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Oregonians who buy own health insurance face big hikes in 2017

New premium requests from insurers spell trouble for Oregonians

Oregonians who buy their own health insurance face a second straight year of hefty premium hikes that could boost coverage costs by nearly a third.

Insurers want to boost premiums by 15 percent to 32 percent next year, according to a summary of rate requests submitted recently to the Department of Consumer and Business Services.

The state’s two top insurers in the individual market, Providence Health Plan and Moda Health Plan, are both proposing 30 percent average rate hikes that, combined, would hit more than 160,000 people, or two-thirds of those who buy their own plans but are not on Medicare.

The rate requests would not affect people who are on Medicaid or who receive coverage through their employer.

The premium hikes don’t take into account tax credits available to those with qualifying incomes. Last year about 40 percent of Oregonians in the individual market used the health insurance exchange, HealthCare.gov, to receive credits that can be used to reduce monthly premiums.

State regulators will accept public comment and review the rates before issuing a final decision. But the trend is not a positive one for consumers. The Patient Protection and Affordable Care act requires most people have coverage or face a penalty in tax time.

“For the next two months, we will analyze the requested rates to ensure they adequately cover costs without being too high or too low,” said Insurance Commissioner Laura Cali. “Our open process allows Oregonians to see everything we do and provide comments on the filings that affect them.”

For now, the specifics are daunting. Providence has proposed boosting its rates by an average 29.6 percent, coming on top of a 13.8 percent overall hike last year. As of February, Providence led the individual market with more than 100,000 Oregonians enrolled. A 40-year-old on a Providence silver plan pays $273 a month now.

Moda, meanwhile, has requested a market-leading average rate hike of 32.3 percent, coming on top of an average 25 percent rate hike approved last year. Moda reported about 60,000 members in Oregon’s individual market, and a 40-year-old on a Moda silver plan pays $307 a month now.

Health Net Health Plan of Oregon is the only insurer located in the state not to propose raising its rates. The firm is being sold to an out-of-state for-profit insurer, Centene.

Other rate hikes proposed by insurers range from about 15 percent by PacifiSource and Atrio Health Plans to 32 percent by Oregon’s Health CO-OP. The latter company, along with Providence, offered what agents considered some of the more attractive plans in 2016, with a $274 premium for a 40-year-old on a silver plan.

Driving insurers’ rate hikes last year were massive losses due to unexpected claims costs.

According to the state, people can search www.oregonhealthrates.org to submit comments and review rates.

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State rolls in more pot tax revenue than expected

The revenue department collects $6.84 million in January, February

Oregon’s Department of Revenue unwittingly marked unofficial “Weed Day” April 20 by announcing another better-than-predicted return in recreational marijuana revenue.

The state collected $6.84 million in taxes from sales of recreational pot in January and February — the first two months since a 25 percent tax on the product took effect. Tax collections exceeded state economists’ projection of $2 million to $3 million for the first year of taxation on the product.

The revenue represents nearly $27.4 million in sales by about 320 dispensaries since Jan. 4. Beginning Oct. 1, medical marijuana dispensaries were authorized to sell up to a quarter-ounce of cannabis flowers per day to anyone 21 or older under Oregon Health Authority’s early start program. No tax was collected on the product until Jan. 4. Medical marijuana remains tax-exempt.

The 25 percent tax ends when the Oregon Liquor Control Commission takes over the recreational sales program later this year and will be replaced with a 17 percent tax.

It’s unclear how much of the tax revenue will be distributed to schools, drug, alcohol and mental health services, state police and cities and counties — the beneficiaries of the state’s legalized marijuana law, Measure 91. State economists first have to calculate start-up and regulatory costs associated with recreational marijuana before determining how much will be left over for beneficiaries. Distribution is scheduled to begin in late 2017.

April 20 is an unofficial worldwide holiday for smoking pot. The term — 420 — was coined by a group of high school students from San Rafael, Calif., who had a smoke-out in 1971 in the Point Reyes forest, according to the Huffington Post. The timing of the revenue department’s report on tax revenue last Wednesday was unintentional, said department spokeswoman Joy Krawczyk.

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Oracle dissed own work on Cover Oregon

Oracle can’t hide documents giving an unprecedented glimpse into what the massive software company really thought about the Cover Oregon website debacle, a Marion County judge has ruled.

Some of the emails the firm had attempted to keep secret don’t look great for Oracle and its years of labor on Oregon’s failed technology project, according to copies reviewed by the Portland Tribune.

“This implementation is so screwed up,” wrote a software engineer for the company after a visit to Oregon in November 2013, more than a month after the website was supposed to be up and running. “I’m really at a loss as to how they could design such a system.”

Some of the new evidence doesn’t reflect well for Oregon, either. For instance, Oracle is citing a document in which the state assured the federal government the website was ready to go 12 months before officials pulled the plug on the project, saying it was too broken to fix.

Judge Courtland Geyer’s ruling releasing the Oracle documents was the latest in a series of legal setbacks for the company, which has been battling Oregon for nearly two years in a nasty court fight. The state seeks billions from the company over the $305 million health enrollment technology project that never launched, saying the company misled the state about the quality of its work.

In a Thursday hearing, the judge agreed with Oregon’s lawyers that the company had no legitimate reason to hide documents such as a developer’s email saying that without a software upgrade, the company was “rapoing (sic) the state of Oregon on something that will never work well.”

Oracle had blasted the state’s lawyers and the Portland Tribune after the newspaper published excerpts of the secret documents last month. The company’s top software architect had submitted a sworn statement saying why the documents needed to be confidential to protect trade secrets.

After Geyer’s ruling, however, the company issued a statement dismissing the excerpts’ significance: “This collection of one-off documents is the best the state has against a mountain of evidence, including publicly available documents commissioned by the state itself, that place the blame for the problems at Cover Oregon on state mismanagement, dysfunction and incompetence,” it said.

Oracle’s self-critique

But the newly released documents — 10 of which the judge ordered immediately released with a few redactions — don’t help Oracle’s case.

In October 2013, for instance, the documents show some company employees were alarmed at the poor and unfinished state of Cover Oregon and felt the company’s team on-site wasn’t responding with appropriate concern. This negative internal assessment came even as company executives were assuring the state that Oracle was fully engaged in Oregon and the website would be ready for the public later that month.

On Oct. 16, an Oracle senior vice president asked members of the firm’s “A-team” to help with the Oregon project, for a “no BS assessment” of the situation. One responded that issues the team had raised months before had not been addressed, and “major functional issues exist including basic functionality like communication between components.”

The Oracle team working in Oregon had “more or less ignored” the company’s software architecture specialists “and have very low priority on our recommendations and our needs,” wrote an A-team leader, Stefan Krantz. The team working in Oregon, he added, “is not understanding the ramification of the situation. ...”

Weeks later, the problems were elevated to Oracle’s top executives. A Cover Oregon technologist, in an email to an Oracle counterpart, blasted the company, saying “Oracle has failed in every single aspect of the project from project management, proper design and development all the way through delivery and deployment. Oracle should be embarrassed at ... what has been delivered at Cover Oregon.”

The email was forwarded to Safra Catz, Oracle’s CEO, who shared it with company co-founder Larry Ellison. Ellison, in a Nov. 16, 2013, email, told the company’s top software architect to address the problems. “l will give you whatever resources you need ... immediately and in quantity,” Ellison wrote.

But while Oracle has repeatedly claimed it had fixed the website’s problems by February 2014 — even putting a news release out to that effect earlier this month — an email chain shows that even as of March 15, 2014, the website was exhibiting a nearly 20 percent error rate in which users would be presented with a “Well, that didn’t work” message.

That particular error rate was fixed days later, the email chain said.

Did the state lie?

But not all the new information focuses on Oracle, which is why this case looks to get more complicated.

Even as Oracle was ordered to air more of its internal discussions, the company signaled that it would hold a microscope to Oregon’s missteps as well, citing what it called new evidence that the state misled the federal government over the website project in order to keep funds for the project flowing.

In August 2013, an update prepared for the federal government requesting further funding said the health enrollment website was “functional” and completed four months earlier, and only needed testing.

Asked in a deposition last month whether the state had completed a “functional” website in April 2013 as the document claimed, Oregon Deputy Attorney General Fred Boss replied “They did not, because it was not functional.”

Oracle is now using the information in a new federal lawsuit that seeks to knock out the state’s fraud and racketeering lawsuit against it. It says the state itself engaged in fraud by falsely claiming continued progress in order to receive federal funds.

Oregon’s lawsuit, the company says in its March 8 filing, is “essentially attempting to cover up serious breaches of its own obligations as a recipient of Federal funds.”

It’s not the first time the state has been accused of this. In 2014 the FBI launched an investigation after former state lawmaker Patrick Sheehan made a similar allegation. No findings have been announced.

So it’s clear the case soon could get messier, and nastier.

Last Thursday, Judge Geyer said he soon hopes to issue an order for the two sides in the case to mediate their differences rather than go to trial.

“I believe in this case it would be appropriate to require the parties to spend a day or two in good faith, in private, in the secrecy of mediation to see if there is an outcome that they can all live with.”

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Kaiser opens 400-employee 'contact center' in Hillsboro

To increase its presence in Hillsboro, and to consolidate all its redundant Portland metro area facilities, Kaiser Permanente Northwest has opened its Tanasbourne Regional Contact Center in North Hillsboro.

Kaiser’s newest 400-employee facility will house all of the region’s appointing and advice nurse services, as well as a physician-led virtual care team.

The opening of the contact center bolsters Kaiser’s Hillsboro services by combining efforts with the Westside Medical Center and the Hillsboro Medical Office.

“Bringing these services together in a single, state-of-the-art facility allows us to give our members a seamless experience whether they call for an appointment, health advice or a virtual visit with a physician,” said Belinda Green, Kaiser Permanente Northwest’s senior director of member relations. “We think of this not as a call center, but a service center that will ultimately enable a better connection between members and their physicians.”

Essentially, Kaiser is streamlining several services for new members to make previously tedious tasks — such as selecting a new physician, transferring prescriptions or setting up mobile access to personalized services on kp.org — possible in one phone call.

Additionally, the physician-led Regional Telephonic Medicine virtual care team has evolved to become an increasingly important point of access to care for patients.

The new facility will support that team with improved video and digital technology through a Mobile Health Partners program with Metro West Ambulance.

For this program, Metro West will dispatch paramedics for nonemergency visits to Kaiser patients’ homes, where the paramedic will facilitate video consultations with their Kaiser physician. Physicians stationed at the center conduct these and other telephone and video appointments. No in-person services are provided through the Tanasbourne center. Members who need to see a care provider or wish to speak face-to-face with member services should still visit a medical facility.

Formerly a Netflix call center, the new 49,000-square-foot Kaiser contact center is located in Hillsboro in part because the city’s advanced infrastructure met the contact center’s sophisticated technology and telephony requirements.

“The use of that space and addition of those jobs is a big positive for Hillsboro,” said city spokesman Patrick Preston. “It’s great to see Kaiser expanding its presence in Amberglen and Tanasbourne. We’re fortunate to have Tuality Health Care and Kaiser Permanente serving residents throughout Hillsboro, and to have great health care providers in the community.”

Along with bringing in Kaiser employees from six or seven or the other Kaiser facilities across the Portland metropolitan area, the new center will also provide ongoing career opportunities for Hillsboro residents. Currently, there are openings for a mental health therapist, three nurses and six call agents.

For more information, visit kp.org.

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Local United Way Loses its Largest Donor: Intel

As the season of giving comes to a close, one of the area’s dominant charities — United Way of the Columbia-Willamette — is making do without its dominant donor — Intel and its thousands of local employees and retirees.

Local United Way loses its largest donor: Intel

As the season of giving comes to a close, one of the area’s dominant charities — United Way of the Columbia-Willamette — is making do without its dominant donor — Intel and its thousands of local employees and retirees.

In September, Intel notified the local United Way it was terminating its fall workplace-giving campaign, says Keith Thomajan, the local United Way president and CEO.

That left a huge hole in local United Way funding. Intel, its staff and retirees contributed $6 million to the United Way of the Columbia-Willamette in 2014-15, 23 percent of its total fundraising, says Tripp Somerville, United Way spokesman.

It also left Intel employees without an easy way to donate money through payroll deductions to charities this year. Last year, about 1,300 Intel employees gave directly to United Way through the workplace campaign, plus a larger number who used United Way as a conduit to donate to other nonprofits of their choosing. Many used the program to tithe to their church.

United Way still hasn’t tabulated what it raised in the fall workplace giving campaign without Intel, Thomajan says, but early indications are it made out OK. The nonprofit laid off five employees who worked on the Intel campaign, he says, but it hasn’t reduced “by one penny” the amount it’s contributing to 70 area nonprofits that are part of its campaign against childhood poverty.

Other companies, including Kaiser, Umpqua Bank, Key Bank and Wells Fargo provided “significant new investments” to help offset the losses from Intel, Thomajan says. “Scores of them said ‘We’ve got your back; we’re going to find a way to do more this year.’ ”

Intel, which had a special commitment to United Way chapters where it has operations across the country, decided to go in a different direction with its charitable giving program, says Jill Eiland, public affairs director for the company’s Oregon operations.

Starting in early 2016, the company will roll out a new Intel Matching Gifts Program, which should result in more giving, Eiland says.

“We decided that we wanted to really provide greater flexibility for our employees and support the nonprofits of their choosing,” she says.

In the past, Intel employees around the country gave money through payroll deductions to their local United Way, with some going to the umbrella nonprofit group and some, where employees so chose, to other nonprofits.

Intel gave $1.5 million directly to the local United Way in 2014-15 and another $500,000 came from employees who selected United Way as their preferred nonprofit, Somerville says. Intel employees and retirees contributed another $4 million through United Way’s workplace giving program that was sent to their preferred nonprofits.

Nationally, Intel allocated $5 million to match donations to local United Way chapters, in proportion to how many local employees donated there. It wasn’t a dollar for dollar match, though.

Starting in 2016, Intel is taking its program in-house. Its foundation will match whatever donations employees choose, dollar for dollar, up to $5,000, Eiland says.

“We think the numbers are going to be higher,” she says. The new plan will allow giving year-round, Eiland says, and not just during one- or two-month United Way campaigns each fall.

Intel won’t be changing its other charity programs, including one that provides donations to educational institutions and one that provides money to organizations where its employees put in significant volunteer time.

Intel hasn’t yet worked out which nonprofits will be eligible for the new matching gifts program, such as religious congregations, Eiland says.

In 2013, the largest targeted nonprofit getting money through United Way of the Columbia-Willamette was the Church of Jesus Christ of Latter-day Saints in Salt Lake City, which got nearly $1.1 million through workplace giving campaigns, according to the United Way’s 990 federal tax filing. Much of that came from Intel employees, Somerville says.

The company offers high salaries, has a high number of Mormon employees in Oregon, and church members are expected to give 10 percent of their income to the church.

The second-highest recipient of local United Way funds was the Oregon Food Bank, which got $156,144 in 2013.

“Our pledge form allows you to designate the nonprofit of your choice, or to designate the United Way,” Somerville says. Churches are, and have always been, the leading recipient of charitable donations in the United States, he says. United Way views that as a service to boost giving, and doesn’t get any money from sending donations to other nonprofits.

Thomajan is hoping the United Way can get some of those 1,300 Intel workers who donated to United Way through workplace giving in 2014-15 to make it their preferred charity in 2016. In those cases, the Intel Foundation will match up to $5,000. However, that will be more difficult, as workplace campaigns focus a lot of attention and peer pressure to give to United Way.

When Thomajan came to his post at United Way four years ago, Intel and its affiliates provided about one-third of its total funding. Since then, the umbrella agency has diversified its funding more, he says.

In 2014-15, Intel provided 23.3 percent of the record $25.7 million raised by United Way, but $12.2 million of that was sent to other nonprofits, including churches. Of the $13.5 million directed to the United Way, Intel supplied 14.8 percent. Most of that went to the Breaking the Cycle of Childhood Poverty campaign, which involves 70 nonprofits that work with children and families.

Under Thomajan’s leadership, United Way has shifted to what some call a “community impact model,” in which donations are targeted to achieve more specific and concrete results. The idea was to target childhood poverty, in hopes that it will help stabilize families in need in the Portland area.

United Way is well-positioned to serve as a convener so various groups will collaborate in addressing the issue, Thomajan says. The organization brings money, volunteers and a niche as an umbrella for other nonprofits.

“United Way is really the only organization in the metro region that sits at the intersection of donors and corporations, the social sector — governments and school systems — and philanthropy,” he says.

United Way is in the second year of its 10-year campaign to address childhood poverty.

[email protected]

@SteveLaw/Trib

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Anti-abortion initiative closer to 2016 ballot

Government — Oregon Life United says it has more than the 1,000 required signatures to obtain a ballot title for the initiative, first hurdle in the process

SALEM — An initiative to ban state funding of abortions has passed the first hurdle toward a place on the 2016 ballot.

Chief sponsor Jeff Jimerson of Corvallis announced Friday that his group, Oregon Life United, had gathered the 1,000 signatures needed to obtain a ballot title for the initiative.

This marks the third time Jimerson has sought to send the initiative to voters. He failed to secure enough signatures in 2012 and 2014.

“Each time we are getting closer and closer,” said Alicia Marks, Oregon Life United spokeswoman. “We really do think we have a strong enough volunteer base this time to get it on the ballot for 2016.

Oregon Life United must obtain 117,578 valid signatures to place the initiative on the ballot.

About 40 percent of the nearly 5,000 abortions performed between January and October were paid for with state funding, according to Oregon Health Authority. The state paid about $1.8 million for a total of 3,556 abortions in 2013-2014, the most recent figures available Friday. Each procedure cost about $500.

Oregon Right to Life supports the initiative but has made no financial commitment to the effort, said spokeswoman Liberty Pike.

The organization has chosen to spend its resources on supporting pro-life candidates in the upcoming election and lobbying lawmakers, Pike said.

“What we have found is the system is set up so that it costs hundreds of thousands of dollars to get a measure on the ballot,” she said. “We have decided to use our resources in areas where we think we can get the best return on our investment.”

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Benefit companies wince over tax exemption

SALEM — Companies that would be exempt from a proposed corporate gross receipts tax say the exemption could undermine the reputation of a movement to encourage environmentally and socially responsible businesses.

The union-backed tax measure planned for the 2016 ballot would require certain corporations to pay a 2.5 percent tax on sales in Oregon greater than $25 million. The measure exempts companies registered with the state as “benefit companies.”

Legislation passed in 2013 allows corporations to register with the state as “benefit companies” in order to put shareholders on notice that the company will not only seek profits, but will also pursue other goals such as sustainability. These companies are supposed to work with a third party, such as the certification nonprofit B Lab, to assess their operations, and then document positive impacts in annual reports. Registering for the corporate status currently does not affect companies’ Oregon tax bills.

The proposed tax exemption generated concern among some proponents of the benefit company model, who said it could damage the program’s reputation if the designation becomes popular as a strategy to avoid taxes.

The tax break would apply to benefit companies, which have special status under state law, not to B corps certified by B Lab, which are part of an international movement of environmental minded companies. Many companies in Oregon seek both designations, which causes some to conflate the two terms.

“The B corporation movement is about having socially responsible companies, not getting tax breaks,” said Tom Kelly, president and owner of the remodeling and custom home construction company Neil Kelly. Neil Kelly is a registered benefit company, and Kelly said the exemption could impact “the B corp brand.”

“It certainly has the potential to attract companies that will become B corporations whose only intention is to get a tax break, which will dilute the value of the B corp movement pretty significantly,” Kelly said.

Nik Blosser, CEO of Celilo Group Media and chair of the board at Sokol Blosser winery, said he is also concerned about the exemption. Both businesses are registered benefit companies.

“We certainly didn’t become a B corp to get tax benefits, and I think that somewhat undermines the point for B corps,” said Blosser, who has not yet taken a position on the corporate sales tax proposal. “If the measure passes, I think we would want to advocate that the Legislature modify that part.”

Blosser said the current lack of enforcement by the Secretary of State’s Business Services Division could make it easy for corporations to register as benefit companies to get the tax exemption, without demonstrating positive social impacts. “There’s no one checking to see if you’ve done that,” Blosser said.

Ben Unger, executive director of Our Oregon and a chief petitioner on the tax initiative, dismissed the idea that the exemption could provide a loophole for corporations looking for ways to avoid the corporate sales tax.

“I don’t think we are,” Unger said. “I guess my point is there’s nothing that’s going to stop large, global corporations from avoiding taxes.”

Unger said Our Oregon included the exemption in the proposed measure to distinguish between huge multinational companies that avoid taxes and companies that are “doing their best to be a good corporate citizen.”

“U.S. corporations are hiding $2.1 trillion overseas that they owe taxes on in the U.S.,” Unger said. “But there’s a difference between those folks, those corporate boardrooms, and the small businesses in Oregon that fuel our economy and hire our employees.”

Our Oregon is gathering the necessary 88,184 signatures ahead of a July deadline to get the measure on the November ballot.

State Rep. Phil Barnhart, D-Eugene, said he supports the tax measure, even though lawmakers who passed the law to create benefit companies did not intend to create a tax benefit. “Most of the companies I’ve heard from, or we’ve heard from collectively, were not asking for a tax benefit,” Barnhart said. “They were trying to deal with this other issue, which is making sure that stockholders know that when you buy shares in this company, they’re going to be trying to do some other things in addition to trying to make you money.”

Barnhart said it is not yet clear corporations would register as benefit companies to avoid the tax, but “I can assure you that if it matters, we will be acting on it, probably in (2017) is my guess.”

There are currently more than 700 corporations registered as benefit companies in Oregon, according to a state database. However, the state has not tracked the amount of taxes paid by these companies or analyzed whether the benefit company exemption would cut into anticipated tax revenue.

The Legislative Revenue Office has estimated the tax could generate $2.6 billion annually.

Robert Manicke, a lawyer at Stoel Rives LLP who specializes in state and local tax law, said companies that sell high volumes of items with low profit margins such as grocery stores “would be affected strongly” by the tax plan.

Oregon is home to New Seasons Market, the first grocery store chain to be certified as a “B corp” by B Lab. Although the company has already done much of the work necessary to qualify as a “benefit company” in Oregon, the grocer has not registered with the state to become one. Staff were unavailable to comment last Wednesday, due to the Thanksgiving shopping rush.

Many existing benefit companies would avoid the corporate sales tax even without the exemption, either because they are too small or because they are not registered as “C” corporations, the only type obligated to pay the tax.

For example, Kelly said his business would not benefit from a corporate sales tax exemption because Neil Kelly is organized as an “S” corporation.

Shareholders of “S” corporations report profits and losses on their personal tax returns, while profits at “C” corporations are taxed both at the corporate level and when distributed as dividends to shareholders.

Celilo Group Media and Sokol Blosser winery would not have to pay the corporate sales tax because their annual sales are less than $25 million, Blosser said.

Kelly, who said he would probably oppose the tax measure even without the exemption for benefit companies, has been trying to meet with Gov. Kate Brown about options to remove the exemption.

“(Brown) was real instrumental in having this thing happen when she was secretary of state,” Kelly said. “She’s definitely invested in it.”

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Portland adopts paid leave for new parents

City of Portland employees can now get six weeks’ paid parental leave when a new child joins their family, under a new policy adopted Wednesday by the City Council.

Mothers and fathers can take advantage of the paid leave after the birth of a baby, an adoption or taking on a foster child.

“Parental leave has a positive impact on parents bonding with their children,” testified Anna Kanwit, the city human resources director. Some studies show it’s even more important for fathers, to get them more comfortable with their new child and establish a better long-term parental relationship.

Travis Powell, a city firefighter with a new three-month-old at home, was one of several city employees testifying in favor of the new benefit.

The council approved the policy by a 4-0 vote. Mayor Charlie Hales missed the vote but supports the idea, said Commissioner Amanda Fritz, who introduced the proposal.

City employees already were eligible for up to 12 weeks’ family medical leave, but that’s unpaid, unless employees use their sick or vacation pay.

The paid leave policy, which takes effect in January, will cost the city an estimated $413,000 to $502,000 a year.

Paid parental leave is commonplace in Europe but just starting to spread in the United States.

Portland joins Multnomah County, which recently approved six week’s paid leave for its employees. Other local governments, such as San Francisco and King County, Washington, provide 12 weeks’ leave. Some big corporations and European nations often provide leaves for longer periods.

Parental leave “is a necessity in a civilized society,” said Commissioner Steve Novick.

Others said the policy should be make it easier for the city to recruit and retain employees.

Fritz said she hoped that private companies in Portland will now add paid parental leave.

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