We recently learned that Oregon has $560 million more in resources than expected this biennium.

This is good news, but legislators should be cautious about going on a spending spree.

We also recently learned that the Public Employees Retirement Fund has posted its second consecutive year of mediocre returns at 5.98% after losing 1.55 percent in 2022. Somehow the Oregon Investment Council managed to miss one of the biggest increases in financial markets in years.

Compounding the problem, state payrolls over the last two years have soared by nearly 13 percent, more than PERS actuaries anticipated.

The double whammy of mediocre returns and rapidly inflating payrolls is causing actuaries to predict that PERS will need to sop up about $6 billion in 2025-2027, hundreds of millions more than in the current biennium.

But even $6 billion just barely keeps the system’s head above water. That’s only half the amount that will be paid out in pensions during the same period, putting more pressure on PERS investments to make up the difference.

All eyes should be on the Oregon Investment Council in the coming year. One more year of poor returns will really turn up the heat on the PERS Board to bring yet more millions into the system.

For now, the legislature would be well-advised to be very cautious with found money. PERS can be a very hungry beast.