Panel backs Dems’ proposal for pension cuts

SALEM, Ore. — The budget committee of the Oregon Legislature approved a Democratic bill curbing pension benefits for public employees in a party-line vote Friday, paving the way for decisions in the full House and Senate as soon as next week.

Republicans complained that the bill is a timid approach that won’t give taxpayers enough relief from significant increases in pension costs. Democrats are also feeling heat from the left as public-employee unions say it would illegally violate a contract they have with the state.

“I think we’ve united the entire state, all sides, in dislike of this proposal,” said Rep. Peter Buckley, an Ashland Democrat and an architect of the pension-cutting bill. “But again, we stand by it because we do believe it is balanced and fair.”

Severe investment losses during the Great Recession erased 27 percent of the pension fund in 2008, requiring steep increases in taxpayer contributions to make up the difference and limiting money available for state and local government services.

The Democratic proposal would reduce cost-of-living increases in retirement checks on a graduated scale and eliminate supplemental tax payments for retirees living outside Oregon. It also would push $350 million worth of payments into future years.

“I would hope people would understand we’re taking these actions to ensure people will be receiving their benefits long into the future,” said Sen. Richard Devlin, D-Tualatin, the Senate’s budget chief and a driving force behind the Democratic pension plan.

Republicans offered their own plan that would have further cut pension benefits, saving more money, and criticized the Democratic plan to defer pension contributions into future budget cycles. They said only a substantial reform of the pension system will prevent the need for more cuts in the future.

Gov. John Kitzhaber has pushed for steeper cuts, but his office says he’ll sign the Democratic bill if it reaches him.