- Associated Press - Monday, June 5, 2017

SALEM, Ore. (AP) - Oregon lawmakers on Monday rolled out two proposals aimed at reining in government spending and close the state’s upcoming $1.4 billion deficit by at least $141 million over the next two years.

The cost-containment bills, Senate Bills 1067 and 1068, come with just a month or so remaining in the 2017 legislative session in Salem.

When fully implemented over the next four years or so, the two cost-curbing bills are estimated to save an estimated $1.1 billion total system-wide, which includes, but not limited to, savings for the state’s lottery and general funds.

The savings would come from changes to public employee pensions, health care and other practices, such as eliminating vacant positions that are open for longer than six months and nixing automatic inflation increases to service and supply costs.

Cost containment as well as a tax hike on businesses similar to, but more moderate than, the failed Measure 97 have been at the center of a dispute over the budget between Democrats and Republicans.

But Senate President Peter Courtney, a moderate Democrat, says he won’t advance at least one of the bills, SB 1068, without passage of a “significant revenue package” that needs Republican support due to the three-fifths supermajority requirement in both chambers.

“We’ve worked all session to get to this critical point. It’s time to close the deal,” Courtney said in a statement.

SB 1068, which Courtney says was drafted with input from public employee unions on condition of new corporate tax revenue, is the pension reform proposal that’d redirect a portion of public employees’ 6 percent contribution - a separate retirement account that most employers or unions, rather than employees themselves, pay - into the pension system.

The 6 percent “pick up” by public employers is on top of their financial obligations to the pension system, which is facing a $22 billion unfunded liability. In 2015, the Service Employees International Union Local 503 negotiated a 6.95 percent pay raise for about 20,000 public employees in exchange for their employer no longer paying their 6 percent retirement contribution. Under SB 1068, Democratic House Speaker Tina Kotek says salary increases could also be negotiated.

Courtney’s conditions on passing tax reform ahead of pension reform disappointed Republican House Minority Leader Mike McLane, who said he was otherwise encouraged overall by the cost containment effort.

“The first step in solving any problem is admitting that you have one … whether this package does enough to contain costs over the next decade remains to be seen,” McLane said.

Republican Senate Minority Leader Ted Ferrioli says the effort doesn’t go far enough, noting that pension obligations jumped by $315 million in the current cycle alone.

“This is ‘PERS Reform-Lite,’ not the robust restructuring needed to protect the long-term financial solvency of PERS, and by extension, Oregon herself,” Ferrioli said in a statement.

The second bill, SB 1067, will have its first public hearing Friday.

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