## Facts

- The Oregon legislature enacted a statute requiring all city, county, and district police officers and firefighters to be covered by the Public Employes Retirement System (PERS) by a specified date unless the employer provided “equal or better” retirement benefits.
- The statute also required those local governments to fund premiums for a state-purchased insurance policy providing a $10,000 job-related death benefit for police officers and firefighters, unless “equal or better” benefits were provided.
- The Cities of La Grande and Astoria, both home rule charter cities, sought declaratory judgments that the statute unconstitutionally intruded on municipal authority to set compensation and benefits for city employees under the Oregon Constitution’s home rule provisions.
- Trial courts ruled for the cities, and the Oregon Court of Appeals affirmed.
- The Oregon Supreme Court granted review and consolidated the cases.

## Issues

1. Whether Oregon’s home rule provisions prevent the legislature from imposing statewide minimum retirement and job-related death-benefit requirements on municipal police and firefighters employed by home rule cities.
2. Whether the statute impermissibly regulates municipal self-government, or instead constitutes permissible statewide substantive regulation directed at public welfare.

## Decision

- The Oregon Supreme Court reversed the Court of Appeals and the trial court judgments.
- The court upheld the statute as constitutionally applicable to home rule cities.
- The court concluded the law established statewide minimum benefit standards for a class of public employees and did not alter municipal governmental structure or procedures.
- Cities remained free to maintain non-PERS programs and alternative benefit arrangements if they were “equal or better” than the statutory minimums.

## Legal Principles

- Home rule primarily protects a city’s autonomy over its governmental organization and procedures; it does not provide immunity from statewide substantive legislation directed at general welfare.
- State statutes pursuing substantive social or economic objectives of statewide concern may apply to home rule cities if they do not restructure municipal government or materially impair the city’s basic capacity for local self-government.
- A statute setting minimum employment-related benefits for public safety employees may reflect statewide interests (including uniform baseline protections and workforce stability) even though it affects municipal budgeting and personnel administration.
- The existence of local fiscal impact does not, by itself, convert a statewide policy into a matter reserved exclusively to municipal control under home rule.

## Conclusion

The Oregon Supreme Court held that statewide minimum retirement and job-related death-benefit requirements for municipal police and firefighters are valid substantive legislation of statewide concern and do not violate Oregon home rule so long as they do not reconfigure municipal governmental structure, leaving home rule cities discretion to provide “equal or better” benefits.


City of La Grande v. Pub. Emps. Ret. Bd., 281 Or. 137, 576 P.2d 1204 (1978)