SALEM — An Oregon Senate committee has advanced two bills that would increase tax revenue and the cut deeper into retirement benefits for government employees.
Democrats on the Finance and Revenue Committee approved the measures in a party-line vote on Friday.
The decision sets the stage for a vote in the full Senate, but the prospects are uncertain amid opposition from Republicans and some Democrats.
The revenue bill would increase cigarette taxes by 10 cents per pack, raise corporate income tax rates for revenue above $2.5 million and limit access to personal income tax exemptions for higher-income taxpayers.
It also would restructure a tax deduction for seniors' medical expenses.
The pension bill would reduce inflation increases for all public employees and retirees, among other changes.
Friday's actions were an early step toward a potential compromise between Republicans and Democrats that would result in lower employee retirement costs for state and local governments and increased state revenue, but there still were many hurdles.
It's not clear whether the tax-increase bill has the supermajority needed to pass the Senate, which would require at least two Republican votes if all 16 Democrats were in favor. The House has been resistant to pension cuts that go deeper than those enacted earlier this year.
Senate Democrats portrayed the twin bills they were taking up Friday as part of a "grand bargain" that would increase funding for schools, senior services and mental health.
However, the tax increase did not get support from the two Republicans on the committee.
"I'm not sure exactly who this grand bargain is with," said Sen. Larry George, R-Sherwood.
The revenue bill would increase cigarette taxes by 10 cents per pack, raise corporate income tax rates for revenue above $2.5 million, and limit access to personal income tax exemptions for higher-income taxpayers. It also would restructure a tax deduction for seniors' medical expenses.
The Senate vote could come as soon as today but is more likely to be held early next week.
Senators approved a measure that would toughen penalties for people who pay for sex with minors. The bill is part of a broader effort to crack down on child sex trafficking in Oregon. The measure next goes to the House.
Lawmakers also asked voters to weigh in on two proposed constitutional amendments.
One would allow judges to serve in the National Guard or teach at public universities. The state's Constitution prohibits judges from working for other branches of government and makes it illegal for a person to hold more than one paid government position.
The other proposal would allow the state to take on debt to pay for college scholarships. The measure proposed by state Treasurer Ted Wheeler would allow the state to sell bonds to raise money for a permanent grant program to help low- and middle-income students pay for post-secondary education.
If voters approve, a future Legislature would have to decide whether to fund the program and how much money the state would invest.
Both questions will be referred to the November 2014 ballot.