in Lake Oswego. That compares to $10,016 in Seattle, $9,360 in Vancouver and $7,320 in Boise.

Retirement costs get a lot of attention in Oregon, as they are set to jump in each of the next three two-year budget cycles. The study looked at current costs, so it didn't take those increases – set to begin in July - into account. Districts in Washington and Idaho are not facing those increases.

Still, even as it stands today, the annual retirement costs for a mid-career teacher in in Oregon ranged from $12,065 in Portland to $16,473 in Salem Keizer. Retirement costs in Seattle were at the low end of that range, $12,058, while Vancouver and Boise were much lower at $9,562 and $9,145, respectively.

The study noted that total retirement costs for some districts in Oregon could jump to 40 to 45 percent of salary within 5 years, which would imply retirement costs of about $30,000 a year for a mid-career teacher.  

Phil Keisling, a democrat who served as Oregon Secretary of State from 1991 to 1999 and now directs the Center for Public Service, noted that Oregon is already known for having the 5th highest class sizes and one of the shortest school years in the nation.

When health care and retirement cost trends are added with average salaries in Oregon districts, he said in a news release, "Oregon within the next 5 years could also have some of the highest (total compensation costs) in the U.S. for comparable teachers."