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Entries in PERS (11)

Friday
Oct042013

Kitzhaber, Courtney Legacies Grow

The successful five-bill, three-day Oregon special legislative session will enhance John Kitzhaber's legacy as governor. It also signals a constructive working relationship between House Speaker Tina Kotek and GOP Leader Mike McLane. And the session provided campaign platforms for Reps. Dennis Richardson and Jules Bailey.

Almost lost in the shuffle was Senator Peter Courtney's win in establishing a dedicated funding source for expanded community mental health programs, which was his top priority before the start of the 2013 regular legislative session.

News coverage of the conclusion of the special session Wednesday showed a beaming Kitzhaber. For good reason. He took the tatters of a budget deal left on the cutting room floor in the waning hours of the regular session and wove them into a complicated deal that will result in more money going to K-12 schools and higher education. 

Kitzhaber's unwavering confidence he could find common ground among skeptical House Democrats and legislative Republicans stands in sharp contrast to his defeatist views expressed at the end of his second term of governor. His third term has been an unbroken string of negotiating successes that prove Oregon can be governed after all. And he gets much of the credit.

The Oregonian's Friday edition challenged Kitzhaber now to turn his attention and political capital to comprehensive tax reform, a goal that has eluded him as well as many of his predecessors. Hopefully, The Oregonian will forgive Kitzhaber if he takes the weekend off before starting his new quest.

The Kotek-McLane tandem held together well and under extreme political pressure. To make the multiple-bill compromise work, all five bills had to pass for any to survive. Kotek and McLane knew it would take different cross-sections of lawmakers from both party caucuses to pass the most controversial measures dealing with taxation, PERS cuts and a local pre-emption on genetically modified crops.

Only 22 out of 90 lawmakers voted for all five measures. Kotek and McLane were two of them. More important, they showed they could deliver key votes when it counted. The tax measure, a combination of increases and cuts, began in the House and came up three votes short. Kotek delayed declaring the final vote until she mustered three votes — all from her Democratic caucus.

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Wednesday
Sep252013

All for One, One for All

One of the under-reported features of the Grand Bargain is the "everything must pass or nothing passes" part of the agreement.

That was always the implicit understanding when the grand bargain involved public employee retirement reductions and tax increases to generate more money for K-12 schools. 

But the deal has expanded to include small business tax cuts and a local pre-emption on genetically modified crops. That expansion has altered the political math. 

First, a quick lesson about Oregon legislative procedure, which doesn't allow multi-subject omnibus bills. Congress can stuff Brussels sprouts and brownies into the same legislative stew so there is something to like for almost everybody. In Oregon, lawmakers pretty much have to vote on each major provision separately.

Now back to the grand bargain. It appears to require five bills — two to trim PERS benefits, one to raise taxes and provide for a small business tax cut, one for the GMO pre-emption and one to appropriate money for K-12 schools, other educational institutions and community mental health. 

For legislative Republicans, all of those are sweet votes. For legislative Democrats, three of the five cut against key constituencies — public employees and environmental groups opposed to pre-empting local bans on GMO crops. 

Much has already been written about the give-and-take on PERS cuts and tax hikes. A deal was close during the 2013 regular session, but didn't quite make it over the finish line, in part because it failed to include small business tax cuts pushed by GOP Senators Larry George and Brian Boquist.

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Wednesday
Sep182013

Sausage-Making in Full View

Watching a special legislative session is unavoidably like watching sausage being made, with all the ingredients spilled on the political table in full view.As the saying goes, it may be best not to see either laws or sausages being made. But that is hard to avoid when contemplating a legislative special session.

Governor Kitzhaber has hosted Oregon legislative leaders at Mahonia Hall this week to barter a deal to make deeper cuts in public employee retirement spending and raise taxes on large corporations and wealthier Oregonians to pump more money into K-12 education, higher education and mental health care. 

The so-called grand bargain Kitzhaber seeks isn't new. It was debated in the regular legislative session but never quite got enough political traction. 

Gaining political traction often requires introducing new components into the policy machinery. Senate Republicans, for example, want to include a tax cut for businesses that file as S corporations. The idea goes in the opposite direction of raising money, but at least it involves taxation.

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Tuesday
Jul302013

5 Pitfalls to Avoid for Successful Special Session

Governor Kitzhaber is making headlines as he tries to put together a deal on PERS cuts and revenue enhancement for legislative consideration in a special session sometime this fall.

Trying to find a legislative path to increase revenue or change PERS is tough enough during a regular session. To assemble a deal on both — in the interim — and call legislators back into special session to pass it is a herculean task at best.  

Kitzhaber's track record of success on big ticket items, along with his depth of experience in Oregon policymaking, gives him a head start, but there are at least five key pitfalls he should avoid as he traverses this difficult path.

1. 45 to 36, 23 to 18 — Oregon law requires 36 votes in the House and 18 votes in the Senate to pass any measure that raises revenue. But the math is never that simple when it comes to finding enough votes to pass a revenue raiser. A good rule of thumb is it will take three-fourths of the body in favor of a measure to find the three-fifths necessary to pass it. Kitzhaber has a lot of votes to find to pass this conceptual package.

2.  Special sessions aren't short, regular sessions — A special session is not just a short version of a regular session; it's a horse of a completely different color. Unlike regular sessions, the only bill (or bills) at stake are the topics for which the session is convened. Rank-and-file legislators generally have little to do but vote and are prone to a particular version of grumpiness about a lack of shared information and/or decision-making about the bills in play. Most important, individual members do not have individual bills at stake, making negotiations on the central issue even more difficult. No one knows this better than Kitzhaber, who was part of five special sessions in 2002.

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Friday
Jun142013

Budget Stalemates in Olympia and Salem

Lawmakers in Washington and Oregon haven't found the answer to balancing their states’ budgets with more funding for K-12 schools. Now time is running out.The economy is improving and tax revenues are up, which should make it relatively easy to balance the budget. But Oregon and Washington lawmakers are finding it anything but easy.

The Oregon legislature, which planned to adjourn by the end of June, is bracing to grind on until July. The Washington legislature just completed its first special session, which The Columbian summarized in a tweet as "30 days, 0 bills, $77,000 in per diems."

Lawmakers in both states are hung up on how to get more money for K-12 schools. 

In Olympia, lawmakers face a court mandate to increase K-12 school funding, but can't agree how to do it.

In Salem, Democrats and Republicans have failed to reach agreement on deep enough cuts to the Public Employees Retirement System and new revenue. The Oregon Senate, which Democrats control by a slim 16-14 margin, is stymied because Senator Chris Edwards, D-Springfield, has balked at passing a large enough K-12 school budget to avoid more teacher layoffs and school day reductions.

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Thursday
May162013

Negotiator-in-Chief Issues Challenge

In a rare pre-May forecast press conference, Governor Kitzhaber challenged lawmakers to agree to a grand bargain on PERS and new tax revenue or face a shriveled budget for education. He also called on lawmakers to take a bipartisan look at tax reform.

In his third term, Kitzhaber has become known for his keen negotiations skills that have helped to ensure bipartisan passage of his major policy initiatives during the last two sessions.

His methods have included bipartisan legislative leadership meetings at Mahonia Hall, weekly meetings with presiding officers, one-on-one diplomacy with key members, attending caucuses of both parties and, when necessary, public pressure to break logjams in negotiations. He clearly resorted to the latter yesterday.

Signaling that the legislature is at a crossroads and faces a “partisan impasse,” the governor used his public “bully pulpit” to call on legislative leadership to take on two major challenges:

 

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Tuesday
Jan292013

A Grand Bargain on PERS, Public Safety

Oregon lawmakers settle in for real Monday and will quickly see, if they haven't already, that the 2013 session pivots on the outcome of two tough political decisions — modifying PERS and public safety reforms.

The legislature's only absolute duty is to approve a balanced budget and Governor Kitzhaber has teed up that task on the backs of saving a lot of money on PERS and new approaches to managing public safety. He also wants to slow the rate of growth of Medicaid and save $400 million in projected health care costs in the next biennium.

Squeezing money out of Medicaid rests on the ability of hospitals, doctors and health systems to, in Kitzhaber's words, "bend the cost curve" of the health care delivery system. But squeezing money out of PERS and Oregon’s public safety system falls squarely on the shoulders of legislators.

If there ever was a need for a grand bargain, this is it.

That's undoubtedly why legislative leaders have created a bipartisan, bicameral committee with equal numbers of Democrats and Republicans to address the public safety reforms — or, in legislative parlance, to provide both parties with political cover on what surely will be tough votes.

Leaders know there will be hell-no votes on both issues in both Democratic and Republican caucuses. Bipartisan majorities will be required if PERS and public safety changes are going to pass this session.

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Monday
Jan072013

7 Things to Watch for in the 2013 Legislature

Oregon lawmakers are trekking to Salem for the start of the 2013 legislative session next week, which will feature heavy-duty issues such as education funding, higher education restructuring, health care transformation, prison sentencing, PERS reform, gun control and funding for a new I-5 bridge over the Columbia River.

Here are seven things to look for as the new session unfolds:

1. Leadership – New versus old 

The three key leaders in the House — Speaker-Elect Tina Kotek, Majority Leader Val Hoyle and Minority Leader Mike McLane — are all new to their posts. They worked together during the historic 2011-2012 power-sharing sessions, but how they relate to each other in this new environment with Democrats in control will be worth watching — and may very well determine whether some big issues will move or stall.

Across the building, Senator Peter Courtney will be sworn in for a historic 6th term as Senate President. Joined by Majority Leader Diane Rosenbaum and Minority Leader Ted Ferrioli, this team has worked together and knows how to negotiate in the tight corners of narrow Democratic control. 

2. Pace of the Session 

The budget has always set the pace of legislative sessions in Oregon. With one of the most experienced Joint Ways and Means co-chair teams in decades, the budget-writing committee possesses the know-how to make early decisions and move the session along quickly.

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Thursday
Nov082012

The Results of Election Results

As Monday morning quarterbacks dissect Tuesday's election results, political operatives are busy figuring out what can happen as a result.

By virtue of Democrats reclaiming the Oregon House with a projected 34-26 margin, one party now controls both houses of the legislature, the governorship and other statewide offices. Questions abound on whether that is good or bad for various issues.

For example, will Democratic control throttle any effort to stem rising Public Employee Retirement System changes, which are squeezing K-12 schools, state agencies and local government? Public-employee-union financial and grassroots support played a major role in giving Democrats a majority in the House and may frown on any major changes.

Or, will the advent of Rep. Tina Kotek, D-Portland, as Speaker of the House help the sagging fortunes of the Columbia River Crossing project, which she strongly supports? Clark County voters dealt the latest blow by rejecting a funding measure for the extension of light rail north of the Columbia River.

And, will the legislature feel empowered to tackle thorny issues such as liquor privatization, marijuana legalization and same-sex marriage to forestall proposed initiative drives in 2014? Washington action on all three subjects could serve as motivation, as well as pressure on Kotek, who is poised to become the first lesbian Speaker of the House in the nation.

Add to that stew the frothy ingredients already on the table, including a set of expiring health care taxes, K-12 reform proposals, early childhood learning recommendations, postsecondary institutional aspirations and prison sentencing options. Not to mention a simmering concern — and debate — about how to stimulate job creation, which ranks highest on most voter priorities.

It does seem obvious that tax reform, the subject of a work group named by Governor Kitzhaber, will be an unlikely topic in the 2013 session. There isn't enough agreement in the work group, let alone among voters, and there may not be enough time to tackle the topic in an already congested 6-month legislative session.

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Friday
Jun222012

The $1 Billion Elephant in the Room

Rep. Shawn Lindsay, R-Hillsboro, tweeted about it and coffee shop conversations clucked about it. Oregon public employers will have to cough up an additional $1 billion per biennium to keep up with financial demands of the Public Employee Retirement System (PERS). That will mean fewer teachers, firefighters and health care workers.

Ted Sickinger's account in The Oregonian reminded voters, public workers and policymakers that rising contributions to an underfunded PERS is the biggest single factor squeezing public budgets. According to Sickinger's report, PERS controlled $54.7 billion in assets in 2011, but that only covers 73 percent of its liabilities.

James Dalton, who chairs the PERS board, told Sickinger: "We have a $16 billion unfunded liability. The question isn't if you're going to pay. The question is when you're going to pay."

It isn't hard to see a connection between rising pension payments, along with spiraling health insurance premiums, as reasons for a declining public workforce. Data indicates nearly 250,000 public sector jobs were axed in 2011, with more cuts expected this year. Almost half of the public employment losses in 2011 were laid-off teachers.

There are 656,000 fewer public sector jobs than in pre-recession 2008. Economists say shrinking public payrolls create a drag on U.S. economic recovery by negating private-sector job gains.

The Oregon legislature has tried to curb public pension liabilities, but some of its legislative remedies have been struck down in court for effectively breaking the contract with public employees by changing terms of their retirement. Public employees say they gave up pay increases many times in return for longer-term pension benefits

That strategy, which was pursued in most states and at the federal level, now may be coming home to roost. Forest Grove School District Business Manager Mike Schofield estimated 30 percent of the district's budget goes to retirement benefits. Sickinger's story suggested the additional PERS burden amounts to $700 per household.

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