Published: July 13, 2017

The 2017 legislative session began with a punch to the gut. With a looming $1.4 billion budget deficit, legislators called for draconian cuts to public services; more than 40 PERS cuts were introduced, some calling for retirement cuts of up to 40 percent; and one legislator, Representative Julie Parrish, suggested putting every public employee on Medicaid.

SEIU 503 members exercised the political power we have built together and stopped these cuts. In the end, the session was full of accomplishments for public employees. We fought to address the state’s budget deficit, defeated attacks on our retirement, and minimized harmful cuts to state programs and higher education.

However, in the final days of the session, legislators passed a cost containment bill that will have some negative impacts—as well as some positive changes—on SEIU 503 members. Here’s a quick overview of how the cost containment measure will impact SEIU 503 members like you.

  • Studying a Merger of PEBB and OEBB: The Public Employee Benefits Board is a labor-management board that provides healthcare benefits to SEIU 503 members. OEBB is a similar board for teachers. The legislation sets in motion a process of merging the two boards that includes a review and report to the legislature. We will not see any changes without additional action by the legislature. Our union opposes this merger because the boards are structured differently and do very different things. PEBB has effectively managed costs and saved $180 million by becoming self-insured whereas OEBB is not self-insured, pays higher administrative costs and is not able to achieve savings from plan design changes.

  • Eliminate Double Coverage: Under our current healthcare plans, when a member and their spouse both receive healthcare through PEBB or OEBB (for example, a state worker married to another state worker or a school district employee) they can use each other’s plans to cover out of pocket costs or receive a buyout if they chose to forgo double coverage. Over our objections the legislature chose to eliminate this benefit. The change will not go into effect until 2020, and over the next 3 years we will have the opportunity to influence how this change is implemented through our PEBB representatives. We will also have another round of contract negotiations before it goes into effect, in which we could try to mitigate the compensation impacts.

  • Hiring Slowdown: The legislation calls for a review of vacant positions and long-term vacancies that is tied to calls for a hiring slowdown. Right now many departments are facing higher than average retirements and a hiring slowdown could cause major disruptions in delivering the services people need.

  • Cap Public Employment: SB 1067 lowered the current capped ratio of state employees to Oregon’s population from 1.5% down to 1%.  We lobbied against this provision mainly because it reinforces the false narrative that agencies are overstaffed at a time when many services are severely understaffed. We do not expect this change to produce layoffs nor limit normal growth, in part because the previous 1.5% cap was in place when employees at the Oregon University System (faculty, classified, administrators) were considered state employees. We do worry that, in the event of an emergency, this cap could limit the state’s flexibility.

  • Prevent Higher Healthcare Costs: The bill will help keep our out-of-pocket healthcare costs low by capping provider rates. This move will ensure that the real costs in health care — higher hospital prices and higher drug prices — are not passed on to us.

  • Improve Debt Collection: This has been an ongoing issue, and it’s time that we collect more of the money owed to the state. The bill will centralize debt collection in the Department of revenue in order to improve debt collection practices.

  • Review State Contracts: Front-line workers consistently report waste in state contracting with outside firms, so it’s good policy to review these practices to see where work can be more effectively and efficiently performed by state employees.

As bad as some of these changes are, they pale in comparison to the proposals introduced by Senator Ted Ferrioli (R-John Day) on the last day of the session and voted for by 13 members of the Senate. Ultimately defeated, this amendment would have reduced state workers pay, rolled back healthcare and retirement benefits, and much more. Unity against these proposals will be essential as we enter the 2018 and 2019 legislative sessions.