PROGRESS

L&I Did Right Thing by Lowering Increase
in 2004 Workers’ Comp Rates

Ken Oplinger

After seeing my former state of California make all the wrong moves in righting the now sinking Workers Compensation ship, I join the Association of Washington Business in being encouraged by the Department of Labor and Industries (L&I) announcement that the 2004 workers comp rate increase will now be 9.8 percent instead of the previously stated 19.4 percent.
I can assure you that after four straight years of increases totaling a whopping 300 percent for most businesses, we were certainly starting down the same road here in Washington. Clearly, the 19.4 percent was a job killer, especially on top of the 29 percent average rate increase announced earlier this year and huge increases in health insurance, unemployment taxes and liability insurance premiums in a time when many employers are facing a slow economic recovery.

In addition to this more reasonable increase, Governor Locke has called for a blue ribbon commission to look at the entire workers’ comp system. In the words of AWB President Don Brunell, “We certainly don’t want to let our system go the way the California workers comp system has gone where it now faces over a $20 billion shortfall.” I couldn’t agree more.

So what mistakes were made in California that we can avoid here? It is actually quite simple. We must make changes to the system that bring a renewed emphasis on fraud investigation, cut bureaucracy, and ensure that the system is used as it was originally intended, a means of healing an injured worker so they can either get back to work, or, if they are physically unable to do the same job after their injury, are trained for new employment.

In California, we tried for four years running to get meaningful workers compensation reform. Each year, the Democratic-controlled legislature sent bills to Governor Gray Davis, bills that omitted those things business called for, and the governor vetoed them. In each veto message, he said he would not sign a bill until business was brought to the table and a mutually agreeable bill was sent to his desk.

This all changed in January of 2002. At the very beginning of the legislature, and with the Governor facing an election in November 2002, the Democrats reconvened the legislature and sent the exact same labor supported bill back to the Governor. Needing to shore up his political base, Davis signed the bill, which provided huge increases in workers compensation benefits, but provided no reform to cut costs to the system.

Fast forward to today, with Governor Davis having been recalled, and a special session being called to finally address a problem that has created a deficit amounting to one fifth of the state’s entire annual budget.

The moral of my story? Workers compensation may be headed down the same path in Washington, but we can learn from the mistakes made to the south. Governor Locke’s call for a commission to study the issue allows for a bi-partisan (or maybe even a nonpartisan) means of creating a solution. If business and labor can work together, we can ensure that workers compensation is there for employees in need, and affordable to employers in Washington.

Given what I’ve seen of this great state so far, I have no reason to believe it can’t be accomplished.