AWB: ESB 5566 Will Minimize Sting in Workers-Comp Rates

April 14, 2011

A bill – generally supported by employers and opposed by labor – will alleviate workers compensation rates in Washington state. At issue are reforms, especially allowing workers to receive voluntary lump-sum payments instead of pensions.

At this writing, ESB 5566 is stalled in a Washington State Legislature committee – the House Labor and Workforce Development Committee, which is chaired by Mike Sells, D-Everett.

That’s despite support from the Association of Washington Business (AWB) and former Washington and Oregon Labor & Industries Director Gary Weeks. Mr. Weeks has been quoted as saying voluntary settlements work in 44 other states and they save money – $1.2 billion by Washington L&I estimates.

“We have two weeks to go and while the prospects for passage maybe dim, it is never over until it’s over, as Yogi Berra would say,” says AWB President Don Brunell. “Keep contacting the Governor and House members.  If they say no, don’t give up because the answer is always no until it is yes.”

Mr. Brunell asserts the bill’s passage will alleviate the pain on business.

“Because without reforms such as incorporated in ESB 5566, we are likely to look at double-digit workers compensation rage increases in 2012,” he says.

“Some are saying 20 percent or higher,” he adds. “So while I know that killing voluntary settlements makes absolutely no sense, this all about politics.”

That’s my sense, too. Candidly, I’ve worked with Mr. Brunell and his fine staff in whom I have the utmost confidence.

From the Coach’s Corner, here are AWB’s tips on what you can do.

 

I cannot say that I do not disagree with you.”

– Groucho Marx

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For a complementary chat about your situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

AWB Has Right Solution to Mounting UI Costs Pounding WA Businesses

Updated – Jan. 14, 2010

The battle over high unemployment-insurance costs is raging in this year’s legislative session in Olympia – a debate over public-policy fairness.

Businesses led by the Association of Washington Business (AWB) are asking for a bill that will lower unemployment insurance costs (UI) for employers scheduled to increase an average of 38 percent this year. But a consortium of unions is actually trying to increase unemployment checks as a condition for lowering the UI costs. Unions want employers to underwrite more than $60 per child each month in UI costs for unemployed workers.

“While their goal is well intended, remember Washington employers pay the entire unemployment premium and over the last two years in the worst recession since the Great Depression, UI costs have skyrocketed – some by more than a thousand percent and many in triple digits,” wrote Don Brunell in a post as president of AWB.

“Washington employers pay the nation’s 5th highest unemployment insurance rates.  Our state’s unemployment benefits are 2nd highest in the country,” he added.   “And, workers compensation benefits in Washington are 5th highest, according to the 2011 Competitiveness Redbook produced by the Washington Alliance for a Competitive Economy.”

So, it boils down to a question of fairness. Unions should instead consider paying part of the onerous premiums.

AWB practices what it preaches and Mr. Brunell provided this recommendation:

“A system along the lines of what AWB put in place several years ago for long-term care,” he wrote.  “AWB provides a basic policy for long-term care for the people who work here.  If they chose to add a family member to the plan, they pay a small premium for that coverage.  It is fair and it works.  That would be an innovative approach to consider for UI.”

He pointed out Washington businesspeople and other residents already have a heavy tax burden:

“…I posted a Olympia Watch post based on Tax Foundation findings showing that Washington’s ‘Tax Freedom Day’ is April 15, not April 9,” wrote Mr. Brunell. “In other words, when unemployment insurance and workers compensation taxes are added in, Washington families and employers pay a higher than average tax load and work an extra 6 days for the government.”

The AWB president agrees – the welfare of Washington’s children should be taken into account.

“Refocusing the issue is important.  It is about kids and families.   AWB believes it is better for Washington workers and their families to have jobs.  Relying on unemployment payments is no way for families to manage their finances.  Besides, those benefits are time limited.  Taxes and costs of doing business drive location and hiring decisions for Main Street businesses and large factories.  Global competition is fierce and real.  This isn’t about tradeoffs.  It is about stimulating jobs.”

Mr. Brunell’s conclusion is valid. On a personal note, I recently became aware of the plight of two unemployed workers, who are a world apart in their self esteem and philosophy about receiving unemployment benefits.

One worker who was unemployed for two years told me he was appreciative of a job offer from Boeing. He accepted the job even though it requires a commute well in excess of 50 miles one way each day. As a family man, he’s thrilled to have a future with a world-class company – even though it nets $300 a month less than he received in unemployment benefits.

The other person is staying on unemployment because he receives about $100 a month more in benefits than a recent job offer would net him.

These two examples underscore what is wrong with the exorbitant UI system in Washington and the ominous, ever-increasing entitlement attitudes of some workers. The Legislature must alleviate the financial pain of businesses for the creation of jobs.

From the Coach’s Corner, you can stay current with the moderate recommendations of Mr. Brunell and his illustrious staff at AWB’s site, www.awb.org.

Tax Increases Will Cost Washington Businesses, Consumers $6.7 Billion Next 10 Years

July 15, 2010

The well-documented lack of transparency and suspension of voters’ rights by Washington state lawmakers in the 2010 legislative session will soak taxpayers an additional $6.7 billion over the next 10 years, according to a new study by the Washington Policy Center (WPC).

“State lawmakers raised taxes at the worst possible time – in the midst of a recession with record-high unemployment levels,” says Dann Mead Smith, WPC President. “We compiled this report to help give taxpayers a clearer picture of the details and cost for each tax increase.”

The respected think-tank’s study is comprised of 12 pages of data, which includes an explanation of each tax increase and details of how each tax increase encumbers businesses and consumers for the next 10 years.

As it has done repeatedly over the years, the Legislature suspended the protections voters passed in Initiative 960, which required transparency and a two-thirds legislative majority vote in order to hike taxes. The Legislature passed SB 6130, which suspended the voter protections against unwanted new taxes.

“The bill temporarily repeals provisions of voter-approved Initiative 960 until July 1, 2011,” states WPC’s report at www.washingtonpolicy.org. “Washington voters passed Initiative 960 on November 6, 2007.”

The $800 million in new taxes include:

  • Business and Occupation taxes
  • Canceling Real Estate Excise Tax exemptions
  • Increasing taxes for Public Utility Districts
  • Hiking the 911 excise tax
  • Hospital Bed taxes
  • Bottled water, soft drink, beer, candy and gum taxes
  • Tobacco taxes including a 500 percent increase on cigars

“Lawmakers increased total state spending by 43 percent in the last five budget cycles, a period in which state population grew only 11 percent, and inflation increased just 19 percent,” states the Report on 2010 Tax Increases in Washington State.

“By repealing the non-binding advisory votes, lawmakers expected their names would not appear in the official voters’ pamphlet for 2010 next to a description of the tax increases they had enacted,” the study notes. “The purpose of this report is to provide much of the information the public would have received in the official voters’ pamphlet if the legislature had not repealed the public disclosure provisions of Initiative 960.

Well,  if you’re unsure how your legislator voted on taxes and other issues, visit: www.washingtonvotes.org.

Meantime, here’s a tip of the Biz Coach cap to Washington Policy Center for its usual fine work.

From the Coach’s Corner, you might be interested in the results of these polls:

  1. More Voters Say Washington State is Headed the Wrong Way
  2. Big Surprise in Washington State Race for U.S. Senator   

If you want to do something about these tax increases, you might also want to consider these organizations:

Seattle business consultant Terry Corbell provides high-performance management services and strategies.