Washington State: Workers rally against worker's comp increase

11/3/02

OLYMPIA, WA - Over 300 business owners and workers from around Washington State attended the "No Rate Increase Without Reform" rally at the state Department of Labor & Industries (L&I) headquarters in Tumwater on November 1. Organized by a broad coalition of business associations, including the Building Industry Association of Washington, Washington, Contract Loggers Association and National Federation of Independent Business, the rally protested L&I's proposed 40 percent increase in worker's compensation 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% tax increase.

The proposed increase comes during an economic recession that has resulted in Washington State facing a budget shortfall of $1.2 billion and the nation's highest unemployment rate. In addition to the proposed 40 percent workers comp rate increase, businesses have been targeted for an unemployment insurance rate hike and compliance with costly ergonomics rules.

Why should an agency that is mismanaged, overstaffed and wasteful get $400 million dollars MORE in 2003 than in 2002? one building contractor asked. According to the BIAW, an average construction framer, this rate increase will mean $469.00 per year out of his paycheck. That's school clothes, rent or a car payment. For the company that employs the same framer, $1,200 will be added to their tax bill for every worker. That means fewer jobs.
Why should a worker's compensation system that pays some workers more than they made while working, take even more money from those that do work?

"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 worker's 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 claims managers to provide injured workers with workers comp benefits without regard to immigration status, " 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 worker's 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 State 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.

Known as the "voice of the housing industry," the Building Industry Association of Washington is the largest trade association in Washington State, representing over 250,000 families and 9,600 member companies involved in the homebuilding business.