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Action Alert: Prevent Additional Cuts to Public Employees’ Benefits

After months of informal talks with legislators, Governor John Kitzhaber announced Wednesday that state legislative leaders have agreed to a framework for a “grand bargain” featuring additional cuts to public employees’ retirement benefits (PERS), tax increases, and education spending. The governor plans to call a special legislative session on September 30 for lawmakers to discuss and vote on the proposal.

Details of the agreement are still being worked out but the “bargain” appears similar to a bill that failed to pass the legislature during the final days of the 2013 regular session. If the new proposal passes, it would be the second time legislators have cut public employees’ retirement benefits this year.

ONA believes any changes to PERS must be constitutional, should honor the promises made to hard-working public employees, and should be fair for all Oregonians. The current proposal does not meet these criteria.

Major elements of the governor’s proposal include:

Additional PERS Cuts

  • Reduce public employees’ COLAs again (COLAs were already cut by SB 822 which passed earlier this year.)
  • Further reduce PERS benefits by changing how workers’ final average salary is calculated
  • Remove state legislators from PERS

New Taxes

  • Raise the corporate income tax rate
  • Eliminate the personal exemption credit for high-earning individuals and families
  • Limit the number of people eligible for Oregon’s senior medical deduction

2013 – 2015 Spending

  • Invest $140 million in K-12 and higher education
  • Expand the Earned Income Tax Credit (EITC)
  • Increase spending on some senior programs
  • Establish a small business tax break
  • Provide additional mental health funding through a 10 cent increase in Oregon’s cigarette tax
    • The increase in the cigarette tax is the only revenue that is dedicated for a specific purpose after the 2013 – 2015 biennium.

Other

  • Prohibit local governments from regulating genetically modified crops (GMOs).

Any proposed PERS cuts would be in addition to SB 822, which passed the legislature during the 2013 legislative session and reduced PERS workers’ cost of living adjustments (COLAs), ended out-of-state PERS retirees’ income tax benefits and allowed employers to delay some PERS payments. At the time it was passed, SB 822 was estimated to “save” the state $810 million over two years.

Tell your state legislators that any PERS changes must to be constitutional, should honor the promises made to hard-working public employees, and should be fair for all Oregonians. The governor’s “grand bargain” does not meet these criteria.

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