SALEM — Oregon House Democrats hailed a vote by the revenue committee Wednesday as a move toward cutting “tax breaks for the wealthy” and a “step toward stable funding for public schools.”

Oregon House Republicans blasted it as an irresponsible “tax increase” and quickly linked it to their preferred method for generating revenue — deeper cuts to the Public Employees Retirement System.

From the start of the session, the $275 million tax hike and changes to PERS have framed the key debate around balancing the budget. Democrats have called for more “shared sacrifice,” pushing for cuts to the state’s pension system along with a tax hike. Republicans want deeper cuts to PERS and point to an increase in state revenue.

The vote on Wednesday clears the path for both measures — House Bill 2456, detailing the $275 million tax plan, and Senate Bill 822, outlining changes to PERS — to head to the House floor for a vote next week.

When it comes to taxes, House Democrats will need to convince at least two Republicans to vote in favor of the plan.

The tax proposal would cap deductions for high-income filers, those individuals who earn $125,000 or more and couples who earn more than $250,000. It would also close loopholes for offshore corporate accounts.

Democrats approved an amendment to the bill Wednesday to ensure charitable organizations were not included in the itemized deduction cap. When the plan was unveiled last week, nonprofits voiced concern it would stifle charitable giving.

Democrats carved out an exemption for charitable giving and made up for the loss of revenue by proposing to raise the corporate tax to 7.9 percent from the originally proposed 7.6 percent.

Rep. Jason Conger, R-Bend, who sits on the House Revenue Committee, was among the first lawmakers to raise concern over the impact to charities. Although he called the charitable exemption a victory, he said the overall plan is still “risky” and ripe for “unintended consequences.”

The same way the tax bill could have impacted charities, Conger said, it poses a threat to another popular itemized deduction, the home mortgage interest deduction.

“Should this ultimately be enacted, it will do more harm than good,” Conger said.

Rep. John Davis, R-Wilsonville, said during the committee hearing, that the “unsaid debate” in Wednesday’s revenue discussion is the unsustainability of PERS, which carries a $16 billion unfunded liability.

“That’s what’s going unsaid,” he said.

The Senate has already approved Senate Bill 822, addressing the pension system.

The measure would make graduated cuts to retirees’ annual cost-of-living adjustments to save $400 million and eliminate a tax credit for those retirees living out of the state to the tune of another $55 million.

In addition, Democrats plan to ask the PERS board to delay the payment of $350 million in employer increases in the upcoming biennium

“We’ve already asked middle class workers and retirees to give a bit through PERS reform,” said Rep. Peter Buckley, D-Ashland, a co-chair of the powerful budget-writing committee. “Now we’re moving forward to reduce tax breaks for the very wealthiest Oregonians and some corporations. It’s the only way we can stabilize, and then reinvest in education.”

House Bill 2456

What it does: Raises $275 million in revenue by capping deductions for high-income earners and corporations

What next: Heads to the full House for a floor vote. Democrats need two Republicans to pass the bill.