PORTLAND, Ore. (AP) - Five lawmakers revealed a framework of “cost containment” strategies Friday for the cash-strapped 2017-19 budget cycle that involves a two-year hiring freeze, revising collective bargaining rules with labor unions and curbing public employee health and retirement costs.
The preliminary proposal wrapped up a tense week at the state Capitol in Salem, where the 2017 session is now mid-way through and lawmakers face sweeping cuts and various tax hikes to address an upcoming $1.6 billion shortfall. Democrats and Republicans squared off Monday over a gloomy report intended to illustrate the deficit situation as it currently stands and by Thursday, Gov. Kate Brown signed an executive order for a hiring freeze on state employees for the remaining two months of the current biennium, beginning May 1.
The potential cost savings or number of individuals affected by Brown’s hiring freeze, or the five lawmakers’ proposal Friday, are still unknown. The budget situation will become clearer in May with the release of the state’s revenue forecast, traditionally the basis for drafting the next budget.
A tax-hike proposal to help generate more revenue and relieve some potential cuts is also anticipated soon.
“Following the defeat of Measure 97,” said Democratic House Speaker Tina Kotek, referring to the labor unions’ $3 billion big-business tax hike proposal in November, “we asked representatives of the business community and labor unions to start meeting. Our goal was to help them rebuild trust, with the hope that they could generate ideas and help support the difficult budget negotiations that lay ahead. They are still meeting.”
In a statement, Patrick Criteser, CEO of Tillamook County Creamery Association who chairs the so-called Oregon Business Plan Coalition, said while everyone has a shared responsibility “cost control must come first, but, once we have assurance that costs will be addressed, we are also prepared to look at new tax revenue, including taxes paid by business.”
Hannah Love, manager for the unions’ A Better Oregon campaign, said with a cost-cutting proposal now on the table, “big business has again run out of excuses and delay tactics. Big business must honor its repeated promises to pay its fair share in taxes and stop obstructing progress.”
Friday’s latest spending-cut proposal came from the co-chairs of Ways and Means, a large committee of lawmakers that crafts the state’s budget and was also responsible for the controversial budget report earlier that week.
Over the next two years beginning July 1, they suggest state agencies and departments to operate under trimmed-down budgets where hiring new employees would be prohibited, existing employees would pay more toward their health and retirement benefits and operating costs would be more rigorously monitored.
Future growth of full-time state employment opportunities could also be capped at 1 percent, versus the current 1.5 percent, of Oregon’s population, about 40,000 workers based on today’s figures; public labor unions could see new collective bargaining rules that better align with the state budget-making process, such as negotiating contracts for two years, rather than four, and doing so a year before the next budget is due.
“We just want to be able to predict what those liabilities are on a more consistent basis,” Sen. Richard Devlin, one of the co-chairs, said during a hearing Friday.
Devlin also suggested they examine salary rates of public employees, which is not part of the formal proposal or broader budget talks in Salem. Unionized state employees, whose contracts are currently being negotiated, could see their 2017-19 compensation go up by $145 million. Monday’s Ways and Means report proposed scaling back that pay increase to $50 million.
“We have people in state government who are in some cases probably significantly under paid, we have some that are that are overpaid … we have not had any really broad classification of compensation study in this state I think since the mid-1980s,” Devlin testified.
House Republican Minority Leader Mike McLane called the co-chairs report an “encouraging starting point” but ultimately “balancing the budget over the next decade will require a far more comprehensive effort than what was discussed today.”
___
Associated Press writer Andrew Selsky contributed from Salem, Oregon.
Please read our comment policy before commenting.