The Oregon Supreme Court will hear arguments Tuesday in a case that pits public employee unions against state government over cuts to Oregon's public pension system.
At issue are a pair of bills passed by Oregon lawmakers last year and signed by Governor John Kitzhaber. The measures are aimed at reducing the cost of providing pensions for public workers such as teachers, firefighters and state and local government employees.
The main way the bills do this is to cut the annual cost of living increase for retirees.
Public employee unions howled. They said the action violates the contracts that those workers agreed to during collective bargaining. Attorneys for the state will argue that lawmakers only adjusted the way cost of living increases are calculated; they didn't eliminate them entirely. The state says this means the cuts don't violate any contracts.
The stakes are high. If the court overturns the cuts, state and local governments will have to find a way to pay for the higher pension rates. A decision in the case could come during next year's legislative session.
In August, the Washington Supreme Court affirmed the right of that state’s lawmakers to cut public pension increases.