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Senate approves cut to public employee retirement benefits

The Oregon Senate sent the House a short-term pension fix Thursday cutting public employee retirement benefits.

Posted: May 23, 2019 2:24 PM
Updated: May 23, 2019 2:44 PM

By SARAH ZIMMERMAN Associated Press

SALEM, Ore. (AP) — The Oregon Senate sent the House a short-term pension fix Thursday cutting public employee retirement benefits, a politically difficult vote for Democrats who say they were forced to choose between slashing benefits or letting employer interest rates rise.

Ultimately, some who were originally against the proposal reluctantly came around, saying higher interest rates would eat into budgets and lead to layoffs in the public sector.

"My heart is broken today because my back is against the wall," said Sen. James Manning, Jr., a Democrat who voted yes after signaling his opposition earlier this week. "I have two worlds that are colliding today — how do I respond?"

The plan, which the Senate approved by a 16 to 12 vote Thursday, essentially refinances the $25 billion in debt incurred from the Public Employee Retirement System, known as PERS. It extends the state's repayment period from 20 to 22 years, which is meant to shield employers from an impending interest rate hike in the upcoming 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 meant to supplement the public pension.

Sen. Tim Knopp, a Bend Republican, stressed this "is not a permanent solution," and there needs to be more legislative action if the state wants to substantially pay down the debt.

Senate Minority Leader Herman Baertschiger, Jr., who was the public face of a Republican walkout over perceived Democratic inaction on PERS, voted against the measure but said in a statement that it was the "first step to remedying the unfunded liability that has been a detriment to our state."

The plan garnered fierce opposition from unions, who have bashed the idea of cutting benefits since the plan was publicly released a few weeks ago.

"The Oregon Senate has voted to reduce the retirement security and compensation for educators, firefighters and all public employees," said John Larson, President of the Oregon Education Association, the state's largest teacher's union. "These unfair and illegal reductions are a betrayal of Oregon values."

Some Democrats against the measure echoed those comments on the floor, saying that PERS employees — which include teachers, firefighters and child welfare workers — don't have a large enough salary to weather more cuts.

Sen. Sara Gelser, a Democrat from Corvallis, said refinancing the debt only "kicks the can down the road" and that all residents of the state should be responsible for this problem since everyone benefits from public services.

"We should not put that debt on a small group of people," said Gelser. "It's not a fair solution, it's not a real solution."

Oregon Coronavirus Cases

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Cases: 391099

Reported Deaths: 5161
CountyCasesDeaths
Multnomah60298839
Washington41981395
Marion39886506
Clackamas32773378
Lane30113355
Jackson24880360
Deschutes23557185
Umatilla15126180
Linn14637179
Douglas13375291
Josephine10148244
Yamhill9762143
Klamath9053146
Polk8212100
Benton609738
Malheur592487
Coos5664106
Columbia430455
Jefferson420266
Lincoln362152
Union338755
Crook334056
Wasco316146
Clatsop261835
Baker219833
Tillamook216645
Hood River213737
Morrow197525
Curry191939
Harney119933
Grant108515
Lake105416
Wallowa75713
Sherman1913
Gilliam1854
Wheeler1141
Unassigned00

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Reported Deaths: 74473
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Los Angeles152713227166
San Diego4069274335
Riverside3876785358
San Bernardino3745435962
Orange3343985725
Sacramento1683542443
Kern1576621804
Fresno1567952254
Santa Clara1520891925
Alameda1251761504
San Joaquin1075591834
Ventura1040031190
Contra Costa1037721046
Stanislaus915481417
Tulare860871096
San Francisco56909669
San Mateo56320629
Monterey52488626
Solano47671357
Santa Barbara47293549
Merced45053667
Sonoma43168412
Placer42141470
Imperial38477773
Kings35206363
San Luis Obispo31476359
Madera26194311
Shasta26081451
Butte25455314
Santa Cruz22248224
Yolo21558257
Marin18465249
El Dorado18301166
Sutter14571186
Napa13420104
Yuba1076089
Tehama10275130
Humboldt10158119
Nevada10019105
Mendocino857197
Lassen796756
San Benito781578
Tuolumne773090
Lake7043110
Amador577366
Siskiyou474755
Glenn457436
Calaveras441588
Del Norte375542
Colusa325220
Inyo256646
Plumas19367
Mono18784
Mariposa160018
Trinity99717
Modoc7655
Unassigned3220
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