One of the biggest battles that could be fought in the legislative session this year is over the Public Employees Retirement System (PERS). Governor Kitzhaber proposes capping cost of living adjustments (COLA) to the first $24,000 in benefits, which would help preserve benefits for lower-income retirees, while limiting the amount paid to higher-income members.
But that proposal is potentially on shaky legal ground. The Oregon Supreme Court overturned a 2003 attempt to suspend the COLA. The Oregon Department of Justice has suggested several ways that Kitzhaber’s proposed changes might hold up in court, despite the previous ruling. The agency admits, however, that “no guarantees are possible“ that court wouldn’t overturn the proposal. The Legislative Counsel’s office, however, says the changes would be thrown out by the Supreme Court.
What are the legal arguments for and against capping the COLA? What is the likelihood that Governor Kitzhaber’s proposal could survive in court?