Austin Jenkins of the local NPR affiliate KUOW has filed another insightful piece on yesterday's announcement by the Department of Labor & Industries that, while the high costs of running the state's workers' compensation system are expected to rise by another 19.4 percent next year, the agency proposes an average 7.6 percent increase in 2010 with the difference covered by reserves.
Calling a decision to raise the tax rate as high as the projected cost increase "politically untenable," Jenkins notes "Washington's business lobby is demanding reforms to the state's workers' compensation system":
Originally Labor and Industries was talking about a 15 to 20 premium increase. That's because Washington's workers compensation fund has taken a billion dollar hit in the last year - due to higher costs and investment losses. But in the end, a double-digit increase during a down economy was politically untenable. So L&I is proposing a more modest 7-point-6 percent increase starting in January. Even so Kris Tefft with the Association of Washington Business says it's time to do something about the rising cost of taking care of injured workers.
Kris Tefft, AWB: "Probably the single most effective tool in other state's tool boxes for addressing long-term claims is offering the option of entering into a settlement agreement to give a lump sum or a structured annuity to an injured worker to resolve the claim."
The Washington State Labor Council strongly opposes that idea. But says it's open to discussing ways to rein-in costs.
Notwithstanding labor's expected but unexplained opposition to an effective option -- option! -- like final settlement agreements, an uncontroversial part of the workers' comp systems of 44 other states, it is promising to see the powerful interest group now willing to talk about curbing costs. It was not long ago the Labor Council was touting Washington's supposed "high benefits, low cost" system, a dichotomy heavily criticized then, and one that yesterday's rate announcement confirms is false.
But the future health of the system requires more than talk. That's why we called on the Governor and Legislature yesterday to act in January to reform the system, both for the immediate health of our economy and for the long-term sustainability of the workers' comp system itself.
