In an emotional vote on the House floor Thursday, lawmakers approved legislative leaders’ controversial bill to rein in escalating pension costs on a 31-to-29 vote after initially voting the bill down 29-to-31.

After the bill initially died, House Democrats took a 20-minute break and House Speaker Tina Kotek left the chamber -- apparently to twist a few arms. She returned, grim-faced, and immediately two Democrats changed their votes and Senate Bill 1049 passed. Rep. Andrea Salinas, D-Lake Oswego, one of the two who switched her vote from “nay” to “aye,” had been speaking with Kotek and left the chamber with tears in her eyes, according to a tweet by OPB. Rep. Mitch Greenlick, D-Portland, also changed his vote.

All Republicans and seven Democrats voted against the bill, which now goes to Gov. Kate Brown. She is expected to sign it.

At its core, lawmakers’ financial plan depends on kicking the system’s $27 billion deficit down the road by extending the minimum payment schedule for another eight years. That accounts for about three-quarters of the $1.2 billion to $1.8 billion in savings the legislation is expected to generate per two-year budget cycle beginning with the 2021-23 biennium.

But the cause of Thursday’s drama was the bill’s controversial employee cost-sharing provisions, which redirects a portion of the retirement contributions employees currently make to a supplemental 401K-like savings plan. Instead, some of those contributions – 2.5 percent of pay for employee hired before August 28, 2003, and 0.75 percent for employees hired after -- would go into an account that would support pension benefits.

Currently, Oregon is one of only two states that don’t require employees to contribute to their pension benefits.

SB 1049 leaves employees’ pension benefits intact. But the bill would reduce the ending balances in employees’ supplemental retirement accounts, trimming a 30-year employee’s overall retirement benefits by 1 percent to 2 percent of pay. The contributions won’t apply to employees making less than $30,000 a year, and the redirection would cease if the pension system’s funded status reaches at least 90 percent.

Still, the measure is anathema to employees and – publicly, at least – to their unions. They call the bill unfair, unbalanced and a breach of trust with employees who they say are already underpaid.

Some lawmakers agreed Thursday, refusing to support the bill.

House Speaker Kotek, who co-sponsored the bill with Senate President Peter Courtney, appeared to fumble Thursday in her attempt to move the controversial legislation over the goal line. Typically, legislative leaders have their votes securely in line for such a significant bill.

That wasn’t the case Thursday as nine Democrats joined Republicans in opposition. While two lawmakers changed their votes, others didn’t – some defiantly so.

“Not only am I a NO on this vote, I’m a hell NO,” Rep. Diego Hernandez, D-Portland posted on his Facebook on Thursday. “I’ve been threatened, my priorities are now on the chopping block, and I’ve been treated with tremendous disrespect. None of this changed my mind. I believe there are better solutions that are not on the backs of hard-working public employees.”

Votes on pension reform can be risky. Legislators who have defied unions in the past have paid during the next election cycle. Oregon lawmakers have a phrase for it: “Getting Macpherson-ed,” a reference to the Lake Oswego Democrat Greg Macpherson who lost a primary bid for Oregon Attorney General in 2008 after coordinating PERS reforms in 2003.

This time around, it isn’t clear how involved unions were in negotiating terms of the bill. But Melissa Unger, executive director of the SEIU 503, offered a mixed message to members on Thursday. She said SB 1049’s employee contributions are significantly less than those proposed in a ballot initiative by business groups or the governor’s plan.

Then she went on to say the union will challenge the bill in court and at the bargaining table.

“Nine out of 10 SEIU Local 503 members are at the bargaining table this summer,” she said in a statement. “We will make it clear that new contracts will not only offset the loss from today’s bill, but increase overall compensation to cover the increased cost of living and reflect the value of the work you do for the people of Oregon. This fight is far from over. We are united, and we will win!”

That is, of course a possibility.

Public employers could bargain away the employee savings, leaving the system’s underfunding -- and SB 1049’s attendant contribution reductions -- as their main accomplishment. That underfunding could further destabilize the retirement system if investment returns fail to live up to the pension fund’s assumption of 7.2 percent annually.

House Republicans sent out a statement decrying the PERS debt refinancing “at a time where true reform is needed… Accounting tricks and political manipulation won’t solve this crisis. There are real ways to reform PERS, but this is a half-measure that falls well short. Democrats avoided true reform while cutting the benefits of public employees across the state.”

The reform bill includes a number of other provisions:

· Making a one-time, $100 million contribution to an incentive fund that will provide a 25 percent match on any extra contributions employers make to the pension system.

· Giving employees discretion to allocate investments in their individual accounts, versus the standard age-based funds they’re invested in today.

· Removing limits on working after retirement, but requiring employers to make full pension contributions on rehired retirees. That could provide some repayment of the system’s unfunded liability.

· Requiring employers to seek an independent financial analysis before issuing new pension obligation bonds.

· Directing any proceeds from Oregon Lottery’s proposed sports betting to the employer incentive fund.

Following the House vote, the governor’s office released a statement saying that her aim this session was to stabilize pension costs “under a model of shared responsibility.” She said the SB 1049 accomplishes that, with rates being reduced through contributions from employers, the state general fund, the lottery, and public employees.

“Going forward, Governor Brown will not look to public employees for further contributions,” the statement continued. “She will continue working to further decrease the unfunded actuarial liability via other sources.”