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Oregon panel backs Democratic proposal for pension cuts

SALEM — 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 House and Senate as soon as this 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 recession erased 27 percent of the pension fund in 2008, requiring steep increases in taxpayer contributions to make up the difference.

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.

“We can either fix it or tweak it,” said Sen. Fred Girod, R-Stayton. “I favor fixing it.”

Two Republicans, Reps. Greg Smith of Heppner and Bob Jenson of Pendleton, opposed the measure for another reason. They said the state had an obligation to keep promises.

“Where I come from in Eastern Oregon, when you give your word you keep it,” Smith said. “Good or bad, you keep it.”

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

Even if the bill squeaks through the House and Senate in the coming days, the debate over pensions is far from over.

Sharp disagreements remain, even among Democrats, about how much cutting is sufficient. Urging legislators from both parties to support the pension bill Friday, Sen. Alan Bates, D-Medford, said the debate isn’t over.

“There’s room for more movement here, but this is just the first bite at the apple,” Bates told the Ways and Means Committee on Friday. “This is not the end of the session.”

Bates’ conclusion is at odds with Democratic speaker Tina Kotek, who has drawn a hard line, saying she has no interest in cutting pensions any more than Democrats have already proposed.

Copyright 2013 The Associated Press.

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