Lawmakers Consider Increasing Retirement Benefits for Some Public Employees

Lawmakers cut retirement benefits in 2019 under then-House Speaker Tina Kotek. Now, they are thinking about raising them for police, firefighters, district attorneys, 911 operators and others.

In a short session that was supposed to be about recriminalizing drugs and generating more housing, Democrats added complexity Feb. 6 by proposing to increase retirement benefits for district attorneys, 911 operators, and Oregon State Hospital staff by placing them in a new “hazardous position” category that provides the same additional retirement benefit as police and firefighters—worth a 20% increase in benefits.

House Bill 4045, sponsored by state Rep. Dacia Grayber (D-Portland), who is a firefighter, would also lower the retirement age from 60 to 55 for police and firefighters who are in Tier 3 of the Oregon Public Service Retirement Plan (i.e., the newest members of the Oregon Public Employees Retirement System).

“Police and fire positions are very difficult for both your physical health and mental health,” the firefighters’ union testified. “Our bodies are broken down by the time we retire, as well as our mental health having taken a long career of stress.”

The proposal to add patient-facing Oregon State Hospital workers comes as no surprise. The unions that represents those workers, the American Federation of State, County and Municipal Employees and Service Employees International Union, have long publicized the difficult conditions workers face in the state hospital, which increasingly serves patients who have been found guilty except for insanity or are unable to aid and assist in their own criminal defense. On Tuesday afternoon, OSH employees testified to the assaults and trauma they’d suffered at the hands of patients.

The bill comes at a time when PERS still faces a large unfunded liability (there is only enough money to meet 78% of obligations) and would partially undo benefit cuts spearheaded by then-House Speaker and now-Gov. Tina Kotek in 2019.

Public employee unions testified enthusiastically on behalf of HB 4045 as the bill was introduced, but local governments warned that increasing retirement benefits would come at the expense of services and the salaries of employees. “We are concerned that HB 4045 risks making the entire system insolvent,” testified the Special Districts Association of Oregon. Despite overwhelming union support, the Oregon League of Cities and the Association of Oregon Counties also both testified against the bill.

Unlike the state—which sees its tax revenues rise rapidly when personal and corporate incomes accelerate—city, county and special district government revenues are tied to property taxes, which increase more slowly. “Counties are already operating on thin budget margins and each incremental cost increase creates unsustainable budgetary requirements,” the Association of Oregon Counties testified.

The politics around the bill are fraught in this election year. In 2019, then-House Speaker Tina Kotek (D-Portland) forced through PERS cuts in Senate Bill 1049 that infuriated many in the Democrats’ public employee union base.

Should the bill progress, Kotek will face a difficult decision whether to sign a bill that would give up some of the hard-won savings from 2019. (Kotek’s spokeswoman said the governor has no comment on the pending bill.)

Democrats also passed a raft of police reform measures in 2021, in the wake of George Floyd’s murder. Some of those bills alienated police and their allies—who would now receive a gift of earlier retirement.

The bill comes at a time when Democrats are under heavy fire for Measure 110, the drug decriminalization bill that voters passed in 2020. Their sensitivity to demands for increased public safety in an election year may make them more willing to add costs to an underfunded retirement system that already consumes a large share of government payrolls.

The next likely step: an amendment that would fold another bill, HB 4116, which proposes to add Oregon State Police lab scientists and technicians to the police and fire category—i.e., another increase.

HB 4045 is scheduled for a work session Feb. 8 at 1 pm.

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