September 21, 2009

OLYMPIA… Another proposed rate increase for workers' compensation insurance is worrying Washington business owners, workers and legislators.  

Today the Department of Labor and Industries recommended a $117 million workers’ compensation tax increase for the upcoming year. Republican members of the state Senate Labor, Commerce and Consumer Protection Committee warned such a steep tax hike will harm employers and workers, and called for major reforms to the state’s workers’ compensation system to bring costs under control.   

“Washingtonians’ number-one concern right now is the economy and keeping their jobs,” said Sen. Janéa Holmquist, R-Moses Lake and ranking Republican member on the committee. “Our workers’ compensation taxes are already high. Unreasonable administrative cost increases and a failure to return people to work in a timely manner have led to out-of-control costs.” 

While the total number of claims filed has fallen more than 50 percent since 1990, claim management costs continue to explode, with administrative costs up 28 percent in the past year alone. 

“At a time when our economy is trying to recover, the most irresponsible thing we could do is levy a job-killing, multimillion-dollar tax increase on our employers and their employees without first reforming the serious flaws in the workers’ compensation system,” said Holmquist. 

“Workers and employers need a system that is more flexible, less costly and helps get employees back to work sooner.”  

Washington is one of the few states where the workers' comp system is part of a state-run monopoly. Other states, where there is private competition in the workers' comp market, are experiencing rate decreases. 

Sen. Jim Honeyford, R-Sunnyside, warned that increasing workers' comp taxes here, while other states are lowering theirs, will drive businesses out of the state and ultimately slow Washington’s recovery. 

“This will only discourage local employers like Boeing,” said Honeyford. “Our state is bleeding jobs; our expensive workers' comp system is one of the biggest costs Washington employers face. 

“Raising these costs even further, without addressing the inefficiencies of the system, will undoubtedly impact our employers' ability to protect much-needed jobs.” 

“It’s important to remember workers pay into the system,” added Holmquist. “Approximately 25 percent of workers’ comp costs are paid by employees, so reforming the system will also save workers money.” 

Sen. Curtis King, R-Yakima and member of the committee, noted several reforms working in other states should be implemented here. 

“Washington is one of the few states which prevent employers, employees and L&I from settling claims for a lump sum, which has proven to be a successful way to resolve claims,” King said. “This is just one of several ideas for trimming the program’s expenses. Instead of focusing solely on refilling state coffers, lawmakers and others should view this as an opportunity to fix the system and reduce costs without reducing the benefits that injured workers need most.”

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For more information contact Booker Stallworth
at (360) 786-7536 or stallworth.booker@leg.wa.gov.
Please visit our Senate Republican Caucus Web site at www.src.wa.gov.