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After tight vote, governor to get pension reform bill

After looking like it would fail, the Oregon House was able to narrowly send the governor a proposal Thursday that would rein in rising pension costs by trimming public employee retirement benefits.

Posted: May 31, 2019 10:00 AM
Updated: May 31, 2019 10:15 AM

By SARAH ZIMMERMAN Associated Press

SALEM, Ore. (AP) — After looking like it would fail, the Oregon House was able to narrowly send the governor a proposal Thursday that would rein in rising pension costs by trimming public employee retirement benefits.

Lawmakers initially voted down the proposal Thursday 31-29 with nine Democrats and all Republicans voting against. The chamber remained in suspense for over a half an hour as legislative leaders called a recess to convince defecting Democrats to change their votes.

In the end, Reps. Andrea Salinas and Mitch Greenlick returned to the floor and, without comment, switched to a "yes" vote, sending the measure to Gov. Kate Brown who has indicated she will sign the measure.

The measure aims to shield public employers from the effect of pension rate increases set to take effect in 2021, which many fear would lead to tens of millions of dollars in costs for the public sector.

In an impassioned speech, Democratic Rep. Paul Holvey, who carried the measure on the floor, blasted lawmakers for refusing to take action on the rising costs of the Public Employee Retirement System, or PERS, which has racked up over $25 billion in state debt.

Holvey said that instead of raising taxes to invest in the public sector, lawmakers have instead done nothing. The resulting rise public employer cost from that inaction has led to smaller budgets, layoffs and reduced services, he said.

"This body, since I've been here, has not done anything meaningful to raise revenues to stem the spiraling down in Oregon that's not just impacting our public services but impacting our whole economy," he said.

Now, in order to mitigate the effect of rising pension costs set to hit employers in 2021, Holvey said legislators are left with two incredibly difficult choices: redirect retirement benefits or do nothing and let employer rates continue to increase, which could lead to even more layoffs and reduced services.

"I'm frustrated and it hurts me to have to look at a redirect," he said. "But we have to pass something to stem this."

The plan essentially refinances the PERS debt, extending the state's repayment period from 20 to 22 years. More controversially, the measure also redirects 2.5% of employee salary toward PERS. That translates to a 7 to 12% cut to employees' secondary retirement account, which is a 401(k) type plan that supplements the public pension.

The proposal is expected to save school districts tens of millions of dollars, according to data provided from the Speaker's Office. Portland Public Schools, for example, would save over $50 million in the 2021-2023 biennium.

But public employees — which include teachers, firefighters and child welfare workers — fiercely oppose the idea, saying that the state is forcing workers to pay for a problem they didn't create.

"The Oregon House took a vote today that is anti-worker and will have the deepest impact on women and people of color by reducing the promised retirement security of public service," said Tom Chamberlain, President of Oregon's AFL-CIO. "Oregon's union movement will continue to fight to protect the compensation of all workers and against these types of harmful cuts."

Opponents also said the measure doesn't make any meaningful efforts to pay down the debt, and that lawmakers will still have to return to the Capitol and confront this issue again in a few years.

Some Republicans and Democrats echoed that sentiment on the floor, with many saying the reform isn't substantial enough and that they made a promise to public employers not to cut benefits.

A statement from the governor's office said that the legislation stabilizes PERS rates and that, "going forward, Gov. Brown will not look to public employees for further contributions." She will instead look for other sources to pay down the debt, according to the statement.

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 387485

Reported Deaths: 5116
CountyCasesDeaths
Multnomah59768836
Washington41571393
Marion39592504
Clackamas32426376
Lane29856354
Jackson24672350
Deschutes23182185
Umatilla15087180
Linn14488178
Douglas13236286
Josephine10057240
Yamhill9665142
Klamath8979145
Polk813698
Benton605137
Malheur591586
Coos5573106
Columbia423855
Jefferson416865
Lincoln357252
Union336854
Crook330156
Wasco314846
Clatsop258335
Baker217531
Tillamook214345
Hood River211337
Morrow197025
Curry190136
Harney119332
Grant108314
Lake104016
Wallowa74713
Sherman1903
Gilliam1844
Wheeler1141
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Cases: 5061240

Reported Deaths: 74159
CountyCasesDeaths
Los Angeles152548627128
San Diego4047084319
Riverside3849455306
San Bernardino3718825944
Orange3329505675
Sacramento1674002423
Kern1565171781
Fresno1558992246
Santa Clara1511691922
Alameda1246581504
San Joaquin1070001833
Ventura1036461188
Contra Costa1032921045
Stanislaus912991413
Tulare856141082
San Francisco56614669
San Mateo56058629
Monterey52340625
Solano47422356
Santa Barbara47035548
Merced44807664
Sonoma42912412
Placer41881468
Imperial38128769
Kings35038358
San Luis Obispo31294358
Madera26005311
Shasta25917440
Butte25295309
Santa Cruz22028222
Yolo21451257
Marin18342248
El Dorado18166161
Sutter14494181
Napa13372104
Yuba1070088
Tehama10230129
Humboldt10043117
Nevada9914103
Mendocino848894
Lassen792355
San Benito775977
Tuolumne767790
Lake6990110
Amador573766
Siskiyou470954
Glenn455136
Calaveras435685
Del Norte371242
Colusa323519
Inyo254345
Plumas19127
Mono18294
Mariposa156718
Trinity98817
Modoc7475
Unassigned2430
Sierra2170
Alpine1060
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