Olympia Business Watch

Brunell: We shouldn't be surprised that Idaho wants our employers

Idaho Gov. Butch Otter touched off a political firestorm with his "Love Letter to Our Neighbors," AWB President Don Brunell writes in his weekly column.

But it should not come as a surprise that Idaho or any other state wants to lure away Washington's employers, especially its plums like Boeing, Costco, Microsoft and Starbucks. It's a competitive world.

Boeing's decision to move some of its production to South Carolina was a wake-up call, Brunell writes.

Otter's love letter is yet another wake-up call.

"Washington, like other states, has its advantages as well as its drawbacks," Brunell writes, noting the state's skilled workforce, access to research and technology and quality of life -- as well as its high business costs, including the business and occupation tax, workers' compensation and unemployment insurance.

"The constant recruitment isn't going to stop," Brunell writes.

Read the full column here.

Sonntag: State must look at big picture when it comes to money

Imagine a business the size of Washington state without a chief financial officer.

Unlikely as it may seem, that's exactly the scenario in which Washington finds itself, State Auditor Brian Sonntag said Thursday at AWB's weekly Lobby Lunch meeting.

Although there is an Office of Financial Management, it's a budget office, Sonntag said, and not one with the powers of a true chief financial officer.

As the state struggles to balance its budget following the recession, adding an office with that capability is just one several things that officials could do to better prepare for the future, he said.

Plenty more ideas could emerge soon as the Auditor's Office works through a plan to evaluate 30 state government programs between now and June 2013.

The programs include major components of the state's education, social service and health-care systems, as well as the workers' compensation system.

Business calls on lawmakers to end the raid on workers' comp trust fund

Starting a new farm worker intern program is not a bad idea.

Using money from the state's workers' compensation trust fund to pay for its administration is.

AWB's Kris Tefft and three others representing the business community called on lawmakers Thursday to stop the expansion of what has become a decade-long raid on the workers' comp trust fund.

The fund is supposed to pay claims for injured workers, but it has turned into something of a cookie jar for lawmakers.

The proposed pilot farm worker intern program contained in SSB 6349 would represent the latest assault on it.

Members of the business panel asked legislators in the House Health & Human Services Appropriations Committee to either find another source of funding for the intern program, or drop it entirely.

Sen. Tom: Public expects us to 'do something different'

Democrats hold a clear majority in the Washington state Senate, but they have yet to coalesce around a plan for solving the state's budget crisis, Sen. Rodney Tom said Thursday during AWB's weekly Lobby Lunch meeting.

It's apparent by now that tax increases will figure prominently in the final solution, but details about which taxes -- broad ones such as the sales or targeted ones like sin taxes and tax incentives -- are far from clear, said Tom, D-Medina, vice chair of the operating budget for the Senate Ways & Means Committee.

"I have no idea what direction we're going to go," Tom said.

His preference would be to target sin taxes and tax incentives that may not be giving the benefit that was expected.

That's the opposite view of Rep. Kelli Linville, chairwoman of the House Ways & Means Committee.

Linville, D-Bellingham,told AWB that she favors a small, across-the-board sales tax increase that would go away when the economy improved as opposed to numerous smaller tax hikes aimed at specific targets such as the oil industry.

It's not possible to "nickel and dime our way" until the economy improves, Linville said.

AWB event helps HR professionals get up to speed in Olympia

Workers' compensation, unemployment insurance and other workplace issues were front and center at the AWB/Society of Human Resource Management 's HR Day on the Hill Wednesday. Nearly 70 HR professionals from around the state toured the Capitol, met with legislators and participated in the event at AWB.

AWB Government Affairs Director Kris Tefft kicked off the event with an overview of legislation that could affect every workplace in the state, including:

• HB 2444, sponsored by Rep. Brendan Williams, D-Olympia, mandating educational leave for parents with children in school.

• HB 2764, sponsored by Rep. Steve Conway, D-Tacoma, mandating leave for employees with H1N1 flu.

• HB 2805, sponsored by Rep. Timm Ormsby, D-Spokane, requiring prevailing wage paperwork to be filed by contractors on public works projects using out of state prefabricated items. 

• HB 3145, sponsored by Rep. John McCoy, D-Tulalip, an AWB-supported bill that strengthens the Department of Labor and Industries' enforcement of wage complaints

• HB 3024, also sponsored by Conway, mandating 30 minute meal and rest breaks for hospital employees.

Donna Steward, AWB government affairs director on unemployment and health care issues, shared her insights into those two key issues. Steward said Washington is on the verge of enacting an important piece of health insurance reform. HB 3015, sponsored by Rep. Eileen Cody, D-Seattle, would allow Washingtonians the opportunity to purchase health coverage from across state lines. The bill is moving in the House with bipartisan support and may be up for a floor vote in the coming week. 

Steward warned against expanding unemployment insurance benefits under provisions for employees who voluntarily quit their jobs. Additionally, some employees who are fired for cause from their jobs are still getting benefits, paid by their employers.

Peter Bogdanoff, Gov. Chris Gregoire's executive policy advisor on labor issues, also addressed the group, stressing that the budget was the governor's top priority.

Brunell: Best way to help the unemployed? Create jobs

The best way to help those who are unemployed is to create new jobs, AWB President Don Brunell writes in his weekly column.

But employers can't spend money on hiring if they're paying it into the state's unemployment system instead.

And yet that's exactly the scenario that Washington businesses are facing right now. Many businesses were forced to lay off employees to survive the recession, which meant more workers received unemployment benefits.

State officials need to replenish the rapidly diminishing unemployment trust fund so what do they do? Raise taxes.

It's the ultimate no-win situation, Brunell writes. A true Catch-22.

And it would only be made worse if lawmakers chose now to expand benefits.

Read the full column here.

Lawmakers say it's time to fix workers' comp and UI

Rep. Steve Conway pledged to work with the business community to resolve some of the problems with Washington's workers' compensation system.

"Does it need reform? Yes," Conway, D-Tacoma, said during the labor and workforce panel discussion at AWB's Legislative Day in Olympia.

Without some changes, the system is a "potential powder keg" of rate increases in the coming years, he said.

Conway, who is chairman of the House Commerce & Labor Committee, declined to give a hearing to HB 2950, a bill backed by AWB that proposed a series of moderate but important reforms.

Conway acknowledged that many in the audience were disappointed the bill did not receive a hearing. The real reason it did not, he said, is because there was not enough time in short, 60-day legislative session.

The major components of the issue include compromise and release, establishing medical provider networks, and occupational diseases, Conway said.

"I am absolutely committed to working with you on these issues," he said.

Workers' comp reform runs into brick wall

The obits have appeared in the news media.

Workers' comp reform is dead, at least this year, according to Sen. Jeanne Kohl-Welles.

But business leaders refuse to give up hope that lawmakers will act this year to reform a system that is on track to give them year after year of hefty rate increases in an effort to keep it solvent.

The uphill struggle for HB 2950 ran into its latest obstacle Monday in a work session of the Senate Labor, Commerce & Consumer Protection Committee.

Kohl-Welles, chairwoman of the committee, told a room full of business leaders that "we're not going to have resolution on workers' comp in a short legislative session. It's just not going to happen."

Later in the day, a coalition of business groups rejected Kohl-Welles suggestion to form a task force and instead issued a new call for reform this year.

"A task force on workers' compensation would be a waste of time and we would boycott it," said Patrick Connor, Washington state director for the National Federation of Independent Business.

At the same time, talks continue with lawmakers from both sides of the aisle to build support for reform this session.

More evidence that California is in trouble; Washington should pay attention

"I wouldn't give your troubles to a monkey on a rock."

Late night talk show host David Letterman sometimes says that about celebrities embroiled in scandal.

But it could just as well apply to the state of California, where the latest evidence of financial turmoil is an unemployment trust fund that leads the nation in the size of its shortfall.

The California Manufacturing & Technology Association reported last week that California's Legislative Analyst office has forecast an $18.4 billion deficit for the fund by the end of 2010. To date, the state has borrowed $6 billion from the federal government in order to cut unemployment checks, and it will probably borrow more, according to the article.

This should be a sobering warning to Washington lawmakers who are considering adding more benefits to a system that's under considerable strain as a result of continued high unemployment.

For the moment, Washington's unemployment trust fund is in relatively good shape. It's in the minority of U.S. unemployment funds not already in the red or forecast to soon be broke, according to this analysis by Pro Publica.

Washington lawmakers would be wise to protect our state's endangered status.

We don't want to end up like California or Oregon.

Or a monkey on a rock.

Workers' comp reform debate heats up in media

The bad economic climate and the loss of Boeing's second 787 assembly line to South Carolina have given a new hearing to longtime complaints over Washington's troubled workers' compensation system, the Seattle Weekly writes this week.

Shortly after the introduction of House Bill 2950, the paper came out with a comprehensive report that begins with an arresting anecdote about mangled loggers and reality TV and then shifts gears into a full-blown analysis of the issue.

It was one of two reports in the news media exploring the issue this week. Reporter Austin Jenkins writes on his blog about the behind-the-scenes political maneuvering over the legislation.

The Seattle Weekly article quotes Judy Coovert, owner of AWB-member Printcom, AWB's Kris Tefft, Boeing spokesman Bernard Choi, Costco's Katrina Zitnik, and George Allen, senior vice president of government affairs at the Greater Seattle Chamber of Commerce.

Despite a drop in employees because of the recession -- and going for a year without filing a single workers' comp claim -- Coovert tells the paper that her industry's rate went up 11 percent.