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.

Confirmed Cases: 4302

Reported Deaths: 154
CountyConfirmedDeaths
Multnomah117159
Marion97326
Washington74317
Clackamas31711
Deschutes1270
Umatilla1203
Linn1179
Polk10012
Lane773
Yamhill707
Jackson670
Benton555
Clatsop450
Jefferson440
Klamath440
Malheur320
Coos310
Douglas270
Wasco241
Josephine241
Hood River180
Columbia160
Lincoln150
Morrow120
Curry70
Union60
Tillamook60
Crook60
Wallowa20
Lake20
Sherman10
Harney10
Grant10
Baker10
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 114733

Reported Deaths: 4217
CountyConfirmedDeaths
Los Angeles560112386
Riverside7982331
San Diego7481269
Orange6474147
San Bernardino5355204
Alameda347096
Santa Clara2776141
San Francisco257043
Kern232238
San Mateo216584
Tulare189789
Imperial175129
Fresno174335
Santa Barbara164912
Contra Costa146838
Sacramento142958
Ventura115234
Kings11225
San Joaquin90834
Stanislaus74429
Sonoma5644
Monterey54510
Solano51722
Marin48314
Merced2837
San Luis Obispo2711
Santa Cruz2172
Placer2179
Yolo21124
Napa1133
Madera1062
Humboldt1013
El Dorado960
San Benito872
Butte510
Del Norte460
Sutter462
Nevada411
Shasta394
Mono371
Yuba301
Mendocino300
Lake210
Inyo201
Mariposa161
Glenn160
Calaveras150
Amador100
Siskiyou70
Colusa70
Lassen50
Plumas40
Tuolumne40
Tehama41
Alpine20
Sierra10
Trinity10
Unassigned00
Medford
Clear
70° wxIcon
Hi: 80° Lo: 50°
Feels Like: 70°
Brookings
Clear
59° wxIcon
Hi: 68° Lo: 50°
Feels Like: 59°
Crater Lake
Clear
60° wxIcon
Hi: 70° Lo: 45°
Feels Like: 60°
Grants Pass
Clear
68° wxIcon
Hi: 78° Lo: 49°
Feels Like: 68°
Klamath Falls
Clear
60° wxIcon
Hi: 69° Lo: 43°
Feels Like: 60°
Warm Monday, isolated showers
KDRV Radar
KDRV Fire Danger
KDRV Weather Cam

Community Events