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Ore. Legislature Boosts Education Funding, Raises Taxes

Oregon legislators approved spending more than $200 million in a brief special session over the last few days. Much of the money will go to education, but mental health care and services for seniors benefit, too.

John Rosman /OPB

Educators will see $140 million more, across the state’s public schools, colleges and universities. There’s also $15 million for senior housing and transportation and $20 million for mental health services.

To generate that much spending, lawmakers raised corporate tax rates, eliminated an exemption for high-income Oregonians, changed medical deductions, and hiked tobacco taxes.

Legislators partially offset those increases by approving millions in tax cuts. They cut certain business income taxes and expanded tax credits for low-income, working Oregonians.

But the latest changes to Oregon’s retirement system for public employees didn’t add revenue to the current budget cycle. To the extent there are savings over the next two years from cutting Public Employee Retirement System benefits, they came from changes in the 2013 regular session, last summer.

The latest PERS changes will have a future impact. The reined-in cost-of-living adjustments are expected to cut the state’s long-term liabilities by five billion dollars.

Attorneys representing public employees say the recent PERS bills - from both the regular session and most recent special session - may violate constitutional protections for contracts. PERS beneficiaries have asked the state Supreme Court to review changes from the 2013 regular session. They could change that petition, or file a new one over this week’s legislation.

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