LEGISLATORS SHOULD PURSUE SAIF SALE

April 10, 2003 12:00 am

A movement is afoot to sell SAIF Corporation, the state agency that provides workers' compensation insurance to Oregon employers.

According to William B. Conerly, the author of a report made for the Cascade Policy Institute, selling SAIF and the Industrial Accident Fund could bring in $2 billion to the state.

Conerly's study deserves the attention of every state legislator. The report already has drawn the endorsement of Dan Gardner, the state's labor commissioner.

Conerly, who not only holds a Ph.D. in economics but is a former chief economist for one of Oregon's major banking firms, served on the Governor's Council of Economic Advisors for Govs. Neil Goldschmidt, Barbara Roberts and John Kitzhaber and is currently on Gov. Ted Kulongoski's council.

Conerly's credentials are solid. And his report, "The Benefits from Unlocking SAIF: Why Oregon Should Open Its Workers' Compensation Market," should be read by every business owner in the state.

Lest anyone fear that Oregon will be left without a company that provides workers'' compensation insurance, there are 206 companies already collecting premiums for providing these services.

Conerly points to Michigan as a state that did just what Oregon could do with SAIF. In 1994, the Accident Fund of Michigan was sold to Blue Cross/Blue Shield. Rates fell the next year.

There is enough precedent existing to have the Legislature move forward with selling SAIF and pocketing a check for Oregon of more than $2 billion. What we are concerned with is how that money should be used. Funding is so tight in Oregon right now, legislators will want to spend the money to plug holes in the next two-year budget. That would be completely wrong.

Instead the money should go to fixing the Public Employees Retirement System mess by creating a fund to buy down the PERS cost to cities and counties and state government in the future. Call it a rainy day fund for PERS, it could help keep local government from shrinking any more and could ensure that those retirees from the system won't have to carry the burden of former state errors on their backs.

This potential windfall shouldn't go to bail out education. There are too many other deserving government agencies that are seeing their dollars cut because of the pressure from education to eat up more and more of the general fund.

Conerly's report creates a clear road map of how all Oregonians would benefit from selling off the SAIF Corporation. Our legislators should move forward with doing just that and then use the proceeds to benefit the future of Oregonians.