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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Opinion

Politics in workers’ comp

The Spokesman-Review

The following editorial, which does not necessarily reflect the opinions of The Spokesman-Review editorial board, appeared Friday in the Yakima Herald-Republic.

There are two competing adages that could be applied to the recent announcement that in 2005 employers will see an unusually low 3.7 percent rate increase proposed for workers’ compensation insurance: Never look a gift horse in the mouth. And, if it sounds too good to be true, it probably is.

A rate increase of less than 4 percent is definitely a gift horse after two years of rate hikes that amounted to 40 percent. But some believe it’s a gift horse of a particular political stripe.

Last week at a Department of Labor and Industries hearing in Yakima, some two dozen area employers suggested that L&I … was treading lightly on rates to blunt any criticism that could be leveled at Democratic gubernatorial hopeful Christine Gregoire. … Republican Dino Rossi promised to replace all agency heads, and characterized L&I as a tool of labor and the Democrats.

The local employers cited L&I’s own figures in noting that a 15 percent increase would be required for the workers’ comp program to break even next year. In a pre-election newsletter, the Building Industry Association of Washington went much further in drawing the political connection.

Calling the single-digit rate increase proposal “a blatant display of election year politics,” the newsletter said “L&I Director Paul Trause – who recently hosted a fund-raiser for … Christine Gregoire – has suddenly announced he will ignore actuarial realities and instead go with political expediency to set the 2005 tax rates. …

“This savvy political move will effectively marginalize the debate on how to fix the broken workers’ compensation system – a move that benefits Gregoire’s campaign efforts … and undercuts BIAW’s Initiative 333, which proposes many much-needed reforms to the system. While BIAW has long argued for lower workers’ compensation taxes, this type of election-year pandering will only necessitate an astronomically larger increase in 2006. …”

Which brings us to that second adage.

A rate increase of less than 4 percent on average may be a shot in the arm for employers who have struggled over the past two years with soaring workers’ comp rates. But the sentiment of the BIAW … is widespread. L&I certainly has not given anyone a reason to trust it.

The only way to address the skepticism – and disprove the charges of political pandering – will come next fall when the rate increases for 2006 are announced. All eyes will be on the department then to see if this year really was too good to be true.