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Oregon: Democratic pension cuts on fast track

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SALEM, Ore. (AP) — A Democratic plan to curb retirement benefits for government workers could reach Oregon Gov. John Kitzhaber’s desk by the end of next week.

The Legislature’s budget committee is scheduled to vote Friday to advance the pension-cutting bill, setting the stage for votes in the full House and Senate. Kitzhaber’s office says the governor will sign it.

Republicans vow to oppose the effort, saying it’s too paltry to effectively deal with rising pension costs.

Democratic leaders have proposed limiting the annual inflation increases in retirees’ checks in order to boost spending on schools. They also want to eliminate, for retirees living out of state, surplus pension payments that cover state income tax bills. Altogether, their proposal would save state and local governments $460 million over the next two years and push another $350 million worth of pension contributions into future budget cycles.

Kitzhaber, also a Democrat, has proposed $860 million in pension cuts, and Republicans have various proposals to save at least $1 billion.

Kitzhaber spokesman Tim Raphael offered tepid support to the Democratic bill.

“It’s a good start,” said Raphael said.

The disagreement over pension cuts is already setting up a showdown over the next major piece of the Democratic budget proposal — $275 million in new tax revenue.

Democrats have a majority in the House and Senate, but raising revenue requires a three-fifths supermajority. If all Democrats support it, they’ll need at least two Republicans in each chamber to raise revenue.

The Democrats have yet to detail their plans, but Senate Republicans say they’ll only give their support for tax increases if Democrats allow deeper pension cuts.

House Speaker Tina Kotek says she’s not willing to cut any more from pensions.

“I’m personally not open to any changes,” she told reporters earlier this week, saying the Democratic proposal is the fairest to workers and most likely to survive a court challenge.

Someone’s going to have to cave for the revenue increases to pass.

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