Governor John Kitzhaber testified Thursday afternoon before the legislature, in advance of a special session.

He spoke to OPB's Think Out Loud earlier in the day about changes he wants in the state's public employees' pension program.

It's part of a so-called "grand bargain" to increase spending on public education.

Host David Miller asked the governor how he plans to sustain education spending, if revenue doesn't increase at the same rate.

Governor Kitzhaber says there are other places the state will find be able to money, including savings in the healthcare system.

Gov. Kitzhaber: "I think you have to look at the context of the overall budget. So the changes we made in healthcare, for example, saved us $100 million general fund in the current biennium, it will save $200 (million) in the next biennium, it'll save $400 (million) in the next biennium, so the delta that's created by holding Medicaid costs to 3.4 percent, which is lower than the growth in state revenues, creates huge room in the general fund for reinvestment, as does the reductions we're making in the Public Employees Retirement System. It reduces employer costs by about 4.5 percent going forward which creates more space in the general fund, and the cap on the senior medical deduction does the same. I think it's apples to oranges to try and look at this tax package without the larger lens of all the other things we've been doing to try and create space for dollars we reinvest in schools."

David Miller: "But if I understand you correctly you're saying that some of the money that could be available in future years, looking 4-6 years down the line, that doesn't necessarily come from savings in this bargain; it comes from other changes that we're assuming will come from changes the Legislature has made in the last few years."

Gov. Kitzhaber: "That's true, but at the end of the day it's not really where it comes from within the general fund. The important thing is we have ever-increasing resources within in this general fund to reverse the disinvestment that's occurred in public education over the last decade, and I'm confident that if you look at the entire budget, we're standing, actually, in a very good place."

This story originally appeared on Oregon Public Broadcasting.

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