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Depleting SAIF will jeopardize rural prosperity

Local businesses are the job engine of Oregon’s economy. Our long-term prosperity is dependent on attracting and retaining businesses that create a strong base of middle-class jobs in rural Oregon. To accomplish this, it is imperative that Oregon protect assets that provide us a competitive advantage over other states.

One such strength is Oregon’s affordable workers compensation insurance along with the state’s effective approach to proactive worker safety programs. In large part, SAIF — Oregon’s leading carrier — has helped Oregon become one of the lowest-cost states for workers compensation insurance. Thanks to innovative workers safety and training programs, on-the-job injuries have steadily declined over the past 30 years. More than 47,000 Oregon employers, of which a vast majority are small businesses, depend on SAIF’s affordable rates and safety programs to ensure a safe and healthy workplace.

As Salem looks for ways to balance the state budget, a new plan was recently proposed to critically reduce SAIF’s reserves by nearly $500 million to cover unfunded PERS liabilities. While PERS is a problem that needs legislators’ immediate attention, there is no tie or correlation between its unfunded liability and the premiums that Oregon employers pay to SAIF. This “plan” is simply a money grab and provides no structural solutions to how PERS is undermining public entities in our state.

As our organizations look to support the growth of local jobs and recruit new businesses to Oregon, we worry that raiding SAIF’s reserves could damage what’s a very successful model for Oregon employers and injured workers. The system is working well for employers and workers and this could significantly disrupt the balance that exists within the system.

SAIF’s reserve fund, paid by Oregon employers, is intended for future worker’s compensation claims, not the retirement accounts of public employees. The state does not contribute financially to SAIF’s reserve and therefore the fund should be off limits. What is next on the list to raid — your unemployment benefits?

We know that another recession will come someday in the future. It’s important for SAIF — just like our unemployment insurance system — to build up reserves when times are good. That insulates them for both the future and the unknown and unforeseen. Failing to plan for an inevitable turn of the business cycle is certain to lead to instability in the workers compensation market and very well could lead to future increases in rates for local businesses or reductions in programs to protect workers. That’s simply not fair.

In our work to attract new companies to Oregon, businesses interested in relocation or expansion across state lines are consistently impressed with Oregon’s approach to its worker compensation system and safety record. They see SAIF as a benefit to doing business here. We believe this strength needs to be fiercely protected, and SAIF’s reserves should not be leveraged for unrelated purposes. We implore policymakers in Salem to focus on a solution that won’t inevitably jeopardize worker safety and make Oregon a less desirable destination for job growth.

Roger Lee is the CEO of Economic Development for Central Oregon (EDCO). Colleen Padilla is executive director of Southern Oregon Regional Economic Development Inc. (SOREDI).