Workers rally against L&I’s job-killing 40 percent tax increase

posted in BIAW Newsletter


Olympia, WA - Over three hundred business owners and workers from around Washington State
attended BIAW’s “No Rate Increase Without Reform” rally at the state
Department of Labor & Industries’ (L&I) headquarters in Tumwater earlier
this month.

Organized by BIAW and a broad coalition of business associations, including
the Washington Contract Loggers Association and National Federation of
Independent Business, the rally protested L&I’s job-killing 40 percent
increase in workers’ comp rates for 2003.

The rally was held before the public hearing scheduled on the rate increase
and featured remarks by Senator Tim Sheldon (D-Potlatch) and Representative
Jim Clements (R-Selah). Both Sheldon and Clements blasted L&I and agency
Director Gary Moore for the proposed 40 percent tax increase.
Television stations Q13 and KOMO News 4 were on hand to cover the rally and
interviewed BIAW members on the tax increase.

The proposed increase comes during an economic recession that has resulted
in Washington State facing a budget shortfall of more than $2 billion and
the nation’s highest unemployment rate.
“Businesses cannot shoulder the additional burden of a 40 percent tax
increase when the state’s economy is in such a perilous condition,” said
BIAW Treasurer and Mason County homebuilder Gary Cronce. “Washington’s
workers’ compensation system is collapsing, and merely pouring more money
into the system won’t help,” said Cronce.

“What will help is reforming the system—implementing better ways to operate,
increased efficiency and cost cutting measures,” said Cronce. “For instance,
BIAW has recently obtained a copy of a memo sent by Director Moore directing
L&I claims managers to pay workers’ comp benefits to illegal aliens,’” he
added. “This is in direct violation of both state and federal law.”

The proposed rates don’t just affect employers. Both employers and employees
pay the workers’ compensation premiums for this “industrial insurance.” Of
the $371 million generated by the tax increase, employers will pay $247
million while workers pick up the rest of the $124 million tab.

Construction employers and workers will be among the hardest hit by the
proposed rates. Framing contractors will pay $1,200 more each year for every
employee while workers will fork over an extra $469 out of their paychecks.

These increased taxes will be passed along to homebuyers, making housing
even less affordable. As a direct result of this tax hike, homebuyers in
Washington will face an estimated $2,000 increase in the price of an average
new home in 2003.

“This is significant given that every $1,000 increase in the price of a home
squeezes 20,000 families out of the housing market,” said Cronce. “Young
families, senior citizens and low to middle income working families are the
ones hurt the most by these soaring home prices,” he said.

BIAW discovers L&I pays benefits to illegal aliens

Last month BIAW filed a public records request with the state Department of
Labor & Industries (L&I) to determine whether L&I has a policy of awarding
workers’ compensation claims and benefits to illegal aliens. The BIAW
request also sought studies and reports that L&I may have on the number of
claims paid to illegals and the total amount paid on those claims. A recent
U.S. Supreme Court decision, Hoffman Plastic Compounds, Inc. v. National
Labor Relations Board, affirmed illegal immigrants are not eligible for
workers’ compensation benefits.

L&I subsequently disclosed five documents. One of the documents was a
policy statement by L&I Director Gary Moore in which he instructs his
department to provide injured workers with workers’ comp benefits “without
regard to immigration status.” Moore’s statement was dated shortly after
the U.S. Supreme Court decision and, as an unpublished policy, violates both
state and federal law.



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