Spin Control

Unemployment tax rates to drop, workers comp rates steady

Gov. Chris Gregoire talks about reforms in the state's unemployment insurance and workers comp systems at a press conference on Dec. 1, 2011 (Jim Camden)
Gov. Chris Gregoire talks about reforms in the state's unemployment insurance and workers comp systems at a press conference on Dec. 1, 2011 (Jim Camden)

Gregoire at press conference: Show me some real reforms.

OLYMPIA -- Most Washington businesses will see lower unemployment taxes and many will have no increase in their workers compensation rates in 2012.

Gov. Chris Gregoire, announcing the new rates for next year, said they represent "real reform" through work with the Legislature earlier this year, rather than the calls for reform some legislators now say are needed before the state considers a tax increase.

"I've been doing reform long before anybody used it as a political football like they are today," Gregoire said. "No one has come to me with any new ideas that will solve a $2 billion problem."

The state's General Fund budget has a gap of about $1.4 billion between spending that  has been planned for state programs and salaries, and revenue the state is projected to collect through June 30, 2013. Gregoire has proposed nearly $2 billion in cuts to close that gap and provide reserves to start the next biennium.

Under the unemployment insurance and workers comp rates announced this morning:

  --88 percent of businesses will pay lower unemployment tax rates, and those reductions will be available even for some companies that have laid off workers in the last four years. About 11 percent will pay higher rates because of the level of  benefits paid to former employees.

  --Unemployment taxes will drop in all 40 rate classes. The rate 1 class, which covers some of the state's smallest businesses, will drop by 71 percent. The total amount of unemployment taxes that will be collected by the state in 2012 will drop an estimated $200 million.

  --There will be no general rate increase for workers compensation, for the first time since 2007. Some individual employers will see their rates go up, depending on their claims history or their industry. Of the state's 317 risk classes for jobs and industries, 171 risk classes will go up and 146 will go down or stay the same.

Those rates are a result of comprehensive reform of the workers' comp system the Legislature passed earlier this year. State officials said it would save about $1.1 billion over four years.




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Jim Camden
Jim Camden is the Olympia bureau chief, covering the Legislature and state government. He also is a political columnist and blogger for Spin Control.

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