By Ted Sickinger
This is a breaking news story and will be updated.
In an emotional vote on the House floor Thursday, lawmakers approved legislative leaders’ controversial bill to rein in escalating pension costs on a 31-to-29 vote after initially voting the bill down 29-to-31.
House Democrats took a 20 minute break, with House Speaker Tina Kotek leaving the chamber — apparently to twist a few arms. When she returned, grim-faced, two Democrats changed their votes and Senate Bill 1049 passed. Rep. Andrea Salinas, D-Lake Oswego, left Kotek’s office with tears in her eyes before changing her vote, according to a tweet by OPB.
At its core, lawmakers’ financial plan depends on kicking the system’s $27 billion deficit down the road by extending the minimum payment schedule for another eight to 10 years. That accounts for about three-quarters of the $1.2 billion to $1.8 billion in savings Senate Bill 1049 is expected to generate per two-year budget cycle beginning with the 2021-23 biennium
But the bill also includes controversial employee cost-sharing provisions that would redirect a portion of the retirement contributions employees currently make to a supplemental 401K-like savings plan. Instead, some of those contributions — 2.5 percent of pay for employee hired before August 28, 2003, and 0.75 percent of pay for employees hired after that date — would go into an account that would support pension benefits.
That provision would trim a 30-year employee’s overall retirement benefits by 1 percent to 2 percent of pay. It doesn’t apply to employees making less than $30,000 a year, and the redirection would cease if the pension fund regains a funded status of more than 90 percent.
The measure is anathema to employees and unions, who call it unfair and unbalanced.