By BRAD CAIN
Of The Associated Press

SALEM - A leading backer of a bill to overhaul Oregon's troubled pension system for public workers said Friday he thinks strong opposition by labor unions could prevent the issue from being brought to a vote in the Oregon House.

Rep. Rob Patridge said House leaders are worried that the volatile retirement system issue could derail the delicate negotiations that are going on right now on the main issue of the special session - finding a way to erase an $860 million budget gap.

"We're sitting on a powder keg," Patridge said. "Many think it could melt down the entire budget process."

The Medford Republican's comments came after a House committee conducted a hearing on HB4060, which would junk the Oregon Public Employees Retirement System for workers hired after July 1, 2003, and replace it with a still-undefined retirement system.

Calls for reform have intensified in recent weeks because of new estimates showing that PERS, which provides retirement benefits to 294,000 public employees in Oregon, is facing an $8.5 billion shortfall.

At Monday's hearing, a taxpayer watchdog group called PERS "a financial train wreck" that is in need of a legislative fix.

"The system is vulnerable to collapsing into bankruptcy," said Jason Williams of the Taxpayer Association of Oregon. "Both taxpayers and public employees are going to lose unless they fix this system."

The House bill is facing opposition from labor unions because of its provisions junking PERS for public employees hired after July 1, 2003.

The idea is that the 2003 Legislature could devise a replacement retirement system before then, but a union lobbyist said there's no guarantee that would happen.

"The way it's written, you could reach the 'drop dead' date and abolish PERS with nothing it its place," said Mary Botkin of the American Federation of State, County and Municipal Employees.

Botkin also said there's little doubt that any move by House leaders to bring the bill to a House vote would "damage the discussions" on balancing the state budget.

"It would make it much more difficult pass a budget," she said.

Besides opposition from the labor unions, Senate President Gene Derfler on Friday said he doubts lawmakers will have enough time to tackle the complex PERS issue as they try to bring their budget-balancing special session to a close.

"Is it doable in a special session? No, I think it takes more time than that," the Salem Republican said.

Still, Patridge said he thinks the lawmakers must begin making a serious effort to reform PERS if they are going to ask Oregonians to pay more taxes to balance the budget.

"I don't want to go home without voting on this bill," the Medford lawmaker said. "I believe there are adequate votes to pass this measure in the House and Senate."