While legislators find their seats, Gov. Chris Gregoire remained center stage last week in Olympia, announcing proposals that would restructure education oversight, alter ferry system management, and amend the state’s unemployment and workers’ compensation programs.
Not a bad week’s work.
But codifying any of these changes will be the hard part, and the governor is not giving lawmakers much time to act on the first of two bills she says will cut unemployment and work comp premiums by $1 billion over four years.
If a measure that alters the way unemployment insurance premiums are calculated is not enacted by Feb. 8, when first-quarter payments are due, the window for an estimated $300 million in savings will close. Later than that, says Paul Trause, commissioner for the Employment Security Department, and returning funds to businesses becomes an administrative nightmare.
And on-again, off-again programs, he says, “just create havoc.”
What Trause might have added is that, if anything, the proposed relief is overdue. The unemployment insurance fund contains $2.5 billion, 14 months in reserves. At least 34 other states have exhausted their funds and are relying on the federal government to tide them over until the economy improves.
Those states will have to raise premiums to cover that debt. Washington will not, unless the economy takes a terrible turn for the worse.
For its part, the Washington State Labor Council says the state ought to help workers as well as employers by raising benefits to workers with children, up to a maximum $50 per week. The average check now is $350 per week.
Council President Jeff Johnson says unemployed workers cannot afford the training that will prepare them for new jobs, another component of the governor’s plan to reform not just unemployment benefits, but workers’ comp as well.
The workers’ comp component of Gregoire’s plan has more moving parts, with less money for lubrication.
She wants medical providers who treat injured workers to have a minimum of credentials. She would extend the reach of Washington’s two Centers of Occupation Health and Education; two others are in the trial stage. The COHEs, including the one managed by Inland Northwest Health Services, have proved that close coordination among the worker, employer, doctor and Department of Labor & Industries can substantially speed recovery times and cut costs.
Washington might also borrow an idea from Oregon, which compensates employers who keep injured workers on the payroll doing “light duty” work.
But workers’ comp is most bedeviled by injury claims that stretch out for months and, finally, into pensions. The governor says 8 percent of claims now account for 85 percent of costs, and the trend is worsening.
Washington, unlike most states, does not buy workers out of the program in order to cap its costs. Gregoire’s proposal would make that option available to workers age 55 and older who may not be retrainable and might prefer a reduced stipend that allows them to go their way and possibly find new work without worrying that a dollar earned is a dollar out of their pension.
The governor says her plan will erase $720 million in workers’ comp costs off state ledgers over the next four years. Unfortunately, unlike the unemployment compensation plan, the workers’ comp reforms likely won’t cut 2011 insurance premiums that will average 12 percent, and range much higher for many businesses.
With budget problems No. 1 on the to-do list, Gregoire may not have enough energy or political capital to accomplish everything she has set forth so far. If she cannot get the unemployment benefits relief package in place in the next four weeks, the overdue overhauls of that and workers’ comp may have to await the election of a new governor in 2012.