January 5, 2011 in City

Bills would save state’s businesses millions

By The Spokesman-Review
 

Gov. Chris Gregoire on Tuesday said she will ask Washington lawmakers to approve bills that would save businesses and employees $300 million this year and more than $1 billion over the next four years.

One measure that must be approved before Feb. 8 would stop, or in many cases reverse, 2011 unemployment insurance tax increases set to average 36 percent.

Instead, the state would tap an unemployment trust fund with 14 months of reserves, putting it among the strongest in the nation, she said.

The portion of the premium that companies pay based on their own hiring and firing experience would not be affected.

“This is money businesses can use to hire more employees and get people back to work,” Gregoire said at a news conference where she also announced proposed changes to the state’s workers’ compensation system.

Employment Security Department spokeswoman Sheryl Hutchison said the governor’s proposal would cut pending 2011 taxes for 90 percent of employers to 2010 levels, and about 50 percent would pay less than they did in 2010.

Another piece of the bill not mentioned by the governor would change the trigger for the cutoff of extended unemployment benefits, Hutchison said.

If not adjusted, 35,000 Washington workers would lose benefits in April, and thousands more in the following months, said Hutchison, adding that the change costs the state nothing.

A second bill would get more people back to work sooner by expanding their access to training for what Gregoire called “21st century jobs.”

“Some jobs are not coming back after the recession,” she said. Changes to the training programs would make the state eligible for about $98 million in federal funds.

That second bill would also make several changes to the workers’ compensation system, saving an estimated $720 million over four years.

It includes requiring injured workers to use a network of credentialed health care providers, reducing lifetime pensions by offering lump-sum payments to injured workers who are 55 or older, and subsidizing wages a company pays to an injured employee who returns to “light duty.”

Gregoire said 8 percent of workers’ comp claims generate 85 percent of the system’s costs.

The proposals address some concerns voiced by Spokane business owners who testified Tuesday at a Department of Labor and Industries hearing in Spokane Valley.

An average 12 percent increase in workers’ comp insurance premiums was imposed on an emergency basis Jan. 1. It could become permanent next month.

Ecolite Manufacturing Co. owner Ron Caferro said he paid $285,000 in premiums last year.

“I’m working for L&I rather than myself,” he said. “I just can’t understand how you can charge what you’re charging.”

Caferro said the 12 percent increase has him considering relocating the company and its 180 jobs to Nevada.

David Wells, owner of Wells Construction, said he has paid $160,000 in workers’ comp premiums in five years despite the filing of just one $3,700 claim by an employee hired with pre-existing carpal tunnel syndrome.

“That’s tough for a little business trying to make ends meet,” he said.

Wells said L&I employees discount employer complaints that workers facing layoffs develop “magical owies.”

Gregoire predicted organized labor and business groups will embrace different pieces of her reforms.

“I don’t know anything you can do to please both sides,” she said.

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