You know, perhaps I wouldn't be so obsessed with the Seattle Times editorial board if they weren't so eager to lie to their readers:
The state workers’ compensation reform, Senate Bill 5127, was passed by the Senate 30-19 and hung up in the House. It needs to pass in this session.
... Passage of this bill will also offset much, and perhaps all, of the $1.8 billion extra that the state Department of Labor and Industries says will be needed over the next 10 years to put the state disability funds on a prudent basis.
Without the bill, the state will have to raise taxes on payrolls, which raises the price of creating and sustaining jobs.
These are two factual assertions, neither of which are supported by, you know, actual facts. Instead, the editors' research apparently consists of credulously aping they hyperbolic assertions of an out-of-date year-old post on the Washington Business Alliance run blog, Washington State Wire... assertions that were immediately refuted in the post's comment thread by L&I Director Judy Schurke:
Erik Smith’s article mischaracterizes a number of points at yesterday’s Workers’ Compensation Advisory Committee special meeting.
First, L&I is NOT contemplating a 19 percent increase nor did we say we need to “beef up” the contingency reserve to $2.3 billion. Further, L&I does not have a budget gap of $3.1 billion.
The "$1.8 billion extra" the editorial claims that "[L&I] says will be needed" appears to come from Smith's assertion that "L&I figures it needs to beef that reserve back up to $2.3 billion"—an assertion that L&I's Schurke explicitly denies. "To hit that target it needs an additional $1.7 billion," writes Smith. But these were "theoretical financial scenarios" put forth as part of a larger discussion about how to rebuild workers compensation reserves, insists Schurke; they were never meant to represent any sort of hard "target."
Further, these theoretical financial scenarios were constructed a year ago, back when workers' compensation reserves were considerably smaller. As I recently posted, Washington state's workers' compensation system turned a $250 million surplus in 2012 while bumping its reserves from $580 million in June 2012 to $953 million by the end of December. Even if L&I was shooting for $2.3 billion in reserves (and it's not), the additional funds necessary to hit that nonexistent target have been shaved by about a half billion dollars since the Seattle Times year-old numbers were first devised.
And finally, it is important to note that this recent surplus came without increasing rates. At all. Despite all the dire predictions by the business community, L&I imposed zero average rate increases in 2012 and 2013, and thanks to its strong investment returns is unlikely to impose an average rate increase for 2014. The editorial definitively asserts that "Without the bill, the state will have to raise taxes on payrolls." Except that A) barring another recession there is absolutely no evidence to suggest looming rate increases, and B) these are insurance premiums, not "taxes." Workers' compensation insurance is a cost of doing business, in the same way that compulsory auto insurance is a cost of driving in Washington State.
In asserting that L&I says something it does not say in the service of advocating a fix to a crisis that does not exist, the Seattle Times editorial board is simply misleading its readers. Whether this deception is intentional, or the result of being too lazy to fact check the bullshit spewed by the business lobbyist who obviously fed them this editorial, I do not know. But I do know that readers who have relied on our state's largest daily newspaper to inform them about this complicated issue have been poorly served.
Just because the Seattle Times chooses not to cover this year's rosier Workers’ Compensation Advisory Committee report does not mean it doesn't exist. Our workers' compensation system is not in crisis. And given the cyclical nature of our economy, the system has arguably never been in crisis. Workers' compensation reserves were drawn down due to the recession—as they are in every recession—and the resulting rate increases were modest compared to previous recessions, especially considering how deep and protracted the Great Recession has been. Indeed, the relatively modest rate increases from 2008 through 2011 would not even have been necessary if not for an ill-advised $315 million rebate (equivalent to a 35 percent rate cut) in 2007.
Furthermore, our workers' compensation rates are not extraordinarily high, with the employer's share of the premium ranking 22nd nationwide according to a widely cited Oregon study. Meanwhile, year after year, multiple reports rate Washington as having one of the most favorable business climates in the nation. So it's not like we have a screaming competitiveness crisis either.
If businesses really want to reduce their workers' compensation premiums they should focus on making their workplaces safer. But to argue that we need to reduce benefits in order to stave off rate increases that are unlikely to come, is simply dishonest.