Oregon governor eyeing session on pensions, taxes

September 5, 2013
Oregon Gov. John Kitzhaber pauses while announcing in Salem, Ore., Tuesday, that no executions will take place during his term. (Don Ryan/AP)
Oregon Gov. John Kitzhaber (Don Ryan/AP)

Oregon Gov. John Kitzhaber (D) has told state lawmakers to prepare to return to Salem on Sept. 30 to vote on a package of cuts to state government employee pensions and higher cigarette, corporate and income tax increase in order to raise revenue for schools and mental health facilities.

Kitzhaber cleared the Sept. 30 date with state House Speaker Tina Kotek and Senate President Peter Courtney in advance of Thursday’s announcement, the Oregonian reported Wednesday.

Kotek and Courtney haven’t said they have the votes to pass the package. But Kitzhaber said in a statement that time available to pass the bill was running out.

“It’s time to call the question,” Kitzhaber said. “[W]e have a unique opportunity to boost education funding and turn the corner on teacher layoffs and lost school days once and for all.”

The so-called “grand bargain” Kitzhaber is pushing pairs cutting pension costs, a key Republican agenda item, with raising some taxes that Democrats favor. The package would cut long-term liabilities of the Public Employees Retirement System, or PERS, by $5 billion. The tax portion would bring in $200 million in new revenue, according to the governor’s office.

An earlier effort to pass the bill made it through the House. But as time wound down on the regular session, the bill failed in the state Senate by a single vote, despite furious lobbying by business groups.

Oregon law requires a 60 percent threshold in the state legislature to pass a tax increase. One Republican, Hillsboro Sen. Bruce Starr, voted for the package, giving Democrats 17 of the 18 votes they needed in the 30-member Senate. Advocates of the tax increases were pressuring four other Republicans they believed might be persuadable, but all four voted against the measure.

Republicans wanted an additional tax cut for small businesses that Democrats weren’t willing to adopt.

A possible special session could also address a major construction project to build a new light rail and interstate bridge over the Columbia River that would connect Oregon and Washington. The Oregon legislature appropriated $450 million in state funding for the Columbia River Crossing, contingent upon funding approved by the Washington State legislature. But Washington legislators blocked their funding bill, putting the Oregon funding on hold too.

Oregon legislators could strip the bridge bill of its provisions requiring money from Washington if they decide to go forward with the bridge on their own. Kitzhaber told the Associated Press on Thursday he would travel to Washington, D.C., next week to meet with Transportation Secretary Anthony Foxx about the Interstate 5 crossing.

Reid Wilson covers state politics and policy for the Washington Post's GovBeat blog. He's a former editor in chief of The Hotline, the premier tip sheet on campaigns and elections, and he's a complete political junkie.
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