Cover Oregon

Pierce Dumps Trump as Gubernatorial Debates Loom

GOP gubernatorial candidate Bud Pierce jettisoned his endorsement of Donald Trump on the run-up to this Saturday’s first debate with Governor Kate Brown in Bend. Four more debates will follow into mid-October.

GOP gubernatorial candidate Bud Pierce jettisoned his endorsement of Donald Trump on the run-up to this Saturday’s first debate with Governor Kate Brown in Bend. Four more debates will follow into mid-October.

Few people aside from Donald Trump believe the unconventional GOP presidential candidate can capture Oregon in the November 8 general election. Now Oregon’s GOP gubernatorial candidate Bud Pierce has joined the chorus.

Pierce withdrew his endorsement of Trump this week, claiming the New York real estate magnate isn’t unifying the Republican party and is driving away Hispanic voters. Pierce says Hispanic voters have a natural attraction to political conservatives and he is actively seeking their support to upset Governor Kate Brown.

In an interview last month, Brown urged Pierce to disavow Trump and “do the right thing.” Whatever the right thing might be, Pierce stopped short of pledging to vote for Democrat Hillary Clinton. He said he won't cast a ballot for anyone in the presidential race this year.

Jacob Daniels, Trump’s Oregon campaign chairman and perhaps the only person in the state who thinks his man will win here, dismissed Pierce’s dropped endorsement as insignificant.

The most recent public polling shows Brown with a comfortable double-digit lead over Pierce, but some Oregon Democrats have been uneasy over her largely invisible campaign while she hit the campaign fundraising trail. Pierce hit the airwaves with hard-hitting TV ads last month. Brown went up in the last few days with a softer ad that describes her political start as a children’s advocate and her achievement s governor boosting state K-12 school funding.

Brown and Pierce are scheduled to square off in their first face-to-face debate on Saturday in Bend, which may only rate second billing to home football games in Eugene and Corvallis. The gubernatorial candidates debate again September 30 in front of the Portland City Club, October 6 in Eugene, October 13 in Medford and October 20 in Portland.

Pierce has called for fresh thinking in Salem while Brown has touted her leadership as the successor to John Kitzhaber, who resigned at the beginning of his unprecedented fourth term. No seminal issues have created a sharp division in the race, though the Oregon-Oracle $100 million settlement of the Cover Oregon fiasco may have averted a flash point in the race. The settlement that involved six separate legal actions came just before Brown was scheduled to be deposed.

The debates are likely to underscore Pierce’s opposition to and Brown’s endorsement of Measure 97, the initiative that would impose a gross receipts tax on corporations with more than $25 million in annual sales in Oregon. Proponents and opponents of the tax measure are waging a vigorous campaign that pivots on how much of the tax will filter down to small businesses and ultimately Oregon consumers. Early polling indicates the measure has strong support.

The gubernatorial candidates should be pressed on how they would respond if the tax measure passes or fails. Measure 97 is projected to generate $3 billion in new state tax revenue annually, which would more than plug the state’s anticipated $1.5 billion biennial budget hole. However, the state will face severe spending challenges on education and health care spending if the measure fails.

As the debates unfold, a key target for each candidate will be attracting non-affiliated voters. Brown can generally count on the Democratic majority in urban areas from Portland to Eugene. To win, Pierce may need to catch some of the same populist wind that propelled voters in Oregon to support Trump and Bernie Sanders.

The Risky Business of Government Risk-Taking

Risk-taking in government can be risky, as the authors of the Cover Oregon fiasco discovered.

Risk-taking in government can be risky, as the authors of the Cover Oregon fiasco discovered.

Government risk-taking is risky business. If government officials take a policy or program risk and it flops, they are criticized for wasting taxpayer money. If officials avoid taking a risk and a problem festers, they also get criticized for wasting taxpayer money.

Dick Hughes, editorial page editor for the Statesman Journal, says risk-taking is a good idea for government. "If we want government to succeed at a higher level, we must be willing to tolerate failures," Hughes said. "That sounds counter-intuitive, but most great leaders also have a string of failures – ones from which they learned.” 

That sounds good in theory, but maybe less so in practice. In many ways, the deck is stacked against government risk-taking. My 15 years in government service says no risk-taking, however successful, goes unpunished.

It is hard to quarrel with brickbats aimed at foolish risk-taking such as Cover Oregon's over-reaching attempt to build a health insurance exchange website. Other risk-taking, especially the kind that might take a while to prove out, still earns "gotcha" reporting in the media. Many public managers, who are no fools, quickly grasp the odds are low for risk-taking in government that earns kudos.

There is room for reasonable risk-taking in government, but it requires planning, strategy and discipline, not taking a spin on a roulette wheel. Here are some suggestions based on my experience:

•  The risk should result from a consensus. Even good ideas get better when a diverse team vets them and frontline people have a chance to suggest them. When I worked as part of the Executive Department's management team under Fred Miller, we launched the "Good Ideas Program" (we couldn't think of a better name), which encouraged fresh thinking and responsible risk-taking. None of the ideas were revolutionary, but many were very good and made a noticeable difference in program efficiency and effectiveness.

•  Risk-taking must be able to pass what I call the "front-page test." You should be able to make a cogent defense of the risk that would stand up in the light of front-page exposure. If an idea couldn't withstand that kind of public scrutiny, it probably isn't worth trying.

•  Reduce a bright idea to writing. The idea may sound good until you start laying it out on paper. When you write about an idea, you will think it through more clearly –  the rationale, the methods, the answers to tough questions and the results you can realistically achieve. If you can fill in those blanks, you probably have an idea worth considering and implementing.

•  Make sure someone is accountable for the good or bad. There will be plenty of people eager to crowd into the picture of a ribbon-cutting, but few willing to be seen on the podium explaining a failure. Make sure the risk has a clear chief risk-taker. Also make sure he or she won't be tossed to the wolves if there is a failure.

If lawmakers want public managers to take reasonable risks, they need to give them the elbow room to succeed or fail and not pounce on them if they fail. They need to accept some of Dick Hughes' advice and regard failure as a step toward ultimate success.

That may be harder to do for the news media, but at least reporters and editors can provide a context for risk-taking and explore lessons learned, not just scapegoats to blame.

Risk-taking will always be risky. That's why you need to do everything possible to make sure the benefits outweigh the risk and responsible risk-takers aren't skewered for taking risks.

[This blog was based on a post written by CFM Senior Partner Dave Fiskum for his personal blog, Perspective from the 19th Hole, and it draws on his extensive experience working for state government and as an Oregon lobbyist.]


With PERS Benefits Off the Table, Time to Reduce Costs

Oregon's gamble on trimming public retiree benefits failed and it now faces a $13.75 billion Public Employee Retirement System deficit, with few ideas on the table of what to do next. Photo by The Oregonian. 

Oregon's gamble on trimming public retiree benefits failed and it now faces a $13.75 billion Public Employee Retirement System deficit, with few ideas on the table of what to do next. Photo by The Oregonian. 

A lot of hand-wringing, but not much action has followed the Oregon Supreme Court's decision invalidating many of the Public Employee Retirement System changes aimed at reducing the state's unfunded liability.

Public employee union officials are clucking, "We told you so." Legislators are conceding there is little more that could be done to trim retiree benefits. And state and local public agencies are bracing for a round of stiff PERS contribution rate hikes in 2017.

If you can't touch retiree benefits, all that's left is reducing costs associated with PERS. And lo and behold, the legislature is sitting on a bill that backers say could save $2.7 billion over the next 20 years in expenses to manage public retirement investments.Under Senate Bill 134, an Oregon Investment Department would be formed as an independent agency, much like SAIF Corporation. The department would be overseen by the Oregon Investment Council and responsibility to administer public retirement funds would fall to a professional investment manager, not the state treasurer. The treasurer would be the vice chair of the Council.

Even though this set-up would require hiring more staff members to manage a portfolio and assess risk, it would enable Oregon to free itself from the higher-priced consultants it pays for now. One benchmarking analyst said Oregon is a “high-cost fund compared to its peers, in large part because of Treasury's heavy reliance on outsourcing.” This is where the projected savings comes into play.

Cost-cutting has the drawback of not appearing to reduce the unfunded liability, but the advantage of reducing the outflow of cash to manage public retirement funds, while "in-sourcing" investment management duties.

Republican lawmakers may fret about hiring more state workers, but they may see increased local employment as a better alternative than sending big sums to Wall Street investment management firms.

The legislation, introduced by Treasurer Ted Wheeler, nearly passed in the short 2014 legislative session. The Oregon Investment Council expected it to fly through the 2015 session. But it hasn't.

Senate President Peter Courtney has sat on the legislation this session out of fear of creating another "Cover Oregon" calamity. But that was before the Oregon Supreme Court ruling on so-called PERS reforms. Now the legislature is staring at a financial tsunami far worse than Cover Oregon.

Wheeler's uncertain political status may be another contributing factor. Deemed constitutionally unable to run for another term as state treasurer, Wheeler appears to be considering his options. Many of those options could involve other elected officials – in the governor's office and in key legislative leadership positions. These potential opponents may not feel a need to give Wheeler a perceived "political victory."

While Courtney's reluctance and other elected officials' wariness are part of the normal political process, the PERS problem may force everyone to rise above "normal."

At a minimum, giving the Oregon Investment Department and the savings it might generate a second look could form the basis of a broad coalition business-labor coalition willing to find ways to nibble away at the problem without threatening retiree benefits. It seems like a much better use of time than hand-wringing.


Behind the Scenes of a Gubernatorial Debate

The Oregon Association of Broadcasters hosted a gubernatorial debate that revealed sharp differences between incumbent Democratic Governor John Kitzhaber and his Republican challenger Dennis Richardson.

The Oregon Association of Broadcasters hosted a gubernatorial debate that revealed sharp differences between incumbent Democratic Governor John Kitzhaber and his Republican challenger Dennis Richardson.

Hosting a live political debate starts with convincing candidates to attend and extends through coordinating the format and posing provocative questions. Over the past few weeks, CFM had the opportunity to assist the Oregon Association of Broadcasters (OAB) organize and stage the September 26 gubernatorial debate in Sunriver.

There were numerous conference calls and lots of personal persuasion that resulted in the debate, which sparked sharp exchanges and defined significant differences between Governor John Kitzhaber, seeking an unprecedented fourth term, and his GOP challenger Dennis Richardson, a state legislator from Central Point.

CFM staff researched previous political debates to discover what formats worked best and made recommendations to OAB and the Kitzhaber and Richardson campaigns. They worked closely to ensure everyone involved was comfortable with the process and the program to avoid any awkward last-minute back-outs.

Special attention was given to what questions were asked. CFM staffers took the view that questions should reflect what Oregonians want to know from candidates. They aided OAB in canvassing broadcasters statewide for the most pertinent and sharp-edged questions. Working with debate moderator Matt McDonald of KTVZ, they winnowed more than 90 questions submitted by broadcasters to the ones actually asked of the candidates.

The debate started with a haymaker, "How would each candidate assure Oregonians that your administration will operate in an ethical manner?" The question arose from recent controversial allegations around in-kind contributions received by both campaigns that may violate election reporting law.

Richardson lambasted Kitzhaber for allowing one of his transportation advisers to receive $500,000 in consulting fees from an engineering firm working on the Columbia River Crossing. Kitzhaber snapped back with an implication that Richardson may have a problem with powerful women.

As the debate proceeded, Kitzhaber's emphasized his accomplishments, including helping Oregon pull out of the recession and expanding access to health care. Richardson focused on the controversies surrounding Kitzhaber's term in office, including the Cover Oregon website debacle. 

Kitzhaber and Richardson further disagreed over additional cuts to PERS benefits and support for Measure 88, which would allow driver's cards for individuals without proof of legal residency.

More than 250 radio and television stations carried the debate to every corner of Oregon. It also was broadcast nationally on C-SPAN.

Kitzhaber Keeps Pressing Health Care Reforms

Governor Kitzhaber and Kaiser CEO Bernard Tyson agree the health care business model is broken and one major reason why is the separation of care for physical and mental illnesses.

Appearing together at the Portland Business Alliance's annual breakfast, Kitzhaber and Tyson stressed the need to move from a "volume-driven" approach to a model that offers better care at more affordable prices.

The Portland Business Journal quoted Tyson as saying, "There is a mental health challenge we're working on, how to reattach the head to the body." Tyson said physical and mental illness is treated in separate locations, using separate records, even though 45 percent of physical health visits indicate a need for mental health services.

Tyson also said fee-for-service medicine needs to be "thrown out the window."

Kitzhaber touted the benefits being achieved through coordinated care organizations, which he credited for shrinking annual cost increases in care from 5.4 percent to 3.4 percent. The governor noted the 16 current CCOs care for 900,000 lower income Oregonians and are engaged in integrating physical, mental and dental care. He said he next wants to expand CCO cover to public employees and teachers and ultimately to the entire health insurance market.

Internet Voting and Cover Oregon

Oregon lawmakers are taking the first tiny steps to explore Internet voting in the shadow of the Cover Oregon website debacle. The two issues really don't deserve to be linked.

Voting via the Internet has gone on for business for years. Shareholders routinely cast ballots online for acquisitions, financial changes and corporate board members. Voting fraud is rarely an issue.

It is common for many Americans to purchase goods and conduct personal banking online, both of which require security measures.

People vote, buy and bank online because it is convenient.

No question that databases can be hacked, as apparently happened recently in the Oregon Secretary of State's office. That's a fair concern. Pointing to Cover Oregon's balky beginning online not so much.

Cover Oregon's struggle to get its web presence in order really has nothing to do with setting up an online voting system for registered voters. Yes, both may be complex, but not really comparable. Cover Oregon is an application portal that is supposed to walk people through various steps to evaluate various health insurance options and determine their eligibility for subsidies. A voting system allows people to cast their "ballot" online, with the only variability being the candidates and measures that are on their local "ballot."

The Weed, Guns and Booze Session

Legislator e-letters to constituents are signaling the 2014 session will take up legislation relating to gun control, pot legalization and liquor privatization. Those issues may make the headlines, but the real work of the session is to refine biennial budgets — yet again, with fewer resources than budget writers expected at the end of the last session. 

The arcane process of state budgeting is hardly the stuff of eye catching headlines — in the paper or in constituent newsletters. Still, it’s true that even-year legislative sessions have inescapably become the second-chance opportunity for legislation that didn’t quite make it through the hoops at the longer, odd-year regular session. It also becomes the last chance to do something legislatively before a major issue shows up on a November general election ballot. And the short session offers an opportunity to pass a bill on a topic that has captured the moment.

Gun background check legislation falls into the second-chance category, while pot legalization and liquor privatization belong to the last-chance category. Faced with the prospect of potentially popular initiatives, lawmakers are considering pot and liquor bills that offer an alternative.

Catch-up legislation to the Cover Oregon website debacle heads the opportunity category.

The Columbia River Crossing commands its own special category — the last-ditch, Hail Mary category. After the Washington legislature failed to approve funding for an I-5 bridge replacement at its regular session last year and is unlikely to do so in its session currently underway in Olympia, Oregon is left with a choice of whether or not to step out on its own. Opponents have stoked fears of the risk to Oregon taxpayers and those trepidations seem to be hitting the nerve in a number of former legislative supporters, including Senate President Peter Courtney. One Capitol wag said the project isn't dead, but is a "walking zombie."

Oregon’s Holiday Wish List

Like children, policymakers in Oregon make out holiday wish lists. Here are some the wishes we think are on the list.Children across Oregon are preparing their lists for Santa ahead of the holiday next week. Legislators and the governor, in preparation for the February session and election year ,are developing their own wish lists — none of which are likely to stop with “my two front teeth.”

Here are a few items that may find their way onto policymaker wish lists this holiday season:

Money for the General Fund

A perennial wish for almost all policymakers is additional money to spend in the upcoming session. Each member has his/her policy priority and nearly every one comes with an additional resource request. Despite increased revenues from the special session, legislators will arrive in February to find few uncommitted dollars available for their shiny priorities. Legislators and the governor will be awaiting the revenue forecast with the same anticipation of children on Christmas Eve.

Oregon Finds Itself in Dunce Chair

Oregon finds itself sitting on the unusual and embarrassing dunce chair for shortcomings in healthcare and education reforms.

At times, Oregon under Governor John Kitzhaber has seemed like the prize pupil of the Obama administration. But recent events have plopped Oregon on the dunce chair.

Oregon may be dead last in enrolling zero people online for health insurance under its health exchange, Cover Oregon. And now the U.S. Department of Education is threatening to withdraw the state's waiver from complying with the No Child Left Behind education requirements. 

Neither represents a policy divergence between Oregon's Democratic government and the Obama team. They reflect a bad poker hand.

Like the federal health care website, Oregon's electronic health insurance portal hasn't performed.  Oregon has pushed to enroll people using paper applications. And the state has added significant numbers of Oregonians to the Oregon Health Plan.

Kitzhaber said the state is too far downstream to change computer consultants, but promises a full accounting when the Cover Oregon website is up and running as intended. The governor has enlisted former Providence CEO Greg Van Pelt and Oregon Health Authority Director Bruce Goldberg to lend their management and medical expertise to unsnarling the IT logjam.