State
Blue Mountain Eagle
Wednesday, September 6, 2017
A9
PERS task force
solutions have
uncertain future
By Claire Withycombe
Capital Bureau
A task force appointed by Gov.
Kate Brown has come up with
some early ideas for reducing the
state’s unfunded pension liability,
but it’s not yet apparent how far
they could go.
Some proposals fl oated at the
task force’s most recent meeting
Monday involve substantial policy
changes, and Oregon’s House Re-
publican leader has already criti-
cized certain proposals.
Brown, a Democrat, has asked
the task force, which includes rep-
resentatives from both the private
and public sector, to reduce the
unfunded actuarial liability of the
Public Employees Retirement Sys-
tem by $5 billion.
The unfunded actuarial liability
is the amount by which the pension
system’s future obligations exceed
its ability to pay.
Most of the $24.2 billion un-
funded liability has already been
earned by public employees. Ac-
cording to a 2015 Oregon Supreme
Court opinion, benefi ts already
earned cannot be modifi ed by the
Legislature.
So the state must pay down
most of that sum by cutting costs
elsewhere in the budget or raising
revenue.
Suggestions from the task force
have included using some of the
state’s reserves and rethinking how
certain parts of state government,
such as educational institutions and
the state’s liquor control commis-
sion, are run or structured.
While some of the ideas task
force members fl oated at the most
recent meeting Monday involved
reducing costs, such as consolidat-
ing some of the state’s public uni-
versities and community colleges,
many ideas involved raising new
revenue to help pay off the un-
funded liability, such as a placing
a surcharge on liquor or on certain
state-issued licenses and permits.
Some of the ideas may require
legislative approval, and indica-
tions are they may face some push-
back. However, the task force has
about two more months before its
fi nal report is due to Brown Nov.
1, and task force meeting materi-
als note that “there is signifi cantly
more work to do between now and
then.”
The governor, in turn, is expect-
ed to choose which proposals to
bring to the Legislature.
A spokesman for the Oregon
House Republicans voiced disap-
proval of some of the early propos-
als in a prepared statement.
House GOP Spokesman Preston
Mann claimed the task force was
signing on to a “myth” that the way
to reduce the unfunded liability is
by raising revenue and argued in-
stead for having state employees
contribute “their fair share toward
their retirement accounts.”
However, attempts at curtailing
public employees’ retirement ben-
efi ts going forward stalled during
this year’s legislative session, de-
spite an early session effort by state
senators on both sides of the aisle.
State Sen. Mark Hass, D-Bea-
verton, an advocate for revenue
reform, said the state has already
attacked the “low-hanging fruit”
when it comes to PERS, such as
in 2003, when the Legislature cre-
ated a new tier of retirement bene-
fi ts that were scaled back from the
plans offered employees who had
been hired earlier.
Hass did not comment on spe-
cifi c proposals from the governor’s
unfunded liability task force, but
said he believes the unfunded lia-
bility problem could be addressed
with tax reform.
Despite failure of revenue re-
form in the most recent session, he
thinks with a different approach,
“evening out” the tax code could
allow the state to devote more mon-
ey toward paying down the unfund-
ed liability. In particular, Hass has
been critical of the volatility of the
income tax — the state’s primary
source of general fund revenue —
and its property tax structure.
Hass pointed to this session’s
transportation package as an ex-
ample of how an agreement on
taxes could be reached: a bipartisan
group of legislators hosted a series
of public meetings across the state
and ended up with policy proposals
that weren’t “conspicuous” back in
2015, when an attempt at a trans-
portation package failed during that
year’s long session.
“When the transportation pack-
age in 2015 was on deck, it looked
a lot different and actually less am-
bitious than the one we actually
passed,” Hass said.
Hass acknowledged differences
between transportation and tax-
es — especially when it comes to
public opinion. But Hass believes
legislators recognize the obstacles
in place, and that they are not “in-
surmountable” in the face of the
unfunded liability issue.
“It doesn’t mean we’ll just
throw up our hands and never fi x
it,” Hass said.
Capital Bureau
Cannabis products on display at the state fair marijuana exhibit in Salem Aug. 31. A regulatory snafu
prevented actual plants from being exhibited this year.
No pot plants at
state fair this year
By Paris Achen
Capital Bureau
After last year’s high-profi le
debut of award-winning cannabis
crops at the Oregon State Fair,
visitors this year may have been
surprised by the absence of plants.
“It is extremely unfortunate
because 30,000 people came to
the state fair last year specifical-
ly to see the cannabis display,”
said Pete Gendron, president of
Sungrown Growers’ Guild, citing
2016 state fair statistics.
A law enacted by the state Leg-
islature in May was intended spe-
cifically to sanction the display
of marijuana plants at the annual
state fair in Oregon’s capital city.
“The bill allows … compli-
ant licensees to exhibit at trade
shows,” Sen. Ted Ferrioli, the
bill’s co-sponsor said on the Sen-
ate floor May 10. “If you remem-
ber the 2016 Oregon State Fair …
did have some exhibits. This puts
it in statute, allows it and would
also specifically designate the
state fair a proper venue so long
as they maintain full compliance
with (Oregon Liquor Control
Commission) laws.”
Yet the OLCC, the state alco-
hol and marijuana regulator, issued
last-minute temporary rules that
effectively prevented organizers
from displaying any actual plants.
The rules require organizers to
submit an application and receive
agency approval for any partici-
pant in an exhibit at least 28 days
before the event date.
Notice of changes to the appli-
cation process was sent out Aug.
17, one week before the 10-day
state fair kicked off in Salem.
Last year, organizers of the
cannabis exhibit displayed plants
that had won awards at the Oregon
Growers’ Fair earlier in August.
This year, organizers displayed
cannabis-sourced products from
retailers. State rules prohibited
any of the products from being
sold or consumed at the state fair.
Part of the snafu with exhibit-
ing plants stemmed from a transi-
tion in the authority for regulating
the marijuana industry from the
Oregon Health Authority to the
OLCC.
“It was a system we weren’t fa-
miliar with,” said Mark Pettinger,
OLCC spokesman.
Four marijuana exhibit events
that preceded the fair were a process
of trial and error while the agency
refi ned temporary rules, Pettinger
said.
“It would reasonable to assume if
the state fair event is on the books
next year and we have a year under
belt for the industry and for us as
regulators, it would go a lot smooth-
er and be a lot easier,” he said.
Donald Morse, director of Or-
egon Cannabis Business Council,
which organized this year’s can-
nabis exhibit at the state fair, said
being barred from showing plants
was disappointing, but it is part of
“growing pains” for the industry
and for state regulators.
“That is OK because we wanted
to highlight what happens after the
plants grew and how it was used
in edibles and topicals so we have
those items on display,” Morse said.
Gendron said his guild will work
make sure there is “a robust plant
display at the 2018 Oregon State
Fair.”
OHA says it has cleared its Medicaid eligibility backlog
By Claire Withycombe
Capital Bureau
The state’s health author-
ity said Thursday that it has
cleaned up its Medicaid rolls,
terminating more than 54,000
people from the program.
In recent months state au-
ditors raised concerns that
Oregon Health Plan — the
Medicaid program that pro-
vides health care coverage to
the poor and other qualifying
groups — was providing bene-
fi ts to members who no longer
qualifi ed.
Oregon Health Plan pa-
tients must go through an an-
nual process — called “rede-
termination” — to have their
eligibility confi rmed. Oregon
had fallen behind on those
redeterminations and by late
May had a backlog of roughly
115,000 people.
Of that group, the agency
announced Thursday that it
found that 60,353 people were
still eligible for the program.
But 22,937 plan participants
were found to no longer qualify
for the program, while 31,895
cases were closed due to a lack
of response from the recipients.
Altogether, the agency says
that the closures due to patients
no longer qualifying for the
program account for less than
2 percent of the more than 1
million people on the Oregon
Health Plan and will not affect
the state’s current two-year
budget.
Auditors said in May that
each Medicaid enrollee in Or-
egon costs, on average, about
$430 per month.
Additionally, the agency
claims that all current partici-
pants are now on a “regular re-
view cycle,” and a backlog will
not continue.
According to the OHA,
Oregon Health Plan partici-
pants will have their eligibility
re-checked automatically by
the state’s new system, which
is an effort to integrate the el-
igibility determination process
for various safety net programs
administered by OHA and the
Oregon Department of Human
Services.
It seems that the Oregon
Health Authority is eager to put
the episode behind it. In the re-
port detailing completion of the
project, the agency pinned the
backlog issue on the failure of
Cover Oregon, which was sup-
posed to be a state-run health
insurance marketplace. Cover
Oregon, a costly failure under
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former Gov. John Kitzhaber,
was also expected to perform
eligibility renewals for Medic-
aid.
“These nearly 1 million
Medicaid renewals conclude
and complete the state’s recov-
ery from the failure of Cov-
er Oregon,” the report said,
adding that Cover Oregon’s
collapse and the dramatic ex-
pansion of the state’s Medicaid
population under the Afford-
able Care Act “overwhelmed”
the state’s health system.
The report caps off the ten-
ure of OHA Director Lynne
Saxton, who was asked to
resign by Oregon Gov. Kate
Brown after revelations of a
public relations and media
campaign to discredit a Port-
land-area Medicaid provider
surfaced in early August.
Patrick Allen, formerly the
head of the Department of Con-
sumer and Business Services,
has been named acting director
of OHA.
The news comes as a group
of Oregon House Republicans
continues to collect signatures
to refer Oregon’s plan for fund-
ing Medicaid to the ballot.
The legislation in question,
House Bill 2391, outlines as-
sorted revenues to pay for the
state’s program; the petitioners
want to refer parts of the leg-
islation, such as a 1.5 percent
tax on health insurance premi-
ums, to the ballot.
Their deadline to gather
nearly 59,000 signatures is
Oct. 5. If the petitioners are
successful, the issue will go to
the ballot in a special election
Jan. 23. A committee was ap-
pointed by the Oregon Senate
President and Speaker of the
House this week to write the
ballot title.
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