Oregon Senate panel backs pension, taxes bills

SALEM, Ore. (AP) An Oregon Senate committee on Friday advanced two bills that would increase tax revenue and cut deeper into retirement benefits for public employees.

Democrats on the Finance and Revenue Committee approved the measures in a party-line vote, setting the stage for votes in the full Senate. It was an early step toward a potential compromise between Republicans and Democrats that would increase funding for schools, senior services and mental health, but the prospects are uncertain amid opposition from Republicans and some Democrats.

It's not clear whether the tax-increase bill has the supermajority needed to pass the Senate, which would require at least two Republican votes if all 16 Democrats were in favor.

Senate Democrats portrayed the twin bills they were taking up Friday as part of a "grand bargain" that would increase funding for schools, senior services and mental health, but Republicans objected to that characterization.

"I'm not sure exactly who this grand bargain is with," said Sen. Larry George, R-Sherwood.

Democrats said they were disappointed Republicans opposed the pension bills after months pushing for steep cuts in benefits under the Public Employees Retirement System. GOP lawmakers have complained that the Democratic pension proposals fall short of the needed savings.

"I'm fairly appalled that people who wanted deeper cuts to PERS today don't support that anymore," said Sen. Diane Rosenbaum of Portland, the No. 2 Democrat. Rosenbaum indicated she may vote against the bill on the floor out of concern for the impact on retirees.

The revenue bill would increase cigarette taxes by 10 cents per pack, raise corporate income tax rates for revenue above $2.5 million and limit access to personal income tax exemptions for higher-income taxpayers. It would also restructure a tax deduction for seniors' medical expenses.

The pension bill would cut inflation increases for all retirees beyond the level they were cut to earlier this year. It also would change one of the methods for calculating pension payments, affecting only former employees who haven't worked for the government since 2004 but aren't collecting benefits yet.

The Senate vote could come as soon as Saturday but is more likely to be early next week.

Aside from the budget, lawmakers raced to finish legislative business before Independence Day.

The House voted for a measure that would allow some Oregon schools to keep Native American mascots, nicknames and logos a bill the governor is threatening to veto. The measure would reverse a decision by the state Board of Education to outlaw Native American mascots beginning in 2017. The bill would allow schools to keep their Native American mascots if they reached a written agreement with the nearest Indian tribe. The measure now goes to the Senate.

The Senate approved a measure that would toughen penalties for people who pay for sex with minors. The bill is part of a broader effort to crack down on child sex trafficking in Oregon. The measure next goes to the House.

Lawmakers also asked voters to weigh in on two proposed constitutional amendments.

One would allow judges to serve in the National Guard or teach at public universities. The state's constitution prohibits judges from working for other branches of government and makes it illegal for a person to hold more than one paid government position.

The other proposal would allow the state to take on debt to pay for college scholarships. The measure proposed by state Treasurer Ted Wheeler would allow the state to sell bonds to raise money for a permanent grant program to help low-and middle-income students pay for post-secondary education. If voters approve, a future Legislature would have to decide whether to fund the program and how much money the state would invest.

Both questions will be referred to the November 2014 ballot.

Copyright 2013 The Associated Press.