Oregon governor plans to keep stumping for pensions, taxes

SALEM — Gov. John Kitzhaber said Tuesday he's not done with his fight for more substantial savings in the state pension system and will try to round up support in places with the most financially struggling school districts.

The governor said he'll call a special legislative session if he's certain a bill would pass. The Legislature adjourned for the year on Monday after months of fruitless negotiations over pension cuts, tax increases and tax breaks for small businesses. A last-ditch effort failed in the Senate last week.

"My strategy is to give everybody a few weeks to kind of decompress," Kitzhaber told The Associated Press in a phone interview. "Then I want to get on the road, go around the state, particularly some of those areas that still are struggling with layoffs and see if I can rebuild a coalition to get the votes necessary to do this."

For the first time in his three terms as governor, Kitzhaber worked with a House and Senate controlled by Democrats. But the Democratic governor also saw much of his agenda frustrated — a stark contrast to the last two sessions when the Democratic Senate and the evenly divided House gave him nearly everything he wanted.

The Legislature approved a little over half of the pension cuts he asked for and severely cut back on his proposal to save money on prisons by reducing some criminal sentences. Lawmakers did refer a ballot measure that would ask voters whether to repeal the death penalty.

Still, Kitzhaber called it "quite a remarkable session," saying he got nearly everything he asked for — even if much of it was scaled back. Lawmakers approved independence for public universities, increased funding for early childhood education and a mediation process for medical malpractice.

"I think there's a tendency to sort of view this as a failed session just because there was so much energy and focus on this one vote that didn't happen in the Senate," Kitzhaber said. "But I think if you step back and look at the accomplishments, I think Oregonians should be very proud of the job the Legislature did."

Months before the Legislature convened in January, Kitzhaber began pushing for substantial benefit cuts for current and former government workers in the Public Employees Retirement System, saying the rising cost of pensions threatened school funding. Democrats in the House and Senate backed a reduction in inflation increases for retirees over Republican objections that it was too small a cut.

In the final days before lawmakers adjourned, the Senate was one vote shy of approving a bill that would have increased taxes on cigarettes, businesses and wealthy individuals. When that failed, Democrats refused to consider the pension-cutting bill.

Kitzhaber said he wants to figure out why senators who represent school districts facing teacher layoffs — like Republican Jackie Winters of Salem — voted against the tax bill.

"I've got to get a better understanding of where people like Sen. Winters are, for example," Kitzhaber said. "She had about $28 million in benefit for her school district had we passed that bill, and she voted against it, and also argued that the K-12 budget isn't adequate."

Democrats had hoped Winters would break with other Republicans in order to boost funding for her school district. Winters said Tuesday that she supports her party's effort to hold out for a reduction in tax rates for certain small businesses.

"That small business piece is very critical to me," Winters said. "I was a small business owner, so I understand. When you look at who really generates jobs in this state, it is small business."

Kitzhaber said the work can't wait until lawmakers return in February because the looming primary elections would make conditions too partisan for a successful compromise.

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