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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

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Reported Deaths: 2756
CountyCasesDeaths
Multnomah40371614
Washington26781248
Marion23425323
Clackamas18932235
Lane13908164
Jackson11535146
Deschutes1001882
Umatilla859387
Linn561181
Yamhill478279
Klamath477678
Polk399356
Douglas388483
Malheur361463
Josephine360672
Benton326522
Jefferson237039
Coos216637
Columbia192129
Union149924
Wasco144430
Lincoln143021
Crook129223
Hood River121633
Morrow115416
Clatsop10589
Baker101115
Curry71011
Tillamook6604
Grant5507
Lake4678
Harney4339
Wallowa1945
Gilliam801
Sherman671
Wheeler351
Unassigned00

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Reported Deaths: 63356
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Riverside3016684627
San Bernardino2992894845
San Diego2818103771
Orange2730575113
Santa Clara1201632188
Kern1107991404
Sacramento1078211736
Fresno1029471724
Alameda896591277
Ventura816611031
San Joaquin747271440
Contra Costa70730813
Stanislaus634971070
Tulare49776849
Monterey43836432
San Mateo42681581
San Francisco37269556
Santa Barbara34613455
Solano33762266
Merced32313478
Sonoma30884317
Imperial28855741
Placer23589299
Kings23195247
San Luis Obispo21421261
Madera16638245
Santa Cruz16246208
Marin14206230
Yolo14160212
Butte12668194
Shasta12630233
El Dorado10396116
Napa1002680
Sutter9663113
Yuba648951
San Benito610963
Lassen578424
Tehama573463
Nevada491975
Humboldt449948
Mendocino434050
Tuolumne421271
Amador374047
Lake356345
Glenn243427
Siskiyou239637
Colusa228418
Calaveras220756
Del Norte14588
Inyo143438
Mono12954
Plumas7366
Modoc5585
Mariposa4657
Trinity4225
Sierra1160
Alpine890
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