Like thousands of small business owners around the state I was shocked to learn recently that the State Accident Insurance Fund (SAIF) may not be SAFE.
Our workers’ compensation system’s reserve funds are being targeted in Governor Kate Brown’s attempt to address the huge $26 billion deficit in the Public Employee Retirement System (PERS) by raiding $487 million from SAIF. That amounts to about a quarter of the reserve SAIF has built over the past three decades by good management and the premiums paid by over 47,000 Oregon employers.
Along with my brother and sister, I own and operate D&H Logging and Young’s Trucking which our parents founded in Coos Bay 60 years ago. We depend on SAIF to help us provide a safe and healthy workplace for our 25 employees, and - if the accidents we work so hard to prevent do occur - to deliver meaningful and timely benefits to get them well and back on the payroll as soon as possible.
Oregon is the largest lumber producer in the United States, with about half of the state’s total landmass covered in forest. The wood products industry is vitally important to the economy of our state, and particularly to rural Oregon. Most of the logging today is done on private lands, and we have made great strides in environmentally-friendly, sustainable, and safer forest practices. We live in the areas we log. We care for our communities and our forests.
In the old days logging was notoriously dangerous. With help from SAIF’s consultants and informational resources we have made it much safer today. Nonetheless, workers compensation insurance remains among our highest costs. If it is destabilized by the Governor’s plan, SAIF would almost assuredly have to reduce worker safety programs or cutback in other areas such as injured workers’ benefits.
It could also raise rates - and we can’t afford to pay more.
If our premiums become unaffordable, we might well be forced to layoff workers, or even close down. Multiply that by thousands of Oregon businesses, school districts, local governments, and non-profits across the state. It could be an economic disaster - especially for the already struggling rural economy.
The threat facing our workers’ compensation system today is like “deja vu all over again.” In the 1980s, the legislature raided SAIF. The courts later ruled that was illegal, and the state was forced to pay it back with interest. Now the legislature has made it legal, but it is still a terrible idea.
The $478 million Governor Brown proposes to take from SAIF did not come from the state government. It was paid by SAIF policy-holders. It is a very significant amount of money for SAIF, but it is minuscule compared to the PERS deficit.
As past president of the Associated Oregon Loggers, I have had the opportunity to work on behalf of the thousands of Oregonians employed in our forests, and I know how important SAIF is. Please join me in convincing the Governor to leave our workers compensation system alone, and keep SAIF safe!
Brad Haga is Vice President of D&H Logging and President of Young’s Trucking, family-owned businesses based in Coos Bay, and is a former president of Associated Oregon Loggers.