City mulls charging builders who offer no health coverage

For seven months, a committee formed by Commissioner Sam Adams has been meeting twice a month, writing a draft City Council resolution that would impose a new tax or surcharge on building contractors - including companies working on city projects and, potentially, companies working on private, noncity projects.

The surcharge, if adopted by the council, would apply only to firms that do not offer health insurance to laborers. The money would help fund Multnomah County's health clinics for the uninsured.

Adams says a surcharge would be justified because when companies don't offer health coverage, it is society that picks up the costs for uninsured injured workers. 'There is a problem in this community in terms of providing access to health care,' he said.

Critics, however, say the push is designed to force contractors to go union - because unions offer health plans to their members.

The committee was 'brought about by the unions. The agenda was the unions'. It was chaired by the unions, and the only people in attendance were (from) the unions - so what would you say?' said Faye Burch of FM Burch and Associates, a contracting consultant who recently found out about the committee and attended a meeting. 'I'm not opposed to unions, but I am opposed to forcing people to go one direction or another.'

Adams, however, said the committee, despite being composed almost entirely of union leaders and representatives of union-affiliated organizations, had nothing to do with boosting union membership, saying, 'That would not be appropriate.'

San Francisco led the way

Based on a concept called 'best-value contracting,' the group is named the Best Values Committee, according to Adams. It was inspired by an ordinance in San Francisco that requires bidders on city contracts to meet certain qualifications, including offering health coverage.

The local push for such a 'responsible contractor' ordinance has been spearheaded by Cherry Harris, an organizer with Operating Engineers Local 701.

'The basic thing is to say you shouldn't be shifting the cost of health care (to the general populace) if you're at the public trough,' she said.

Currently the draft City Council resolution prepared by the committee would apply only to city-funded and Portland Development Commission projects. But the committee is also researching whether such a requirement would be legal for private, noncity projects. 'It's something we're looking into,' said Terry Richardson, the Adams aide who has been shepherding the committee.

The details are still hazy on whether the surcharge would legally be considered a fee or a tax that likely would go to voters, Richardson said. The city attorney's office 'initially' advised the committee that it would probably be considered a tax, Adams said. It is unclear how such a tax would be calculated and how much money it would generate for county health clinics.

Adams said the hope is that the employees of contractors who pay the surcharge would receive priority access to county health clinics. He said he recently met with county health director Lillian Shirley and 'she's really responded in a can-do manner.'

In addition to Richardson, the committee is staffed by three employees of the city's Bureau of Purchases as well as a deputy city attorney. Chaired by Harris, it also includes representatives from several other unions, including the International Brotherhood of Electrical Workers, Laborers' International and the United Brotherhood of Carpenters. In addition, there are representatives of two labor-affiliated groups: Jobs With Justice and Metropolitan Alliance for Common Good, a coalition of churches, unions and nonprofits.

'We're hoping to create some coverage for the workers on these projects, bring contractors up to the same level,' said James Kinniburgh, a co-chairman of the Metropolitan Alliance for Common Good, who works for Central City Concern.

'Significant concerns' exist

According to Harris, the contractors' group Associated General Contractors is also a committee member. However, Jessica Harris-Adamson, a lobbyist for AGC, said the group has 'significant concerns' about the proposal, including whether it would be legal.

Another critic is James Posey, a former mayoral candidate who, after attending a recent meeting with Burch, fears that the proposal will hurt small contractors, minority workers, and taxpayers and consumers who, he argues, would pay higher costs.

He says that because unions offer health plans, it may be easier for contractors to go union rather than get coverage of their own or pay a tax. That concerns Posey, who maintains that, locally, the building-trade unions have a history of being unfriendly to minorities. City officials 'have no idea what kind of impact this is going to have on us,' said Posey, who is African-American.

Adams, however, said any such ordinance would be crafted in a way that would ensure bidders are not discouraged from doing business with the city, and to make sure that minority businesses are not hurt. 'We have a lot more research to do before we can even have a meaningful conversation with the community,' he said. 'This is something that I intend to take my time implementing.'

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