End 6 percent PERS pick-up to help balance Oregon's budget, Gov. Kulongoski says | OregonLive.com

End 6 percent PERS pick-up to help balance Oregon's budget, Gov. Kulongoski says | OregonLive.com

End 6 percent PERS pick-up to help balance Oregon's budget, Gov. Kulongoski says

Published: Wednesday, December 01, 2010, 10:53 AM Updated: Wednesday, December 01, 2010, 11:01 AM

Harry Esteve, The Oregonian
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Michael LloydGov. Ted Kulongoski, in his final weeks at the helm of state government, is recommending some stiff budget cuts to attack a projected $3.5 billion shortfall.

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Outgoing Gov. Ted Kulongoski is calling for an end to one retirement plan for public employees and a cheaper health insurance program for state workers as part of a series of recommendations aimed at saving the state more than $2 billion over the next two years.

The governor, in an update of his "reset" report, issued a set of recommendations this morning that he says would help shrivel the $3.5 billion shortfall that has been projected for the 2011-13 state budget cycle.

The recommendations, however, are sure to cause strife within the unionized ranks of state workers and teachers, because they hit those groups hard in the pocketbook.

"No governor before me has had to hand off a more difficult fiscal challenge to his successor," Kulongoski said in a statement accompanying his recommendations, "but I am able to do so with a roadmap that identifies some next best steps that meet that challenge more than half-way."

The report calls on Gov.-elect John Kitzhaber the Legislature to terminate the PERS Individual Account Program and along with it the state pick-up of the 6 percent employee contributions to