TV ads attacking SAIF began airing May 20, as Liberty Northwest’s political action committee, called Oregonians for Accountability, continued its signature gathering campaign
to qualify a ballot measure abolishing SAIF for Oregon’s November ballot.

Campaign spending reports filed earlier this month showed Liberty already had spent nearly $300,000 pushing its proposed ballot measure. In addition to TV ads, Liberty’s campaign committee used California-based Malchow
Schlackman & Hoppey, specialists in political direct mail, to send a special mailing to Oregon small businesses. The mailing, declaring “SAIF is leaving small businesses HIGH and DRY,” quoted a 15-year-old news story as the source for its claim that “SAIF cancelled the policies of 7,000 small businesses.”

The fact is, today SAIF insures 60 percent of Oregon’s small businesses, a segment of the market (along with high-risk employers) that private insurance companies like Liberty
don’t want to insure. If Liberty’s initiative passes and SAIF is abolished, many of the small businesses and high-risk employers now insured by SAIF (such as nursing homes, homebuilders and farmers) would be assigned to a special high-risk pool and forced to pay rates 30 to 50 percent higher than what SAIF currently charges them.

Liberty President and CEO Tony Ferranato also sent a mailing to insurance brokers, dated May 12, pitching his company’s ballot measure and complaining that “something must be done to level the playing field for private insurers.” The imbalance, according to Ferranato, is that “SAIF uses the advantages it receives to create an unfair marketplace that discourages competition and results in fewer choices for Oregon businesses.”

The Liberty president never details the “advantages” SAIF enjoys. SAIF’s principal“advantage” is its lower cost of operations. SAIF’s lower costs aren’t the result of its nonprofit
status or tax exemptions. SAIF pays the same state taxes private insurance companies pay. It also pays local taxes, such as transit district taxes, that private insurers are exempt from
paying.

SAIF’s lower costs reflect operational efficiencies. A fact sheet enclosed with Ferranato’s letter notes that Liberty has 750 employees in Oregon and an annual payroll of more than
$54 million to service its $110 million a year workers’ compensation business. SAIF, with more than $310 million in earned premium, has 815 employees and an annual payroll of
just over $43 million. In other words, SAIF handles nearly three times as much premium, but has only 65 more employees. SAIF’s annual payroll is about $43 million, $11 million less than Liberty’s.

One ironic accusation in Liberty’s letter is the assertion that “SAIF will continue to damage the Oregon economy.” The truth is that SAIF is a major positive contributor to
Oregon’s economy. Abolishing SAIF would dramatically increase workers’ compensation costs for Oregon employers by more than $108 million a year. Such an increase would cost
Oregon’s economy thousands of jobs. Average employers workers’ compensation rates would jump by nearly 20 percent, according to the Oregon Department of Consumer and Business Services statistics.

Liberty’s aggressive attacks on SAIF, mounted now even though the election is still months away, suggest that Liberty
expects to have a tough time convincing voters abolishing SAIF is a good idea. Expect to see and hear even more attacks on
SAIF in the months leading up to the November election.

Liberty has until July 2 to submit 75,630 valid signatures in order to qualify Initiative 90 for the November election ballot.

Source: Associated Oregon
Industries, May 26, 2004