Ore. House, Senate pass first pieces of bargain on PERS, taxes

Ore. House, Senate pass first pieces of bargain on PERS, taxes

Credit: Modern Relics

Ore. House, Senate pass first pieces of bargain on PERS, taxes

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by Associated Press

kgw.com

Posted on October 2, 2013 at 5:00 PM

Updated Wednesday, Oct 2 at 5:00 PM

SALEM, Ore. (AP) -- The Oregon Legislature approved the first piece of a five-bill package aimed at lowering public-employee pension costs and raising new revenue for education, mental health and services for seniors Wednesday.

The House on Wednesday passed a measure raising taxes for some businesses and individuals and lowering them for others.

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The Senate backed a lower annual inflation increase in pension checks for retired government workers.

Lawmakers are expected to continue voting through the afternoon, and they still face politically difficult votes.

Gov. John Kitzhaber and senior legislators spent much of Monday and Tuesday ironing out details and lining up votes for a deal they say would deliver badly needed money for education and other services.

The plan is projected to save millions of dollars in employee retirement costs for state and local governments and generate about $200 million in new revenue over the next two years. Most of the money would go to primary and secondary schools, but some would go to higher education, services for seniors and mental health care.

Kitzhaber reached an agreement with legislative leaders on Sept. 18 and called lawmakers into special session starting Monday. The governor had hoped to work out the kinks and line up votes ahead of time, but the quick time frame left several key sticking points needing to be bridged.

In private meetings, Republicans and Democrats debated largely technical points, such as how to ensure that a tax break for small businesses doesn't become too costly and how to define which businesses should qualify.

Many lawmakers were reluctant to vote so quickly on some of the bills, particularly the complicated tax and pension measures.

The proposed pension cuts would reduce the annual inflation increase in retirees' checks, from 2 percent to 1.25 percent on the first $60,000 in income and to 0.15 percent on any additional income.

Under the tax changes, higher income individuals and certain businesses would face a higher tax bill. Cigarette and tobacco taxes would go up. Some low-wage workers and certain types of businesses would see a lower tax bill.

Local governments would be prohibited from regulating seeds and seed products. The measure is an attempt to supersede increasing efforts by environmentalists and organic food proponents to ban genetically modified crops at the county level in response to what they see as a lack of action by the state and federal governments.

Proponents say the changes are needed to free up money for struggling schools. Critics include public employees who say the state shouldn't be taking benefits promised to retirees, and environmentalists who say a measure on genetically modified crops has no place in the deal.

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