'Grand bargain' on PERS, taxes breaks apart on Ore. Senate floor

'Grand bargain' on PERS, taxes breaks apart on Ore. Senate floor
The Oregon State Capitol (Photo courtesy Flickr user cursedthing)

SALEM, Ore. (AP) — A "grand bargain" that would have raised new revenue and cut public pension benefits fell apart in the Oregon Senate on Tuesday when the tax bill failed to get enough Republican votes.

In a passionate floor speech, Democratic Senate President Peter Courtney told colleagues he pushed as hard as he could to forge a compromise between the parties.

"If this goes down today, it's my fault," Courtney said before the chamber voted. After two lawmakers changed their votes, one for a parliamentary reason, the final count was 15-15.

After the tax bill failed, Democrats then blocked a vote on a plan to cut pension benefits for retired government workers, sending that bill back to committee.

The proposed compromise would have raised taxes on corporations and high-income earners and limited future cost-of-living increases for retired state workers.

Courtney had announced earlier that a vote on the public pension bill was contingent on the revenue plan passing.

Republicans have maintained that the state needs to make reforms to the pensions system. The GOP agreed to consider a tax hike in exchange for significant PERS cuts and a tax cut for small businesses.

Sen. Ted Ferrioli, the Senate's top Republican, said the package was unacceptable and partisan because it didn't include a tax cut for small businesses and didn't go far enough to cut PERS benefits.

"This is masquerading as some kind of a bargain," Ferrioli said. "There is no bargain."

The deal earned the moniker "grand bargain" because it gave both parties pieces of what they'd been pushing for all session: deeper cuts to the Public Employees Retirement System for the Republicans and new tax revenue for Democrats. Voting for tax increases and PERS reform is a politically tough decision for Republicans and Democrats respectively.

Ferrioli also argued that there was no reason the bills should be tied to one another. During the morning session, he asked the Senate to consider the second measure. Democrats agreed to allow it, and then voted to send the pensions-cutting bill back to committee.

Jim Green of the Oregon School Boards Association said it was disappointing the bills were linked because passage of either bill would have been hugely beneficial to school districts across the state.

"The people who got hurt today were not the Republicans or the Democrats...they were the school kids of Oregon," Green said.

The tax bill failed in the Senate because majority Democrats needed at least two Republican votes to reach the supermajority required to increase state revenue. Sen. Bruce Starr, R-Hillsboro, initially voted for the bill, leaving supporters one vote short of a victory. But Starr changed his vote when it was clear the measure would fail. Democrat Alan Bates switched for a procedural reason so that he could call for a reconsideration of the bill the following day.

Time to strike a deal, however, is running out as the clock ticks closer to the end of the 2013 Legislative session. Courtney said the Senate is scheduled to work through the weekend, signaling that the session could drag on into next week.

Business groups are making a last-ditch effort to secure a few more Republican votes and salvage the deal in time for a vote on Wednesday, said Ryan Deckert, a lobbyist for the Oregon Business Association.

"We came one vote shy of really changing the future direction of this state," he said.

Copyright 2013 The Associated Press.