The Blind Boys of Salem

[September 17th, 2003] As the Nose walked up the steps of the state Capitol building last week, he detected the familiar odor of hypocrisy. It wasn't from inside the rotunda, however. Instead it came from the other side of Court Street, in the low-slung building that is home to Associated Oregon Industries.

AOI is the business lobby in Salem, and its swagger in the halls of the Capitol rivals that of Barry Bonds rounding third base. And year in, year out, AOI's mantra has become numbingly familiar. Run government more like a business: cut unnecessary programs, curb overly
generous benefits, eliminate inefficiencies.

So where, oh where, dear AOI, were you on Senate Bill 6?

In a session that too often seemed like a nightmare, SB 6 was a dream. The bill, which died in a Senate committee at the session's end, would have put all employees of public schools into a giant insurance pool, so that each one of Oregon's 198 school districts wouldn't have to, on its own, procure health, dental,
disability and life insurance for workers. The efficiencies for Oregon are so obvious they'd be apparent to the Five Blind Boys of Alabama.

Having nearly 200 districts each seeking essentially the same services has never made a lot of sense. As state Rep. Max Williams told one of the Nose's associates, "It would be as if Fred Meyer had 200 stores in Oregon and each worked its own deal on insurance."

Three separate studies showed that putting all the state's K-12 employees into a giant insurance pool would save between $65 million and $100 million per biennium.

That's not chump change. It would pay for at least 600 new teachers. Or health insurance for thousands of working poor. Or a portion of some left-field bleachers for a new major-league baseball stadium in Portland.

Which is why when the bill was introduced, the only vocal complaints came from the Oregon School Boards Association, the group that lobbies on behalf of local education boards. OSBA currently gets more than half of its $3.8 million budget from administering an insurance pool that covers smaller school districts.

The OSBA readily admitted its self-interest in preserving the inefficient status quo, and by the end of the summer, the bill enjoyed wide, bipartisan support and even won the backing of the Oregon Education Association, the statewide teachers union.

But not AOI.

In testifying against the bill during the last days of the session, Lisa Trussell, one of AOI's half-dozen registered lobbyists, explained that the organization's free-market philosophy is so strong that it believes all employers, including public employers, should continue to have a choice of insurers, even while conceding that the current system might not be the "most efficient."

If that logic doesn't pass your sniff test, there's a reason. As Trussell noted later in her testimony, "We are not aware of too many of our members who have the benefit design that's been proposed in that bill." Translation: Among AOI's dues-paying members are several insurance agents and underwriters who stand to lose a bundle if they're cut out of the school districts' redundant insurance business.

"The $100 million in savings is going right to the private sector," Williams says. "It's the insurance companies that are getting the grease."

Put another way, government efficiency is great until it hits the pocketbooks of AOI's pals.